SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 3, 1998
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BROOKDALE LIVING COMMUNITIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-22253 36-4103821
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification Number)
77 West Wacker Drive, Suite 4400, Chicago, Illinois 60601
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 977-3700.
NOT APPLICABLE
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(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS.
(a) November 3, 1998 Press Release: On November 3, 1998, Brookdale
Living Communities, Inc. issued the Press Release attached hereto as Exhibit
99.1. Such Press Release is incorporated herein by reference.
(b) Exhibits:
Exhibit
No. Description
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99.1 Press Release of Brookdale Living Communities, Inc.
dated November 3, 1998.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BROOKDALE LIVING COMMUNITIES, INC.
Registrant
Dated: November 4, 1998 By: /s/ Robert J. Rudnik
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Robert J. Rudnik
Executive Vice President/
General Counsel
[BROOKDALE LIVING COMMUNITIES, INC. LETTERHEAD]
FOR FURTHER INFORMATION:
AT THE COMPANY: AT FLEISHMAN HILLARD:
Mark J. Schulte Sharon J. Erikson
President and Chief Executive Officer Vice President
(312) 977-3700 (312) 751-8878
FOR IMMEDIATE RELEASE
TUESDAY, NOVEMBER 3, 1998
BROOKDALE LIVING COMMUNITIES REPORTS THIRD QUARTER RESULTS
Chicago, November 3, 1998 - Brookdale Living Communities, Inc. (NASDAQ: BLCI), a
national provider of senior and assisted living services to the elderly, today
announced third quarter net income of $1.8 million, or $0.19 per diluted share,
on revenues of $20.5 million. Improved results were driven by continued strong
occupancy at the Company's facilities, as well as portfolio growth and
significant progress on properties under development.
Brookdale Living Communities Highlights for the Third Quarter of 1998
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- - Net income of $1.8 million, or $0.19 per diluted share, versus $0.03 in Q3
1997.
- - Third quarter total revenues of $20.5 million, an increase of 82% over
year-earlier period.
- - After-tax cash flow (as defined below) of $3.9 million, or $0.42 per basic
share, ($0.40 per diluted share).
- - Average occupancy rates on stabilized facilities of approximately 97% at
September 30, 1998.
- - A total of five of the Company's prototype properties under construction
(1,100 units), with an additional five properties in development (1,100
units or approximately 2,200 units in total)
- - Executed definitive agreements for the acquisition of two properties
totaling approximately 575 units, located in Northern California and the
Northeastern United States.
- - Closed on the 145 unit Ponce de Leon lease transaction on October 21, 1998.
"We are pleased to report that we are again in-line with analysts' expectations
this quarter - as we have done every quarter since the Company's IPO in May of
1997," said Mark J. Schulte, President and Chief Executive Officer of Brookdale,
"These results demonstrate our ability to execute our business plan, the
strength of our markets and validate our strategy in the senior and assisted
living sector."
Operating Results
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Total revenues in the third quarter of 1998 were $20.5 million, an 82% increase
from $11.2 million during the third quarter of 1997. Resident fees were
approximately $18.9 million, up 69% from the same period in the prior year,
attributable mainly to acquisitions and lease transactions consummated since
such time. "Same store" revenues for the eight properties operated for both the
full Q3 1997 and Q3 1998 increased approximately 5% to $11.5 million. At
September 30, 1998, the average occupancy of all of the Company's stabilized
facilities was approximately 97% and 95% overall. Total revenues included
approximately $1.5 million of property development fees related to projects
being developed for unaffiliated third party owners.
For all facilities owned or leased by the Company, the facility operating margin
(resident fees less facility operating expenses, divided by resident fees) for
the quarter ended September 30, 1998 was 43%, compared to 46% in the prior year
quarter ended September 30, 1997, the decrease being primarily due to the
Company commencing operation of six additional properties since Q3 1997, which
had lower average operating margins than Brookdale's historical same-store
margin levels. In Q3 1998, same store facility operating income increased
approximately 7% to $5.3 million with a facility operating margin of 47% versus
46% in Q3 1997. In addition, after-tax cash flow contribution of such same-store
facilities increased 28% from Q3 1997 to Q3 1998. Earnings before interest,
taxes, depreciation, amortization and rent ("EBITDAR") increased 77% to $8.5
million, with EBITDAR margin in Q3 1998 of 41%, compared to 43% in Q3 1997 due
to the addition of the six lower margin properties. After-tax cash flow (defined
as net income plus depreciation, amortization and deferred taxes) was $3.9
million, or $0.42 per basic share ($0.40 per diluted share), versus $0.19 in Q3
1997.
Other Recent Events
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Brookdale recently began initial construction of a 218-unit facility in Battery
Park City, New York, New York. This brings the total units under construction to
approximately 1,100 including the Austin, Texas, Southfield, Michigan, Glen
Ellyn, Illinois and Raleigh, North Carolina facilities.
In addition, the Company entered into purchase agreements to acquire two
additional facilities totaling approximately 575 units. One property is located
in Redwood City, California in the San Francisco Bay area, and the second is
located in the Northeastern United States. Both agreements are subject to
various confidentiality provisions and the respective transaction closings are
contingent on certain conditions customary for transactions of this type,
including completion of due diligence by Brookdale on such facilities. No
assurance can be given that the conditions to closing these transactions will be
satisfied in a timely manner, if at all.
Outlook
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"We are proving that our differentiated operating strategy within the senior and
assisted living sector, premised on building, acquiring and operating larger
facilities in urban and suburban settings while offering two pieces of the
continuum, independent and assisted living, is a profitable and solid strategy,
resulting in high occupancy and superior operating margins," Mr. Schulte said.
"Our outlook for growth through acquisitions, development and strong internal
portfolio growth looks better than ever," Schulte continued, "and the strength
of these fundamentals provides great visibility of earnings for Brookdale."
Brookdale Living Communities, Inc. is a provider of senior and assisted living
services to the elderly, with 17 facilities in eleven states containing an
aggregate of approximately 3,615 units in upscale urban and suburban
communities.
This news release contains certain forward-looking statements. When used in this
news release, the words, "believes", "expects", "anticipates", "estimates" and
similar words or expressions are generally intended to identify forward-looking
statements. These forward-looking statements involve risks and uncertainties,
such as the successful completion of the acquisition of the facilities which the
Company has under contract, the successful completion of development activities,
the successful integration of newly acquired or leased facilities with the
operations of the Company's existing facilities, fluctuations in operating
results, occupancy levels in the markets in which the Company competes, and/or
unanticipated changes in expenses or capital expenditures and other risks
detailed in the Company's filings with the Securities and Exchange Commission.
[FINANCIAL DATA TO FOLLOW]
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BROOKDALE LIVING COMMUNITIES, INC. AND SUBSIDIARIES (THE "COMPANY")
CONSOLIDATED STATEMENTS OF OPERATIONS OF THE COMPANY
(In Thousands, Except Per Share Amounts)
(Unaudited)
<TABLE>
Three Months Ended
September 30, 1998 September 30, 1997
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<S> <C> <C>
Revenue
Resident fees............................................... $ 18,868 $ 11,192
Development fees............................................ 1,542 -
Management fees............................................. 72 50
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Total revenue........................................ 20,482 11,242
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Expenses
Facility operating.......................................... 10,715 5,795
General and administrative.................................. 1,280 659
Lease expense............................................... 4,790 2,566
Depreciation and amortization............................... 1,146 1,158
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Total operating expenses............................. 17,931 10,178
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Income from operations............................... 2,551 1,064
Interest income............................................. 1,277 274
Interest expense............................................ (1,033) (1,158)
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Income before income tax (expense) benefit........... 2,795 180
Income tax (expense) benefit................................ (982) 10
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Net income........................................... $ 1,813 $ 190
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Basic earnings per common share............................. $ 0.19 $ 0.03
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Weighted average shares used for computing
basic earnings per common share......................... 9,569 7,175
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Diluted earnings per common share........................... $ 0.19 $ 0.03
============== =============
Weighted average shares used for computing
diluted earnings per common share....................... 9,771 7,317
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</TABLE>
<PAGE>
BROOKDALE LIVING COMMUNITIES, INC. AND SUBSIDIARIES (THE "COMPANY")
AND PREDECESSOR PROPERTIES (THE "PREDECESSOR" TO THE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS OF THE COMPANY AND
COMBINED STATEMENT OF OPERATIONS OF THE PREDECESSOR
(In Thousands, Except Per Share Amounts)
(Unaudited)
<TABLE>
Brookdale Living Predecessor
Brookdale Living Communities, Inc. Properties
Communities, Inc. period from period from
Nine Months May 7, 1997 January 1, 1997
Ended through through
September 30, 1998 September 30, 1997 May 6, 1997
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<S> <C> <C> <C>
Revenue
Resident fees............................................... $ 51,723 $ 17,731 $ 10,473
Development fees............................................ 4,120 - -
Management fees............................................. 188 82 -
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Total revenue........................................ 56,031 17,813 10,473
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Expenses
Facility operating.......................................... 28,993 9,278 5,872
General and administrative.................................. 3,776 1,137 -
Lease expense............................................... 12,782 4,110 3,042
Depreciation and amortization............................... 3,577 1,849 857
Property management fees.................................... - - 230
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Total operating expenses............................. 49,128 16,374 10,001
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Income from operations............................... 6,903 1,439 472
Interest income............................................. 2,918 400 68
Interest expense............................................ (2,891) (1,873) (830)
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Income (loss) before minority interest and income
tax (expense) benefit............................. 6,930 (34) (290)
Minority interest........................................... - - (138)
Income tax (expense) benefit................................ (2,485) 143 (236)
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Net income (loss).................................... $ 4,445 $ 109 $ (664)
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Basic earnings per common share............................. $ 0.47 $ 0.02
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Weighted average shares used for computing
basic earnings per common share......................... 9,489 7,051
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Diluted earnings per common share........................... $ 0.46 $ 0.02
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Weighted average shares used for computing
diluted earnings per common share....................... 9,738 7,144
============== =============
</TABLE>
