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): March 4, 1999
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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)
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ITEM 5. OTHER EVENTS.
(a) March 4, 1999 Press Release: On March 4, 1999, 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
Number Description
99.1 Press Release of Brookdale Living Communities, Inc.
dated March 4, 1999.
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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: March 10, 1999 By: /s/ Robert J. Rudnik
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Robert J. Rudnik
Executive Vice President/
General Counsel
FOR FURTHER INFORMATION: Exhibit 99.1
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
THURSDAY, MARCH 4, 1999
BROOKDALE LIVING COMMUNITIES REPORTS FOURTH QUARTER RESULTS
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Chicago, March 4, 1999 - Brookdale Living Communities, Inc. (NASDAQ: BLCI), a
national provider of senior and assisted living services to the elderly, today
announced fourth quarter net income of $2.2 million, or $0.21 per diluted share,
on revenues of $21.7 million versus $0.3 million, $0.04 and $12.4 million
respectively in Q4 1997. For the full year 1998, Brookdale reported net income
of $6.7 million, or $0.67 per diluted share on revenues of $77.7 million.
Increased results were driven by internal as well as external portfolio growth
and significant progress on properties under development.
Brookdale Living Communities Highlights for the Fourth Quarter of 1998
- - Net income of $2.2 million, or $0.21 per diluted share, versus $0.04 in Q4
1997.
- - Fourth quarter total revenues of $21.7 million, an increase of 74% over
year-earlier period.
- - After-tax cash flow (as defined below) of $4.6 million, or $0.44 per basic
share, ($0.43 per diluted share) versus $1.5 million and $.20 per diluted
share in Q4 1997.
- - Average occupancy rates on stabilized facilities of approximately 97% at
December 31, 1998.
- - A total of five properties under construction (1,100 units), with an
additional five properties in development (1,100 units or approximately 2,200
units in total).
- - Closed on the 274 unit Woodside Terrace lease transaction on December 22,
1998.
- - Closed on the 285 unit River Bay Club lease transaction on January 19, 1999,
bringing the total number of units operated to 4,168, a 56% increase over Q4
1997.
"We are pleased to report that we are again in-line with analysts' expectations
this quarter and for year end 1998. We are proud of our track record of meeting
or beating expectations since the company's IPO in May of 1997," said Mark J.
Schulte, President and Chief Executive Officer of Brookdale, "These results
continue to demonstrate our ability to execute our business plan, the strength
of the markets in which we operate and validate our strategy in the senior and
assisted living sector."
Operating Results
Total revenues in the fourth quarter of 1998 were $21.7 million, a 74% increase
from $12.4 million during the fourth quarter of 1997. Resident fees were
approximately $20.1 million, up 62% from the same period in the prior year,
attributable mainly to lease transactions consummated since such time. "Same
store" revenues for the eight properties operated for both the full Q4 1997 and
Q4 1998 increased approximately 4% to $11.6 million. At December 31, 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 December 31, 1998 was 46%, compared to 47% in the prior year
quarter ended December 31, 1997, the decrease being primarily due to the Company
commencing operation of five additional properties since Q4 1997, which had
lower average operating margins than Brookdale's historical same-store margin
levels. In Q4 1998, same store facility operating income increased approximately
13% to $5.7 million with a facility operating margin of 49% versus 45% in Q4
1997.
Earnings before interest, taxes, depreciation, amortization and rent ("EBITDAR")
increased 102% to $9.6 million, with EBITDAR margin in Q4 1998 of 44%, compared
to 38% in Q4 1997. After-tax cash flow (defined as net income plus depreciation,
amortization and deferred taxes) was $4.6 million, or $.44 per basic share ($.43
per diluted share), versus $1.5 million or $.20 per diluted share in Q4 1997. In
addition, after-tax cash flow contribution of same-store facilities increased
59% from Q4 1997 to Q4 1998.
Other Recent Events
On January 19, 1999 the Company leased the 285 unit River Bay Club facility
located in Quincy, Massachusetts.
Outlook
"The fundamentals of our business continue to be excellent; high occupancy and
superior operating margins lead to excellent growth in earnings and after tax
cash flow," said Mr. Schulte. "We currently operate some of the best senior and
assisted living properties in the country and we are systematically adding to
our portfolio through acquisitions and development. However, the strength of
Brookdale's future lies in our skill as an operator, and I believe we have
proven that strength over the last seven quarters as a public company."
Brookdale Living Communities, Inc. is a provider of senior and assisted living
services to the elderly, with 19 facilities in eleven states containing an
aggregate of approximately 4,168 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.
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<TABLE>
<CAPTION>
BROOKDALE LIVING COMMUNITIES, INC. AND SUBSIDIARIES (THE "COMPANY")
CONSOLIDATED STATEMENTS OF OPERATIONS OF THE COMPANY
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended
December 31, 1998 December 31, 1997
----------------- -----------------
<S> <C> <C>
Revenue
Resident fees ...................................................................... $ 20,062 $ 12,374
Development fees ................................................................... 1,535 --
Management fees .................................................................... 73 50
-------- --------
Total revenue ................................................................ 21,670 12,424
-------- --------
Expenses
Facility operating ................................................................. 10,942 6,613
General and administrative ......................................................... 1,102 1,050
Lease expense ...................................................................... 5,094 2,832
Depreciation and amortization ...................................................... 1,276 1,119
-------- --------
Total operating expenses ..................................................... 18,414 11,614
-------- --------
Income from operations ....................................................... 3,256 810
Interest income .................................................................... 1,358 294
Interest expense ................................................................... (1,263) (1,147)
-------- --------
Income before income tax (expense) benefit ................................... 3,351 (43)
Income tax (expense) benefit ....................................................... (1,142) 415
-------- --------
Income (loss) from continuing operations before
extraordinary item ......................................................... 2,209 372
Extraordinary item (net of deferred tax benefit of $24) ............................ -- (36)
-------- --------
Net income ................................................................... $ 2,209 $ 336
======== ========
Basic earnings per common share .................................................... $ .21 $ .05
======== ========
Weighted average shares used for computing basic
earnings per common share ....................................................... 10,529 7,458
======== ========
Diluted earnings per common share .................................................. $ .21 $ .04
======== ========
Weighted average shares used for computing diluted
earnings per common share ....................................................... 10,672 7,671
======== ========
</TABLE>
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<TABLE>
<CAPTION>
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)
Brookdale Living Predecessor
Communities, Inc. Properties
Brookdale Living period from period from
Communities, Inc. May 7, 1997 January 1, 1997
Year Ended through through
December 31, 1998 December 31, 1997 May 6, 1997
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<S> <C> <C> <C>
Revenue
Resident fees ............................................................. $ 71,785 $ 30,105 $ 10,473
Development fees .......................................................... 5,655 -- --
Management fees ........................................................... 261 132 --
-------- -------- --------
Total revenue ....................................................... 77,701 30,237 10,473
-------- -------- --------
Expenses
Facility operating ........................................................ 39,935 15,892 5,872
General and administrative ................................................ 4,878 2,187 --
Lease expense ............................................................. 17,876 6,942 3,042
Depreciation and amortization ............................................. 4,853 2,967 857
Property management fees .................................................. -- -- 230
-------- -------- --------
Total operating expenses ............................................ 67,542 27,988 10,001
-------- -------- --------
Income from operations .............................................. 10,159 2,249 472
Interest income ........................................................... 4,275 694 68
Interest expense .......................................................... (4,153) (3,020) (830)
-------- -------- --------
Income (loss) before minority interest and income tax
(expense) benefit ................................................ 10,281 (77) (290)
Minority interest ......................................................... -- -- (138)
Income tax (expense) benefit .............................................. (3,627) 558 (236)
-------- -------- --------
Income (loss) from continuing operations
before extraordinary item .......................................... 6,654 481 (664)
Extraordinary item (net of deferred tax benefit of $24) ................... -- (36) --
-------- -------- --------
Net income (loss) ................................................... $ 6,654 $ 445 $ (664)
======== ======== ========
Basic earnings per common share ........................................... $ .68 $ .06
======== ========
Weighted average shares used for computing basic
earnings per common share .............................................. 9,751 7,208
======== ========
Diluted earnings per common share ......................................... $ .67 $ .06
======== ========
Weighted average shares used for computing diluted
earnings per common share .............................................. 9,978 7,351
======== ========
</TABLE>
