Companies In The News

Advocat sees loss in FY99

Advocat (Franklin, TN) says it saw a net loss in FY99 ended Dec. 31 of $21.6 million, $3.98 per share, compared to a FY98 net loss of $3.9 million, 57 cents per share. Advocat reported FY99 total revenues of $182 million, down from FY98 revenues of $205.2 million.

The net loss for FY99 includes a $7.6 million tax provision, compared to a $1.7 million tax benefit in FY98 results, Advocat says.

IPC to make investment in Alterra

Alterra Healthcare (Brookfield, WI) investor IPC Advisors, which heads a group holding a 9.8% stake in Alterra, says it plans to make a significant equity investment in the company. IPC says it has had discussions with Alterra about a possible investment, reports the Milwaukee Journal Sentinel. The trust’s affiliates hold 2.2 million Alterra shares.

In other news, one of Alterra’s Minnesota assisted living facilities, Alterra Clare Bridge (Eagan, MN), must change its advertising and residential services as part of a settlement of a suit filed in early March by Wisconsin Attorney General Mike Hatch. In the lawsuit, Hatch alleged that the company engaged in deceptive trade practices and consumer fraud regarding the Eagan, MN, facility, reports the Wisconsin State Journal. Family members of the residents at Alterra Clare Bridge alleged the residents were neglected, the facility was understaffed, and the staff was poorly trained, reports the State Journal. As part of the settlement, Alterra must refrain from using brochures that advertise staffing levels or programs it does not have, reports the Associated Press. In addition, Alterra must pay to have a third-party monitor conduct site checks and produce monthly compliance reports for the courts.

Alterra reported FY99 ended Dec. 31 revenues of $376.2 million, an increase from FY98 revenues of $244.4 million. The company posted a net loss of $27.8 million, $1.26 per share, compared to a FY98 net income of $20.6 million, 92 cents per share. The company is pursuing a series of strategic initiatives, including the termination of all development activities to focus on completion of residences under construction and a significant reduction in the use of joint venture agreements. Alterra also is engaged in advanced negotiations with two investor groups to raise $150 million to $200 million of equity-related capital, the company says.

ARC authorizes debenture repurchase

American Retirement Corp.’s (ARC; Nashville, TN) board of directors has authorized the repurchase from time to time of its 5.75% convertible debentures. The company says it issued $138 million of five-year, 5.75% fixed-rate convertible debentures during 1997. Purchases, up to $30 million in market value, may be made in the open market or in privately negotiated transactions, ARC says. The company expects the program to be completed during FY00.

RV’s sale of 5 ALFs leads to loss

RV Assisted Living (Costa Mesa, CA) says that because of the sale of five communities, 4Q99 total revenues decreased to $34 million from 4Q98 revenues of $35.2 million. The company says it saw a 4Q99 net loss of $5.6 million, 34 cents per share, compared to a 4Q98 net loss of $32.9 million, $2.08 per share.

The net loss for the quarter increased by 10 cents, says ARV, due to the effect of write-downs for the impairment of long-lived assets of about $8.6 million, partially off set by an extraordinary gain of $7 million related to the early extinguishment of debt. The 4Q98 net loss included write-downs from the impairment of long-lived assets totaling $22.7 million, $1.43 per share, ARV says.

For the year, ARV says it posted a net loss, including charges, of $27.7 million, $1.73 per share, and total revenues of $138.2 million.

In October, ARV completed its previously announced divestiture of a 114-unit facility in Florida. The write-downs in 4Q99 include leasehold interests in 11 communities being marketed for sale in Florida, Massachusetts, Ohio, Michigan, Texas, and New Mexico, ARV says.

ALC reports FY99 net loss

Assisted Living Concepts (ALC; Portland, OR) says it saw FY99 ended Dec. 31 net revenues of $117.5 million, up from FY98 net revenues of $89.4 million. The company says, however, that it posted a net loss in FY99 of $28.9 million, $1.69 per share, compared to a FY98 net loss of $20.7 million, $1.27 per share.

The company saw total revenues of $32 million in 4Q99, ALC says, compared to 4Q98 revenues of $25.2 million. ALC recorded a net loss in 4Q99 of $6 million, 35 cents per share, compared to a 4Q98 net loss of $7.4 million, 43 cents per share. Operating results for both FY99 and 4Q99, ALC says, included unusual expenses of $1.8 million and $12.2 million, relating to the write-off of development sites, professional fees associated with the restatement of financial results, professional fees associated with the security-holder litigation, the final operations of ALC’s home health business, and severance costs.

Brookdale reports increase in FY99 revs

Brookdale Living Communities (Chicago) reported total revenues in FY99 ended Dec. 31 of $105.9 million, compared to FY98 total revenues of $77.7 million. The company says it posted a FY99 net income of $11.1 million, 90 cents per share, up from a FY98 net income of $6.7 million, 67 cents per share.

Brookdale recorded 4Q99 revenues of $27.6 million, compared to $21.7 million in 4Q98. The company saw a net income in 4Q99 of $2.8 million 23 cents per share, compared to a 4Q98 net income of $ 2.2 million, 21 cents per share. The 4Q99 net income included an extraordinary charge of $300,000, 2 cents per share in connection with a mortgage loan refinancing, Brookdale says.

On Dec. 27, Brookdale entered into an agreement to develop a site in Creve Coeur, MO, near St. Louis. And, Brookdale says, on March 6 the company opened the Meadows of Glen Ellyn, a 234-unit assisted living facility, which was developed and is now being managed for a third-party owner.

Capital adopts shareholders’ rights plan

Capital Senior Living’s (Dallas) board of directors has adopted a shareholders’ rights plan. Holders of the company’s common stock as of March 20 will receive preferred stock purchase rights as a dividend at the rate of one right for each share of common stock, Capital says. The rights are designed to assure that stockholders receive fair and equal treatment in the event of a proposed takeover and to guard against partial tender offers, squeeze outs, or other abusive tactics to gain control of the company without paying stockholders the full value of their investment. Capital says the rights are not being distributed in response to any specific takeover attempt. The rights will expire March 9, 2010, says Capital.

CareMatrix sends delayed interest payment

CareMatrix (Needham, MA) has sent the $3.6 million interest payment to the trustee for distribution to the bondholders of its $115 million, 6.25% convertible senior subordinated notes. The company said Feb. 15 that it would use the 30-day grace period before making the payment.

CareMatrix also has filed a notification with the Securities and Exchange Commission (Washington) extending the time for filing its annual report. Pending the final results of the yearly independent audit, the company expects to record pre-tax, non-recurring charges of at least $25 million in 4Q99. As a result, CareMatrix says, the company expects to record a loss for FY99.

(DSS; Winston-Salem, NC) reported a FY99 ended Dec. 31 net income of $73,273, 2 cents per share, compared to a FY98 net loss of $17.8 million, 1 cent per share. The company says it saw FY99 revenues of $5.1 million, up from FY98 revenues of $3.6 million. DSS says the FY99 net income includes a non-operating charge of $328,566, 10 cents per share, representing the cumulative effect of an accounting charge.

EdenCare opens three new facilities

EdenCare Senior Living Services (Atlanta) has opened three of its EdenBrook Senior Living Community prototypes, one in Charleston, SC, one in Jacksonville, FL, and one in Tallahassee, FL. As the company’s signature prototypes, the EdenBrook communities were created in response to the diverse lifestyles and needs of today’s senior citizens, EdenCare says. Over the next year, the company says, it will be opening other EdenBrook prototypes in Alabama, Georgia, Texas, and Kentucky.

Emeritus awaits approval for CA facility

Emeritus Assisted Living (Seattle) is waiting approval for a new assisted living facility in north Hollywood, CA. The National Academy of Recording Arts and Sciences, the group that stages the Grammy Awards, has proposed a six-story facility, Encore Hall, for music industry retirees. The project would cost more than $20 million and be developed jointly by Emeritus and the academy’s charitable wing, MusiCares.

Greenbriar’s FY99 revs down

Greenbriar Corp. (Dallas) says it saw FY99 ended Dec. 31 revenues of $41.3 million, compared to FY98 revenues of $53.5 million – a reduction the company says was due to the sale of facilities in the latter part of 1998 that did not fit its long-range strategic plan.

The company attributes a FY99 improvement in operating earnings to management’s focus on reducing operating and administrative costs, increasing rates, census growth, and reducing interest expense. Greenbriar posted a net loss in FY99 allocable to common shareholders, after a preferred stock dividend requirement, of $4.6 million, 62 cents per share, compared to a FY98 net loss allocable to common shareholders of $13.5 million, $1.86 per share.

While continuing to sell assets to refine its portfolio, Greenbriar says it is pursuing acquisitions that fit its strategy of adding communities with strong niche markets, particularly in geographic markets it currently serves.

In 4Q99, Greenbriar reported revenues of $10.4 million, down slightly from 4Q98 revenues of $11.4 million. The company says it saw a 4Q99 net income allocable to common shareholders of $724,000, 8 cents per share, compared to a 4Q98 net loss allocable to shareholders of $5.5 million, 76 cents per share.

Regent to open CA facility

Regent Assisted Living (Portland, OR) hopes to begin construction by June on a 100-unit assisted living center in Redlands, CA. The company says it is in the process of finishing plans, applying for permits and arranging financing, reports the Business Press of Ontario, CA. Regent has nine facilities in northern California.

Sunrise closes on new loan

Sunrise Assisted Living (McLean, VA) has closed a $75 million secured loan with GMAC-CC that it announced in early March. GMAC-CC is a Freddie Mac seller/servicer. The net proceeds of the loan will be used to repay $59 million of floating rate construction debt and to help fund Sunrise’s development and $30 million stock repurchase programs.

Sunrise is in the midst of a reorganization of its senior management responsibilities corresponding to its previously announced decision to manage and report its business operations as a parent company and three operating divisions, Sunrise Management Services, Sunrise Properties, and Sunrise Ventures. The realignment will consolidate and focus the management and growth of both existing and new lines of business and allow Sunrise to better serve its residents and its growing number of third-party property owners, the company says. Sunrise Assisted Living will act as the parent company of each division and will develop the company’s strategy and overall business plan, says Sunrise. Founder Paul Klaassen will continue to act as Sunrise’s chairman/CEO. And David Faeder, former Sunrise president, has been appointed vice chairman of Sunrise and will serve as chairman of a newly created board of directors investment committee.

The Sunrise Management Services division will provide assisted living management services for all homes owned or managed by Sunrise and will be run by Tiffany Tomasso. Sunrise Properties will run all of the company’s real estate operations and will be run by Chris Slavin. The Sunrise Ventures division will be responsible for the development of new business opportunities in senior care and services and will be run by Brian Swinton.

Sunrise says it recorded FY99 ended Dec. 31 total revenues of $255.2 million, a 50% increase over FY98 revenues of $170.7 million. The company posted a net income for the year of $20.2 million, 94 cents per share, compared to a FY98 net income of $22.3 million, $1.11 per share.

AL expert forms consulting firm

ZA Consulting (ZAC; Jenkintown, PA) and Irving Seldin, an assisted living expert, have formed a strategic alliance to provide enhanced development and management consulting services to the senior living industry. Seldin is a former member of the board of the Assisted Living Federation of America (Fairfax, VA) and is the founder and first president of the Pennsylvania Assisted Living Association. ZAC has created an integrated platform of services ranging from market analysis and feasibility, data products, and research tools to senior living marketing, Seldin says.