Home Health Business Quarterly: Assisted Living Update: Third quarter and year-to-date results

Alterra Healthcare Corp. (ALI) of Milwaukee reports 3Q01 revenues of $126.1 million, a 3% increase over revenues in 3Q00. It reported a net loss of $42.8 million.

During the quarter, the company operated 450 stabilized residences — those that have reached 95% occupancy or have been open for 12 months — that had revenues of $142.4 million. It operated 373 residences that were stabilized for the third quarter of 2000 and 2001. For these residences, third-quarter revenues were $112.1 million.

Alterra is in the process of restructuring. Its
disposition plan includes selling 82 residences. During the third quarter, it restructured two lease portfolios that included 52 residences. It sold two residences representing 85 beds for $2.2 million and three parcels of land for $1.8 million, and repaid $3 million of debt or lease obligations for a net gain on sale of $88,000. It also terminated three leases. In the fourth quarter, Alterra has sold 10 residences and one land parcel for a total of $28 million, repaying approximately $35 million of debt. Alterra operated or managed 351 residences as of Sept. 30, 2001.

American Retirement Corp. (ACR) of Nashville, TN reports that its 3Q01 revenues grew by $12.7 million to $66.1 million, an increase of 24% when compared to the same quarter in 2000. Resident and health care revenues were $64.8 million, compared with $52.4 million in 3Q00. The company had a quarterly loss of $4.4 million or 26 cents per share, compared with a loss of $1.9 million or 11 cents per share for the prior third quarter. Net income was $18.3 million, compared with $15.4 million in the third quarter of 2000. EBITDAR was $13.1 million for the 3Q01 compared to $11.8 million for the prior corresponding period.

For the nine-month period, revenues grew by $40.8 million to $189.8 million, a 27% increase over the period in 2000.During the quarter, the company acquired a 196-unit retirement centering Oak Park, IL, for $13.2 million. Since then, it has closed on the sale/leaseback of two assisted living communities, one in Boca Raton, FL, for $10.8 million and one in Arlington, TX, for $12.1 million. Part of the proceeds were used to repay $9.3 million of bankline debt and $7.4 million of mortgage debt, but the transactions will mean a $3.1 million loss in the fourth quarter.

American Retirement currently operates 66 senior living communities in 14 states.

ARV Assisted Living Inc. (SRS) of Costa Mesa, CA, reported total revenue for 3Q01 of $36.7 million, compared with $34.4 million for 3Q00. It had a net loss of $700,000 or 4 cents per share, compared with a net loss of $1.6 million or 9 cents per share for the same quarter in 2000. Total operating expenses were $35 million, compared with $34.2 million for the same quarter last year. Operating income was $1.7 million 3Q01, compared with $200,000 in 3Q00.

For the nine-month period total revenue was $108 million, compared with $104.3 million for the same period last year. Year-to-date net income was $1.7 million or 10 cents per share, including an extraordinary gain of $1.6 million and a $2.9 million gain on the sale of partnership interests, compared with $13.7 million for same period last year, including an extraordinary gain of $20.4 million. Net loss was $2.7 million or 16 cents per share, compared with a $6.7 million loss or 39 cents per share for the nine-month period in 2000. Total operating expenses were $103.9 million, compared with $105.8 million previously. Operating income was $4.1 million, a $5.6 million improvement over the $1.5 million loss from operations for the period previously.

ARV operates 57 assisted living communities containing approximately 6,800 units in 10 states.

Capital Senior Living Corp. (CSU) of Dallas, reported 3Q01 revenues of $17 million compared with $16 million for 3Q00. Net income of $1 million equaled earnings of approximately 5 cents per share. Net income plus depreciation was $2.8
million or 14 cents per share, compared with $2.5 million or 13 cents per share in the quarter of 2000. EBITDA for the quarter was $4.5 million, compared with $5.8 million for the same period previously.

For the year to date, the company reported revenues of $53.4 million, compared with $40.9 million in the first nine months of 2000, and net income of $2.1 million or 10 cents per share, compared with $3.9 million or 20 cents per share. Net income plus depreciation was $7.3 million or 37 cents per share, equal to the comparable period previously.

For the fourth quarter, the company expected to close on the sale of Amberleigh Retirement Community and retire the notes issued by NHP Retirement Housing Partners I Ltd., generating approximately $7 million of proceeds. It also expects to close the sale of three parcels of land for approximately $2 million. The company last two planned developments under construction are expected to open in the first quarter of 2002.

Capital Senior Living currently owns and/or operates 49 communities in 20 states.

ElderTrust (ETT) of Kennett Square, PA, reported revenue of $6.3 million for 3Q01, compared with $6 million for 3Q00. Net income was $400,000, or 6 cents per basic and diluted share, compared with a net loss of $600,000 or 8 cents per basic and diluted share for the third quarter of 2000. Operating income was $2.8 million or 39 cents per basic share and 37 cents per diluted share, compared with $1.8 million or 26 cents per basic and diluted share.

For the year to date, revenues were $19.1 million, compared with &19.5 million for the same period in 2000. Net loss was $200,000 or 3 cents per basic and diluted share, compared with $26.8 million or $3.76 per basic and diluted share for the previous nine-month period. Operating income was $7.4 million or $1.04 per basic share and 99 cents per diluted share, compared with a loss of $19.4 million or $2.73 per basic and diluted share in the same period previously. The nine-month results of operations included bad debt expenses of $20.3 million, compared with $42,000 of bad debt expense recorded during the same period in 2000.

In October a $10.2 million mortgage loan receivable was repaid and the proceeds used to reduce the balance outstanding on the company’s bank credit facility to approximately $22.8 million. Also, ElderTrust tenant Genesis Health Ventures Inc., which has emerged from bankruptcy, may repay approximately $12.2 million in mortgage loans before its June 2002 due date.

ElderTrust is an equity health care REIT with direct and indirect interests in 32 buildings and outstanding loans of $12.2 million in construction and term financing on four additional health care facilities. Emeritus Assisted Living (ESC) of Seattle, reported revenues of $34.9 million for 3Q01, compared with $30.8 million for 3Q00. Third-quarter loss was $846,000 before preferred stock dividends, compared with a $4.9 million loss in the comparable period. Operating income for the quarter was $953,000, compared with $492,000 for the same quarter in 2000.

For the nine-month period, operating income was $4.2 million, compared with $260,000 in the same 2000 period. Net loss was $9.2 million for the period, compared with $17.5 million for the nine-month 2000 period.Emeritus currently holds interests in 134 communities in 29 states and Japan.

Greenbriar Corp. (GBR) of Dallas, reported revenues of $8.2 million in 3Q01, compared with $10.3 million in 3Q00. Net loss for the quarter was $480,000 or 6 cents per common share, compared with a $1 million or 21 cents per share loss in the comparable quarter. Operating income was $2.8 million, compared with $4 million for the 2000 quarter, due to six fewer operating communities.

Greenbriar settled with LSOF Pooled Equity by trading 11 assisted living properties and $4 million in cash to reduce Greenbriar’s total debt and financial obligations by $64 million and its outstanding common shares by 1,054,202 shares. A 25-for-1 reverse stock split occurred Dec. 1. Greenbriar owns or manages 17 communities in 10 states.

Manor Care Inc. (HCR) of Toledo, OH, reported 3Q01 revenues of $688 million, compared with $605 million for 3Q00. Net income was $31 million, compared with $20 million for the quarter in 2000. Diluted third-quarter earnings were 30 cents per share, compared with 20 cents in 3Q00.

For the year to date, net revenues were $2 billion, up 13% compared with the prior year, and net income per share was 83 cents, up 38% compared with the same 2000 period, before charges.

During the third quarter, Manor Care acquired for $58 million the full rights and privileges of the lenders for 13 Alzheimer’s assisted living facilities that were part of a development joint venture with Alterra Healthcare Corp. Manor Care will contribute to Alterra’s management of the facilities and begin improvements during the fourth quarter following final transfer of ownership. During the quarter, Manor Care also purchased just over 1 million shares of stock, approximately 1% of the outstanding shares.