210 Basis Point Growth in Sequential Quarter
Average Occupancy for Owned Communities
150 Basis Point Growth in Sequential Quarter
Average Occupancy for Managed Communities
Completed Company Rebrand to AlerisLife
$95.0 million Term Loan Closed Subsequent to
Year End Further Enhances Liquidity
AlerisLife Inc. (Nasdaq: ALR) today announced its financial
results for the three months ended December 31, 2021.
Katherine Potter, President and Chief Executive Officer, made
the following statement:
“We achieved several strategic milestones during and subsequent
to the end of the fourth quarter, including rebranding ourselves as
AlerisLife and announcing strategic collaborations and partnerships
to enhance our resident experience and expand our lifestyle
services offering. We also enhanced our leadership team with the
addition of a new Chief People Officer and a new Chief Customer
Officer, and we hope to leverage their experience to further expand
our services and customer base.
During the fourth quarter, average occupancy for the 20 senior
living communities owned by AlerisLife increased 210 basis points
from the third quarter. Average occupancy for the 120 comparable
community managed portfolio increased 70 basis points from the
third quarter. We believe the disruption associated with
transitioning management of certain communities owned by
Diversified Healthcare Trust is now behind us and we continue to
see a sustained improvement in macroeconomic fundamentals. As a
result, we remain focused on optimizing our core competencies,
including continuing to deliver an exceptional and enhanced
resident experience to senior living and active adult residents,
while also offering lifestyle services to choice-based
consumers.
We remain well capitalized to continue executing our strategic
transformation, as we ended the year with unrestricted cash and
cash equivalents of $67.0 million. Additionally, subsequent to
quarter end, we closed on a $95.0 million term loan, $63.0 million
of which was immediately outstanding. This loan not only enhanced
our liquidity and flexibility, but gives us additional capital to
pursue the development and expansion of our lifestyle services
offering.”
Fourth Quarter Summary of Financial Results:
- Net loss for the fourth quarter of 2021 was $10.7 million, or
$0.34 per share, which included $2.3 million of expenses in
connection with the Reposition phase of the strategic plan
announced on April 9, 2021, or the Strategic Plan, partially offset
by $1.0 million reimbursed by Diversified Healthcare Trust, or DHC,
compared to net income of $2.9 million, or $0.09 per share, for the
fourth quarter of 2020.
- Earnings before interest, taxes, depreciation and amortization,
or EBITDA, for the fourth quarter of 2021 was $(7.5) million
compared to $5.8 million for the fourth quarter of 2020. Adjusted
EBITDA, as described further below, was $(6.4) million for the
fourth quarter of 2021 compared to $5.2 million for the fourth
quarter of 2020.
- EBITDA and Adjusted EBITDA are non-GAAP financial measures.
Reconciliations of net loss determined in accordance with GAAP to
EBITDA and Adjusted EBITDA for the fourth quarter of 2021 and 2020
are presented later in this press release.
Substantially all of ALR's business is conducted by its two
segments: (i) residential (formerly known as senior living) through
its brand Five Star Senior Living, or Five Star, and (ii) lifestyle
services (formerly known as rehabilitation and wellness services)
primarily through its brands Ageility Physical Therapy Solutions,
and Ageility Fitness, or collectively Ageility, as well as Windsong
Home Health. The following tables present data on the owned and
managed senior living communities that ALR operates through Five
Star, including comparable community data, as well as data on the
rehabilitation clinics that ALR operates through Ageility,
including comparable clinic data.
As of and for the Three Months
Ended
December 31, 2021
September 30, 2021
December 31, 2020
Five Star
Residential Segment:
Month End Occupancy
Owned and Leased
72.7
%
72.9
%
69.7
%
Managed
74.8
%
73.8
%
70.8
%
Comparable Communities (1)
Month End Occupancy
Owned
72.7
%
72.9
%
70.2
%
Managed
75.2
%
74.6
%
74.2
%
Operating Margin (2)
Owned
(25.2
)%
(5.1
)%
(20.6
)%
Managed
3.5
%
7.1
%
11.1
%
As of and for the Three Months
Ended
December 31, 2021
September 30, 2021
December 31, 2020
Ageility:
Lifestyle Services Segment:
Number of Clinics
Inpatient (3)
10
10
37
Outpatient
205
223
207
Number of Visits (in thousands)
Inpatient (3)
21
20
76
Outpatient
148
147
150
Comparable Clinics (4)
Average revenue per clinic (in
thousands)
$
69.2
$
69.3
$
72.1
Operating margin (3)
9.1
%
10.2
%
13.2
%
_______________________________________
(1)
Comparable communities provides data for
20 owned senior living communities and 120 managed senior living
communities that ALR continuously owned or managed and operated
through its brand Five Star since October 1, 2020, exclusive of 107
senior living communities with approximately 7,400 living units
that ALR previously managed for DHC that were transitioned to new
operators in 2021 and one senior living community with
approximately 100 living units that ALR managed for DHC that was
closed in February 2022, and exclusive of 1,532 skilled nursing
facility, or SNF, units that have been closed and are in the
process of being repositioned in 27 Continuing Care Retirement
Communities, or CCRCs, that ALR will continue to manage. See
"Strategic Plan Update" below for an update on the progress made
with respect to the Strategic Plan. Comparable communities also
excludes four leased communities with approximately 200 living
units previously leased from HealthPeak. The lease with HealthPeak
was terminated on September 30, 2021.
(2)
Operating margin is defined as operating
revenue less operating expenses for the business unit divided by
operating revenue. It is exclusive of Provider Relief Funds from
the Coronavirus Aid, Relief, and Economic Security Act, or the
CARES Act, and other government grants recognized as other income.
It is inclusive of 1,532 SNF units, which have been closed and are
in the process of being repositioned, in 27 CCRCs that ALR will
continue to manage. In addition, it excludes restructuring expenses
for the three months ended December 31, 2021 of $0.3 million and
for the three months ended September 30, 2021 of $0.2 million for
the comparable managed communities.
(3)
All inpatient rehabilitation clinics will
be closed as part of the Strategic Plan. During the three months
ended June 30, 2021, 27 inpatient clinics were closed as part of
the Strategic Plan. There were no inpatient clinics closed during
the six months ended December 31, 2021.
(4)
Comparable clinics includes financial data
for 183 outpatient rehabilitation clinics that ALR continuously
operated since October 1, 2020 and excludes data for 27 inpatient
rehabilitation clinics that were closed during the three months
ended June 30, 2021 and an additional ten inpatient rehabilitation
clinics that are expected to be closed per the Strategic Plan
commencing in August 2022. In addition, comparable clinics also
excludes 17 outpatient rehabilitation clinics that were closed in
December 2021 in senior living communities that were transitioned
to a new operator in 2021 or closed in February 2022.
Company Rebrand and Name Change
On January 25, 2022, ALR changed its name from Five Star Senior
Living Inc. to AlerisLife Inc. Aleris, a Latin word meaning "to
foster, nourish and develop," represents our expansion from
primarily a senior living owner and operator to a more diversified
and comprehensive partner, which aims to offer each of ALR's
customers choice-based services regardless of their residential
location or age.
Term Loan
On January 27, 2022, ALR entered into a credit and security
agreement, or the Credit Agreement, and closed on a $95.0 million
senior secured term loan, or the Loan, $63.0 million of which was
funded upon the effectiveness of the Credit Agreement, including
approximately $3.2 million in closing costs. The remaining proceeds
include $12.0 million for capital improvements and an opportunity
for another $20.0 million that is available to us upon achieving
certain financial thresholds. The maturity date of the Loan is
January 27, 2025. Subject to the payment of an extension fee and
meeting certain other conditions, ALR may elect to extend the
stated maturity date of the Loan for two one-year periods. ALR is
required to pay interest on outstanding amounts at a base rate of
the Secured Overnight Financing Rate, or SOFR (subject to a minimum
base rate of 50 basis points), plus 450 basis points.
Strategic Plan Update
On April 9, 2021, ALR announced the Strategic Plan, including
to:
- Reposition ALR's senior living management service
offering to focus on larger independent living and assisted living
as well as active adult communities, and exit skilled nursing by
transitioning 108 senior living communities to new operators and
closing approximately 1,500 SNF living units in retained
CCRCs;
- Evolve through investment in an enhanced scalable
corporate shared service center to support operations and growth
and to deliver differentiated, customer focused senior living
resident experiences across a segmented portfolio of communities;
and
- Diversify with a focus on revenue diversification
opportunities, including growing ALR's rehabilitation services and
expanding lifestyle services to provide a choice based, financially
flexible senior living resident experience and reach customers
outside of senior living communities.
At December 31, 2021, ALR changed the name of its segments to
better describe the business and operations of those segments. The
segment formerly known as senior living is now known as residential
and the segment formerly known as rehabilitation and wellness
services is now known as lifestyle services. There were no changes
in the composition of the segments.
During and subsequent to the year ended December 31, 2021, ALR
made the following progress with respect to the Reposition phase of
the Strategic Plan:
- Amended the management arrangements with DHC on June 9,
2021,
- Transitioned the management of 107 senior living communities
with approximately 7,400 living units to new operators, of which 38
communities with approximately 2,600 living units were transitioned
during the three months ended December 31, 2021, and closed one
senior living community with approximately 100 living units in
February 2022,
- Closed all 1,532 SNF living units in 27 managed CCRCs and began
collaborating with DHC to reposition these SNF units,
- Closed 27 of the 37 planned Ageility inpatient rehabilitation
clinics, and
- For the remaining ten Ageility inpatient rehabilitation
clinics, entered into agreements with the new operators to continue
to provide these services through August 2022.
In connection with the Reposition phase of the Strategic Plan,
36.6% of positions were transitioned or eliminated in the
residential segment, 10.8% in the lifestyle services segment and
27.9% in corporate resulting in restructuring expenses of $2.3
million recorded in the three months ended December 31, 2021, of
which $1.0 million was reimbursed by DHC. In addition, ALR expects
to realize expense reductions associated with these roles,
including insurance and information technology license
subscriptions.
During and subsequent to the year ended December 31, 2021, ALR
made the following progress with respect to the Evolve phase of the
Strategic Plan:
- Completed enhancements to the corporate technology
infrastructure,
- Invested in critical areas of the residential experience at
Five Star senior living communities, including community wireless
connectivity, resident transportation services and re-designed
senior living community common areas and resident units, deploying
$11.7 million and $103.4 million of capital in the owned and
managed communities, respectively,
- Invested in digital marketing infrastructure to effectively
reduce cost per digital lead by approximately 70.0%,
- Entered into a culinary services partnership with Compass Group
to transform the senior living resident dining experience,
- Entered into a collaboration with Dispatch Health to enable
senior living resident access to ambulatory care services in their
community,
- Standardized certain administrative functions through
centralization efforts to enhance operating efficiency, and
- Subsequent to year end, hired a Chief People Officer and a
Chief Customer Officer.
During the year ended December 31, 2021, ALR made the following
progress with respect to the Diversify phase of the Strategic
Plan:
- Opened 15 net new Ageility outpatient rehabilitation clinics,
exclusive of the closure of 17 Ageility outpatient rehabilitation
clinics in December 2021 in Five Star senior living communities
that were transitioned to new operators in 2021 or closed in
February 2022, bringing the Ageility outpatient rehabilitation
clinic total to 205, as of December 31, 2021, and
- Grew Ageility fitness revenues to $3.3 million or a 38.1%
increase over the same period in 2020.
Following the completion of the Reposition phase of the
Strategic Plan, ALR continues to manage 120 senior living
communities for DHC, representing 17,899 living units and
approximately 96.2% of ALR's residential management fees for the
three months ended December 31, 2021, and ALR continues to own 20
senior living communities with 2,100 living units.
Presented below is a summary of the units owned and managed by
ALR as of December 31, 2021 following the completion of the
Reposition phase of the Strategic Plan:
Total Units (1)
Independent living
10,423
Assisted living
7,715
Memory care
1,861
Total
19,999
_______________________________________
(1)
The units operated as of December 31, 2021
include 20 Five Star senior living communities that are owned by
ALR and 120 Five Star senior living communities managed by ALR for
DHC and excludes 107 Five Star senior living communities with
approximately 7,400 living units that ALR previously managed for
DHC that were transitioned to new operators during the year ended
December 31, 2021 and one senior living community with
approximately 100 living units that was closed in February
2022.
Presented below is a summary of the communities, units, average
occupancy, month end occupancy, revenues and residential management
fees for the Five Star senior living communities ALR manages for
DHC, as of and for the three months ended December 31, 2021 after
the completion of the Reposition phase of the Strategic Plan
(dollars in thousands):
Total
Communities
Units
Average Occupancy
Month End Occupancy
Community Revenues (1)
Management Fees (2)
Independent and assisted living
communities (3)
120
17,899
74.1%
75.2%
$
155,729
$
9,121
Total
120
17,899
74.1%
75.2%
$
155,729
$
9,121
_______________________________________
(1)
Represents the revenues of the Five Star
senior living communities ALR managed for DHC. Managed senior
living communities' revenues do not represent ALR's revenues and
are included to provide supplemental information regarding the
operating results of the Five Star senior living communities from
which ALR earns residential management fees.
(2)
Excludes residential management fees of
$361 for the three months ended December 31, 2021 for the 38 senior
living communities with approximately 2,600 living units that were
transitioned to new operators during the three months ended
December 31, 2021 and one senior living community with
approximately 100 living units that was closed in February
2022.
(3)
Excludes one CCRC with approximately 100
living units that was closed in February 2022.
Presented below is a summary of the Ageility rehabilitation
clinics ALR operated as of and for the three months ended December
31, 2021 and the number of clinics to be operated after the
implementation of the Reposition phase of the Strategic Plan
(dollars in thousands):
As of and for the Three
Months Ended December 31, 2021
Retained
Number of Clinics
Total Revenue (3)
Average Revenue per
Clinic
Adjusted EBITDA
Margin(5)
Number of Clinics
Total Revenue (1)(3)
Average Revenue per
Clinic
Adjusted EBITDA
Margin(5)
Inpatient Clinics in DHC Communities
10
$
1,654
$
165
28.1%
—
$
—
$
—
—%
Outpatient Clinics in DHC Communities
91
8,030
88
10.9%
91
8,030
88
10.9%
Outpatient Clinics in Transitioned
Communities(2)
28
1,613
58
8.9%
28
1,293
46
14.7%
Total Clinics at DHC Communities
129
11,297
88
13.1%
119
9,323
78
11.5%
Outpatient Clinics at ALR Owned
Communities
15
845
56
8.4%
15
845
56
8.4%
Outpatient Clinics at Other Communities
(4)
71
3,249
46
2.9%
71
3,233
46
3.3%
Total Clinics
215
$
15,391
$
72
10.7%
205
$
13,401
$
65
9.3%
_______________________________________
(1)
Excludes revenue of $1,654 earned during
the three months ended December 31, 2021 for ten Ageility inpatient
rehabilitation clinics, which are expected to be closed commencing
in August 2022 as part of the Strategic Plan, revenues of $320
earned during the three months ended December 31, 2021 for 17
Ageility outpatient rehabilitation clinics that were closed in
December 2021 in Five Star senior living communities that were
transitioned in 2021 or closed in February 2022, and revenues of
$16 earned during the three months ended December 31, 2021 for
three Ageility outpatient rehabilitation clinics that were closed
during the three months ended December 31, 2021.
(2)
As part of the Strategic Plan, 107 Five
Star senior living communities managed for DHC were transitioned to
new operators in 2021 and one senior living community was closed in
February 2022. These transitioned communities had 45 Ageility
outpatient rehabilitation clinics. As of December 31, 2021 Ageility
continues to operate 28 of these clinics. The remaining 17 clinics
were closed in December 2021 in senior living communities that were
transitioned to new operators in 2021 or closed in February
2022.
(3)
Total Ageility revenue excludes home
healthcare services, which are a part of the lifestyle services
segment.
(4)
Other communities includes outpatient
rehabilitation clinics at senior living communities not owned or
managed by ALR.
(5)
Adjusted EBITDA Margin is a non-GAAP
financial measure. A reconciliation of operating margin to Adjusted
EBITDA Margin is presented later in this press release.
ALR currently expects to continue to diversify revenue through
growth of its lifestyle service offerings, including opening new
outpatient rehabilitation clinics and expanding its fitness and
other home-based service offerings within and outside of Five Star
senior living communities. Fitness offerings started as an
extension of Ageility's outpatient rehabilitation services and,
while representing only 5.7% of segment revenues for the three
months ended December 31, 2021, fitness revenues increased to $0.9
million or 30.7% when compared to the same period in 2020,
representing 3.4% of segment revenue. Since January 1, 2020,
Ageility has opened 32 net new outpatient rehabilitation clinics,
17 of which were opened in 2020, and 15 of which were opened during
the year ended December 31, 2021 (exclusive of the 17 outpatient
rehabilitation clinics that were closed in December 2021 in senior
living communities that were transitioned in 2021 or closed in
February 2022).
Conference Call Information:
At 1:00 p.m. Eastern Time on February 24, 2022, ALR's President
and Chief Executive Officer, Katherine Potter, and Executive Vice
President, Chief Financial Officer and Treasurer, Jeffrey Leer,
will host a conference call to discuss ALR's fourth quarter 2021
financial results.
The conference call telephone number is (877) 329-4332.
Participants calling from outside the United States and Canada
should dial (412) 317-5436. No pass code is necessary to access the
call from either number. Participants should dial in about 15
minutes prior to the scheduled start of the call. A replay of the
conference call will be available through 11:59 p.m. Eastern Time
on March 3, 2022. To hear the replay, dial (412) 317-0088. The
replay pass code is 1968786.
A live audio webcast of the conference call will also be
available in a listen-only mode on ALR’s website, www.alerislife.com. Participants wanting to access
the webcast should visit ALR’s website about five minutes before
the call. The archived webcast will be available for replay on
ALR’s website following the call for about a week. The
transcription, recording and retransmission in any way of ALR's
fourth quarter ended December 31, 2021 financial
results conference call are strictly prohibited
without the prior written consent of ALR. ALR’s website is not
incorporated as part of this press release.
About AlerisLife:
AlerisLife enriches and inspires the lives of its older adult
customers across the United States by delivering an exceptional and
enhanced resident experience to senior living and active adult
residents, while also offering lifestyle services to the younger
choice-based consumer. The Company is headquartered in Newton,
Massachusetts. For more information, visit www.alerislife.com.
AlerisLife Inc.
Condensed Consolidated
Statements of Operations
(amounts in thousands, except
per share amounts)
(unaudited)
Three Months Ended December
31,
Year Ended December
31,
2021
2020
2021
2020
REVENUES
Lifestyle services
$
15,626
$
20,256
$
68,014
$
82,032
Residential
14,883
17,903
64,638
77,015
Residential management fees
9,482
14,822
47,479
62,880
Total management and operating
revenues
39,991
52,981
180,131
221,927
Reimbursed community-level costs incurred
on behalf of managed communities
137,195
226,264
722,857
916,167
Other reimbursed expenses
3,855
6,645
31,605
25,648
Total revenues
181,041
285,890
934,593
1,163,742
Other operating income
—
1,936
7,795
3,435
OPERATING EXPENSES
Lifestyle services expenses
13,908
16,492
59,322
66,853
Residential wages and benefits
8,514
11,186
38,970
41,819
Other residential operating expenses
7,893
7,870
30,311
28,116
Community-level costs incurred on behalf
of managed communities
137,195
226,264
722,857
916,167
General and administrative
18,762
20,784
85,718
85,835
Restructuring expenses
2,337
36
19,196
1,448
Depreciation and amortization
2,961
2,913
11,873
10,997
Total operating expenses
191,570
285,545
968,247
1,151,235
Operating (loss) income
(10,529
)
2,281
(25,859
)
15,942
Interest, dividend and other income
114
132
358
757
Interest and other expense
(304
)
(461
)
(1,683
)
(1,631
)
Unrealized gain on equity investments
175
640
730
480
Realized gain on sale of debt and equity
investments
25
3
218
425
Loss on termination of leases
(1
)
—
(3,278
)
(22,899
)
(Loss) Income before income taxes and
equity in losses of an investee
(10,520
)
2,595
(29,514
)
(6,926
)
(Provision) benefit for income taxes
(40
)
308
(234
)
(663
)
Equity in losses of an investee
(177
)
—
(177
)
—
Net (loss) income
$
(10,737
)
$
2,903
$
(29,925
)
$
(7,589
)
Weighted average shares
outstanding—basic
31,662
31,495
31,591
31,471
Weighted average shares
outstanding—diluted
31,662
31,612
31,591
31,471
Net loss per share—basic
$
(0.34
)
$
0.09
$
(0.95
)
$
(0.24
)
Net loss per share—diluted
$
(0.34
)
$
0.09
$
(0.95
)
$
(0.24
)
AlerisLife Inc. Reconciliation of
Non-GAAP Financial Measures (dollars in thousands)
(unaudited)
Non-GAAP financial measures are financial measures that are not
determined in accordance with U.S. generally accepted accounting
principles, or GAAP. ALR believes the non-GAAP financial measures
presented in the tables below are meaningful supplemental
disclosures because they may help investors better understand
changes in ALR’s operating results and its ability to meet
financial obligations or service debt, make capital expenditures
and expand its business. These non-GAAP financial measures may also
help investors make comparisons between ALR and other companies on
both a GAAP and non-GAAP basis. ALR believes that EBITDA, Adjusted
EBITDA and Adjusted EBITDA Margin are meaningful financial measures
that may help investors better understand its financial
performance, including by allowing investors to compare ALR's
performance between periods and to the performance of other
companies. ALR management uses EBITDA, Adjusted EBITDA and Adjusted
EBITDA Margin to evaluate ALR’s financial performance and compare
ALR’s performance over time and to the performance of other
companies. ALR calculates EBITDA, Adjusted EBITDA and Adjusted
EBITDA Margin as shown below. These measures should not be
considered as alternatives to net income (loss) or operating income
(loss), as indicators of ALR’s operating performance or as measures
of ALR’s liquidity. Also, EBITDA, Adjusted EBITDA and Adjusted
EBITDA Margin as presented may not be comparable to similarly
titled amounts calculated by other companies.
ALR believes that net income (loss) is the most directly
comparable financial measure, determined according to GAAP, to
ALR’s presentation of EBITDA and Adjusted EBITDA. The following
table presents the reconciliation of these non-GAAP financial
measures to net income (loss) for the three months and year ended
December 31, 2021 and 2020.
Three Months Ended December
31,
Year Ended December
31,
2021
2020
2021
2020
Net (loss) income
$
(10,737
)
$
2,903
$
(29,925
)
$
(7,589
)
Add (less):
Interest and other expense
304
461
1,683
1,631
Interest, dividend and other income
(114
)
(132
)
(358
)
(757
)
(Benefit) provision for income taxes
40
(308
)
234
663
Depreciation and amortization
2,961
2,913
11,873
10,997
EBITDA
(7,546
)
5,837
(16,493
)
4,945
Add (less):
Severance (1)
—
—
—
282
Litigation settlement (2)
—
—
—
2,473
Unrealized gain on equity investments
(175
)
(640
)
(730
)
(480
)
Loss on termination of leases (3)
1
—
3,278
22,899
Net restructuring expenses (4)
1,370
36
5,885
1,448
Long-lived asset impairment (5)
—
—
890
—
Adjusted EBITDA
$
(6,350
)
$
5,233
$
(7,170
)
$
31,567
_______________________________________
(1)
Costs incurred for the year ended December
31, 2020 represent those related to a reduction in workforce.
(2)
Represents costs incurred related to the
settlement of a lawsuit and is included in other residential
operating expenses in ALR's condensed consolidated statements of
operations. The settlement was approved by the court, and paid by
ALR, on May 12, 2021.
(3)
For the 2021 periods, represents the lease
termination expenses related to the termination of four leased
communities on September 30, 2021 as well as the write off of
certain assets at those communities. For the 2020 periods,
represents the excess of the fair value of the ALR shares issued to
DHC as of January 1, 2020 of $97,899, compared to the consideration
of $75,000 paid by DHC as part of the transaction agreement to
restructure ALR's business arrangements with DHC, or the
Restructuring Transactions.
(4)
Includes costs incurred related to the
Strategic Plan and the Restructuring Transactions for the three
months and year ended December 31, 2021 and 2020, respectively, and
are included in restructuring expenses in the Condensed
Consolidated Statements of Operations, net of reimbursed expenses
of $966 and $13,311 for the three months and year ended December
31, 2021, respectively, from DHC.
(5)
Represents asset impairments related to
one leased community that had a fire on April 4, 2021.
AlerisLife Inc.
Reconciliation of Non-GAAP Financial Measures (dollars in
thousands) (unaudited)
ALR believes that net income is the most directly comparable
financial measure, determined according to GAAP, to ALR’s
presentation of EBITDA and Adjusted EBITDA. The following table
presents the reconciliation of these non-GAAP financial measures to
net income for the three months ended December 31, 2021 for
Ageility.
Three Months Ended December
31, 2021
Total
Retained
Lifestyle
services:
Revenue (1)
$
15,626
$
15,290
Less: Home health services
235
235
Less: Inpatient rehabilitation (2)
—
1,654
Total Ageility revenue (3)
$
15,391
$
13,401
Ageility:
Net income
$
1,515
$
1,150
Add: Depreciation
113
88
EBITDA
1,628
1,238
Add: Restructuring expenses
22
8
Adjusted EBITDA
$
1,650
$
1,246
Adjusted EBITDA Margin
10.7
%
9.3
%
_______________________________________
(1)
Retained excludes revenues of $320 earned
during the three months ended December 31, 2021 for 17 Ageility
outpatient rehabilitation clinics that were closed in December 2021
in senior living communities that were transitioned to new
operators in 2021 or closed in February 2022, and revenues of $16
earned during the three months ended December 31, 2021 for three
Ageility outpatient rehabilitation clinics that were closed during
the three months ended December 31, 2021.
(2)
Retained excludes revenue for ten Ageility
inpatient rehabilitation clinics that are expected to be closed
commencing in August 2022 as part of the Strategic Plan.
(3)
Total Ageility retained revenue includes
revenue from outpatient rehabilitation clinics and fitness.
AlerisLife Inc.
Condensed Consolidated Balance
Sheets
(dollars in thousands, except
per share amounts)
(unaudited)
December 31,
December 31,
2021
2020
ASSETS
Current assets:
Cash and cash equivalents
$
66,987
$
84,351
Restricted cash and cash equivalents
24,970
23,877
Accounts receivable, net
9,244
9,104
Due from related person
41,664
96,357
Debt and equity investments, of which
$7,609 and $11,125 are restricted, respectively
19,535
19,961
Prepaid expenses and other current
assets
24,433
28,658
Total current assets
186,833
262,308
Property and equipment, net
159,843
159,251
Operating lease right-of-use assets
9,197
18,030
Finance lease right-of-use assets
3,467
4,493
Restricted cash and cash equivalents
982
1,369
Restricted debt and equity investments
3,873
4,788
Other long-term assets
12,082
3,967
Total assets
$
376,277
$
454,206
LIABILITIES AND SHAREHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
37,516
$
23,454
Accrued expenses and other current
liabilities
31,488
42,208
Accrued compensation and benefits
34,295
70,543
Accrued self-insurance obligations
31,739
31,355
Operating lease liabilities
699
2,567
Finance lease liabilities
872
808
Due to related persons
3,879
6,585
Mortgage note payable
419
388
Total current liabilities
140,907
177,908
Long-term liabilities:
Accrued self-insurance obligations
34,744
37,420
Operating lease liabilities
9,366
17,104
Finance lease liabilities
3,050
3,921
Mortgage note payable
6,364
6,783
Other long-term liabilities
256
538
Total long-term liabilities
53,780
65,766
Commitments and contingencies
Shareholders’ equity:
Common stock, par value $0.01: 75,000,000
shares authorized, 32,662,649 and 31,679,207 shares issued
327
317
Additional paid-in-capital
461,298
460,038
Accumulated deficit
(281,064
)
(251,139
)
Accumulated other comprehensive income
1,029
1,316
Total shareholders’ equity
181,590
210,532
Total liabilities and shareholders'
equity
$
376,277
$
454,206
AlerisLife Inc.
Residential Segment
Data
(dollars in thousands, except
per unit amounts)
(unaudited)
Three Months Ended
December 31,
September 30,
June 30,
March 31,
December 31,
2021
2021
2021
2021
2020
Owned and Leased
Senior Living Communities
Independent and assisted living
communities:
Revenues
$
14,883
$
16,320
$
16,378
$
17,057
$
17,903
Other operating income (1)
—
—
2
7,774
1,715
Operating expenses
18,574
17,895
21,012
20,414
21,181
Operating (loss) income
(3,691
)
(1,575
)
(4,632
)
4,417
(1,563
)
Operating margin
(24.8
)%
(9.7
)%
(28.3
)%
17.8
%
(8.0
)%
Number of communities (end of period)
20
20
24
24
24
Number of living units (end of period)
(2)
2,100
2,099
2,251
2,302
2,302
Average occupancy
72.0
%
69.9
%
68.1
%
68.3
%
71.5
%
Month end occupancy
72.7
%
72.9
%
69.7
%
68.2
%
69.7
%
RevPAR (3)
$
2,349
$
2,411
$
2,425
$
2,479
$
2,596
RevPOR (4)
$
3,192
$
3,375
$
3,524
$
3,630
$
3,550
Managed Senior
Living Communities (5)
Residential management fees
$
9,482
$
11,220
$
12,927
$
13,850
$
14,822
Community-level revenues
161,907
210,160
243,947
259,966
278,637
Other operating income (1)
602
786
16,564
1,617
12,520
Community-level expenses (6)
159,329
203,756
237,461
247,171
261,678
Community operating income
3,180
7,190
23,050
14,412
29,479
Community operating margin
2.0
%
3.4
%
8.8
%
5.5
%
10.1
%
Number of communities (end of period)
121
159
228
228
228
Number of living units (end of period)
(2)
18,005
20,669
25,482
26,963
26,969
Average occupancy
73.7
%
72.2
%
69.5
%
69.5
%
72.2
%
Month end occupancy
74.8
%
73.8
%
71.3
%
70.2
%
70.8
%
RevPAR (3)
$
2,919
$
3,046
$
3,086
$
3,213
$
3,355
RevPOR (4)
$
3,875
$
4,129
$
4,389
$
4,623
$
4,543
_______________________________________
(1)
Other operating income represents income
recognized for funds received under the CARES Act and other
government grants.
(2)
Includes living units categorized as in
service. As a result, the number of living units may vary from
period to period for reasons other than the acquisition or
disposition of senior living communities.
(3)
RevPAR is defined by ALR as resident fee
revenues for the corresponding portfolio for the period divided by
the average number of available units for the period, divided by
the number of months in the period. Data for the three months ended
December 31, 2020, March 31, 2021, June 30, 2021, September 30,
2021 and December 31, 2021 exclude income received by communities
under the CARES Act and other government grants.
(4)
RevPOR is defined by ALR as resident fee
revenues for the corresponding portfolio for the period divided by
the average number of occupied units for the period, divided by the
number of months in the period. Data for the three months ended
December 31, 2020, March 31, 2021, June 30, 2021, September 30,
2021 and December 31, 2021 exclude income received by communities
under the CARES Act and other government grants.
(5)
Managed senior living communities, other
than ALR's residential management fees, represents financial data
of senior living communities managed for DHC and does not represent
financial results of ALR. Managed senior living communities' data
is included to provide supplemental information regarding the
operating results of the senior living communities from which ALR
earns residential management fees.
(6)
The three months ended December 31, 2021,
September 30, 2021, and June 30, 2021 includes restructuring
expense of $966, $813 and $11,531, respectively.
AlerisLife Inc.
Comparable Communities
Residential Segment Data
(dollars in thousands, except
per unit amounts)
(unaudited)
Three Months Ended
December 31,
September 30,
June 30,
March 31,
December 31,
2021
2021
2021
2021
2020
Owned Senior
Living Communities (1):
Number of communities (end of period)
20
20
20
20
20
Number of living units (end of period)
(2)
2,100
2,099
2,099
2,099
2,098
Average occupancy
72.0
%
70.4
%
68.3
%
68.9
%
72.4
%
Month end occupancy
72.7
%
72.9
%
70.1
%
69.0
%
70.2
%
RevPAR (3)
$
2,349
$
2,354
$
2,357
$
2,421
$
2,549
RevPOR (4)
$
3,192
$
3,270
$
3,413
$
3,515
$
3,445
Managed Senior
Living Communities (1)(5):
Number of communities (end of period)
120
120
120
120
120
Number of living units (end of period)
(2)
17,899
17,899
17,898
17,906
17,910
Average occupancy
74.1
%
73.4
%
72.9
%
72.7
%
75.6
%
Month end occupancy
75.2
%
74.6
%
73.3
%
73.2
%
74.2
%
RevPAR (3)
$
2,900
$
2,941
$
2,961
$
2,946
$
3,054
RevPOR (4)
$
3,831
$
3,922
$
4,018
$
4,051
$
3,954
_______________________________________
(1)
Includes data for Five Star senior living
communities that ALR has continuously owned or managed since
October 1, 2020. Per the Strategic Plan, the summary of operations
for comparable communities excludes (i) 107 Five Star senior living
communities managed for DHC with approximately 7,400 units that
were transitioned to new operators during the six months ended
December 31, 2021 and one senior living community with
approximately 100 units that was closed in February 2022, and (ii)
1,532 SNF units in 27 CCRCs that were closed during the six months
ended September 30, 2021 and are in the process of being
repositioned that ALR will continue to manage for DHC. The leases
for four communities with approximately 200 living units which were
terminated on September 30, 2021 are also excluded from comparable
communities.
(2)
Includes living units categorized as in
service. As a result, the number of living units may vary from
period to period for reasons other than the acquisition or
disposition of senior living communities.
(3)
RevPAR is defined by ALR as resident fee
revenues for the corresponding portfolio for the period divided by
the average number of available units for the period, divided by
the number of months in the period. Data for the three months ended
December 31, 2020, March 31, 2021, June 30, 2021, September 30,
2021 and December 31, 2021 exclude income received by communities
under the CARES Act and other government grants.
(4)
RevPOR is defined by ALR as resident fee
revenues for the corresponding portfolio for the period divided by
the average number of occupied units for the period, divided by the
number of months in the period. Data for the three months ended
December 31, 2020, March 31, 2021, June 30, 2021, September 30,
2021 and December 31, 2021 exclude income received by communities
under the CARES Act and other government grants.
(5)
Residential segment data for comparable
managed senior living communities represents financial data of
senior living communities managed for DHC and does not represent
financial results of ALR. Managed senior living communities' data
is included to provide supplemental information regarding the
operating results of the senior living communities from which ALR
earns residential management fees.
AlerisLife Inc.
Lifestyle Services Segment
Data
(dollars in thousands)
(unaudited)
Three Months Ended
December 31,
September 30,
June 30,
March 31,
December 31,
2021
2021
2021
2021
2020
Lifestyle
Services (1):
Revenues
$
15,626
$
15,382
$
17,453
$
19,553
$
20,256
Outpatient
12,848
12,747
13,688
13,098
13,449
Fitness
890
853
827
733
681
Other
1,888
1,782
2,938
5,722
6,126
Other operating income (2)
—
—
—
19
221
Operating expenses (3)
14,045
13,348
17,517
16,338
16,613
Operating (loss) income
1,581
2,034
(64
)
3,234
3,864
Operating margin
10.1
%
13.2
%
(0.4
)%
16.5
%
18.9
%
Number of inpatient clinics (end of
period)
10
10
10
37
37
Number of outpatient clinics (end of
period)
205
223
218
215
207
Number of fitness locations (end of
period)
60
61
43
42
14
_______________________________________
(1)
Includes Ageility rehabilitation clinics
and fitness operations as well as home healthcare operations.
(2)
Other operating income represents income
recognized for funds received under the CARES Act and other
government grants.
(3)
The three months ended December 31, 2021,
September 30, 2021 and June 30, 2021 includes restructuring
expenses of $23, $(310) and $1,720, respectively.
AlerisLife Inc.
Comparable Lifestyle Services
Segment Data
(dollars in thousands)
(unaudited)
Three Months Ended
December 31,
September 30,
June 30,
March 31,
December 31,
2021
2021
2021
2021
2020
Lifestyle
Services (1):
Revenues
$
12,891
$
12,952
$
13,887
$
13,200
$
13,480
Outpatient
11,808
11,854
12,779
12,211
12,539
Fitness
849
824
800
708
659
Other
234
274
308
281
282
Other operating income (2)
—
—
—
20
44
Operating expenses
11,677
11,653
12,314
11,419
11,848
Operating income
1,214
1,299
1,573
1,801
1,676
Operating margin
9.4
%
10.0
%
11.3
%
13.6
%
12.4
%
Number of inpatient clinics (end of
period)
—
—
—
—
—
Number of outpatient clinics (end of
period)
183
183
183
183
183
Number of fitness locations (end of
period)
52
58
40
40
14
_______________________________________
(1)
Includes Ageility outpatient
rehabilitation clinics and fitness operations as well as home
healthcare operations. Comparable outpatient includes data for 183
outpatient rehabilitation clinics that ALR has continuously
operated since October 1, 2020, exclusive of 27 inpatient
rehabilitation clinics that were closed during the three months
ended June 30, 2021 and an additional ten inpatient rehabilitation
clinics that are expected to be closed commencing in August 2022 as
part of the Strategic Plan. In addition, comparable clinics also
excludes 17 Ageility outpatient rehabilitation clinics that were
closed in December 2021 in senior living communities that were
transitioned in 2021 or closed in February 2022.
(2)
Other operating income represents income
recognized for funds received under the CARES Act and other
government grants.
AlerisLife Inc.
Owned Senior Living
Communities as of and for the Three Months Ended December 31,
2021
(dollars in thousands)
(unaudited)
No.
Community Name
State
Property Type (1)
Living Units
Residential Revenues
(4)
Gross Carrying Value
Net Carrying Value
Date Acquired
Most Recent Renovation
1
Morningside of Decatur (2)(5)
Alabama
AL
49
$
296
$
7,307
$
3,971
11/19/2004
2021
2
Morningside of Auburn (5)
Alabama
AL
42
294
2,090
1,018
11/19/2004
1997
3
The Palms of Fort Myers
(2)(5)
Florida
IL
218
1,651
7,218
3,866
4/1/2002
1988
4
Five Star Residences of Banta
Pointe (3)
Indiana
AL
121
763
10,938
6,411
9/29/2011
2006
5
Five Star Residences of Fort
Wayne (2)(5)
Indiana
AL
154
998
9,077
5,689
9/29/2011
1998
6
Five Star Residences of
Clearwater
Indiana
AL
88
356
14,182
9,028
6/1/2011
1999
7
Five Star Residences of Lafayette
(2)
Indiana
AL
109
502
11,719
7,558
6/1/2011
2000
8
Five Star Residences of
Noblesville (2)(5)
Indiana
AL
151
1,142
13,507
8,481
7/1/2011
2005
9
The Villa at Riverwood (2)(5)
Missouri
IL
112
663
4,968
3,309
4/1/2002
1986
10
Voorhees Senior Living (2)(5)
New Jersey
AL
104
907
19,607
13,372
7/1/2008
1999
11
Washington Township Senior Living
(2)
New Jersey
AL
93
815
26,170
17,321
7/1/2008
1998
12
Carriage House Senior Living
(5)
North Carolina
AL
98
949
9,869
5,330
12/1/2008
1997
13
Forest Heights Senior Living
(5)
North Carolina
AL
111
713
16,187
10,676
12/1/2008
1998
14
Fox Hollow Senior Living
(2)(5)
North Carolina
AL
77
1,000
25,554
17,262
7/1/2000
1999
15
Legacy Heights Senior Living
(2)(5)
North Carolina
AL
116
637
7,660
3,677
12/1/2008
1997
16
Morningside at Irving Park
(5)
North Carolina
AL
91
776
3,750
1,605
11/19/2004
1997
17
The Devon Senior Living
Pennsylvania
AL
84
500
32,667
15,129
7/1/2008
1985
18
The Legacy of Anderson (5)
South Carolina
IL
101
567
10,953
6,395
12/1/2008
2003
19
Morningside of Springfield
(2)(5)
Tennessee
AL
54
431
18,579
11,636
11/19/2004
1984
20
Huntington Place
Wisconsin
AL
127
836
2,422
1,519
7/15/2010
1999
Total
2,100
$
14,796
$
254,424
$
153,253
_______________________________________
(1)
AL is primarily an assisted living
community and IL is primarily an independent living community.
(2)
Encumbered property under ALR's $65,000
revolving credit facility, which was terminated on January 27,
2022.
(3)
Encumbered property under ALR's $6,783
mortgage note.
(4)
Excludes funds received under the CARES
Act recognized as other operating income.
(5)
Encumbered property under ALR's $95,000
Loan which closed on January 27, 2022.
Warning Concerning Forward-Looking
Statements
This press release contains statements that constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 and other securities laws.
Also, whenever AlerisLife uses words such as “believe”, “expect”,
“anticipate”, “intend”, “plan”, “estimate”, "will", “may” and
negatives or derivatives of these or similar expressions, ALR is
making forward-looking statements. These forward-looking statements
are based upon ALR’s present intent, beliefs or expectations, but
forward-looking statements are not guaranteed to occur and may not
occur. Actual results may differ materially from those contained in
or implied by ALR’s forward-looking statements. Forward-looking
statements involve known and unknown risks, uncertainties and other
factors, some of which are beyond ALR's control. For example:
- This press release includes statements regarding the actions
that have occurred, the progress that has been made and steps that
are expected to be taken in connection with the implementation and
execution of ALR's Strategic Plan and anticipated benefits related
to the Strategic Plan. ALR may not be able to implement all or
components of the Strategic Plan in a timely manner or at all, the
costs of such initiatives may be more than it expects, it may not
realize the benefits it anticipates from the Strategic Plan, and it
may not be able to achieve its objectives following implementation
and execution of the Strategic Plan.
- Ms. Potter states that ALR believes the disruption associated
with community transitions is now behind it and sees sustained
improvements in macroeconomic fundamentals. However, these trends
may not continue and improvements could decline due to a variety of
factors, including as a result of the COVID-19 pandemic. Moreover,
ALR may not benefit to the extent it expects from these
improvements even if they are sustained.
- Ms. Potter states that ALR is focused on optimizing its core
competencies. However, ALR may not achieve the optimization it
seeks and any optimization it may realize may not produce the
benefits it expects.
- The outperformance of our retained portfolio realized for the
quarter ending December 31, 2021 compared to the total DHC managed
portfolio for that period may not be achieved in future
periods.
- This press release states that ALR expects to continue to
diversify revenue through expanding its outpatient rehabilitation
business and growth of its other lifestyle services offerings
including opening new outpatient rehabilitation clinics and
expanding its fitness and other home-based service offerings within
and outside Five Star senior living communities. ALR may not be
able to achieve these objectives, including if its growth is
adversely impacted by the COVID-19 pandemic, and if it does not
have sufficient resources to fund the expansion or does not
identify new opportunities to grow or diversify the business.
- Ms. Potter cites improvements to occupancy, which may imply
that ALR will realize similar or better occupancies in future
periods. However, ALR and the senior living industry have
experienced occupancy challenges throughout the COVID-19 pandemic
and that may continue. In addition, ALR’s business is subject to
various risks, including changing trends and demands of older
adults, competition and other risks, many of which are outside
ALR’s control. As a result, ALR may not experience similar or
better occupancies in future periods.
- Ms. Potter states that ALR is well capitalized, which may imply
that it will maintain sufficient liquidity. However, as noted
above, ALR’s business is subject to risks. In addition, some of
ALR’s initiatives require capital investment and ALR has recently
experienced operating losses and operating losses in the past. As a
result, ALR may not maintain its current liquidity levels and its
capitalization may decline.
The information contained in ALR’s filings with the Securities
and Exchange Commission, or SEC, including under “Risk Factors” in
ALR’s periodic reports, or incorporated therein, identifies other
important factors that could cause ALR’s actual results to differ
materially from those stated in or implied by ALR’s forward-looking
statements. ALR’s filings with the SEC are available on the SEC’s
website at www.sec.gov.
You should not place undue reliance upon forward-looking
statements.
Except as required by law, ALR does not intend to update or
change any forward-looking statements as a result of new
information, future events or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220223006187/en/
Michael Kodesch, Director, Investor Relations (617) 796-8245
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