SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Earliest Event Reported: January 27, 2000
CAPITAL SENIOR LIVING CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 1-17445 75-2678809
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(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation or
organization)
14160 Dallas Parkway, Suite 300
Dallas, Texas 75240
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(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code (972) 770-5600
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ITEM 5. OTHER EVENTS.
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On January 27, 2000, Capital Senior Living Corporation (the "Company")
announced that it was accelerating certain strategic initiatives aimed at
increasing ownership of assets, enhancing cash flow from operations and
maximizing long-term shareholder value. These initiatives include developing
future projects on the Company's balance sheet, revising current development
efforts that result in a non-recurring fourth quarter 1999 charge, assisting
with the recapitalization of Triad Senior Living ("Triad") I, L.P. and the
engagement of Lehman Brothers by Triad and the Company to assist with
recapitalization alternatives for Triads II through V. Please see the attached
Press Release, dated January 27, 2000, for a more detailed explanation.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
99.1 Press Release dated January 27, 2000
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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, thereunto duly authorized.
Dated: February 15, 2000
CAPITAL SENIOR LIVING CORPORATION
By: /s/ David R. Brickman
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Name: David R. Brickman
Title: Vice President and General Counsel
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EXHIBIT INDEX
Exhibit No. Exhibit Description
99.1 Press Release dated January 27, 2000
EXHIBIT
99.1
CAPITAL SENIOR LIVING CORPORATION
ANNOUNCES STRATEGIC INITIATIVES
DALLAS - Jan. 27, 2000, 7:00 a.m. Eastern Time - Capital Senior Living
Corporation (NYSE: CSU), one of the country's largest operators and developers
of residential communities for senior adults, announced today that it is
accelerating strategic initiatives aimed at increasing ownership of assets,
enhancing cash flow from operations and maximizing long-term shareholder value.
Initiatives include developing future projects on the Company's balance sheet,
revising current development efforts that result in a non-recurring fourth
quarter 1999 charge, assisting with the recapitalization of Triad Senior Living
(Triad) I, L.P. and the engagement of Lehman Brothers by Triad and the Company
to assist with recapitalization alternatives for Triads II through V.
FUTURE DEVELOPMENT ON COMPANY BALANCE SHEET
"We are in a capital market and financial environment that has reduced the
availability of attractive financing for joint venture development. In light of
these factors, the Company is accelerating its strategic initiatives to move
developments of new communities onto the balance sheet. We believe it is in the
best interests of our shareholders to capture 100 percent of the benefits from
lower construction costs and higher appreciation potential," James A. Stroud,
the Company's Chairman, said.
"Developing projects on the Company's balance sheet will reduce the cost of each
community and maximize cash flow from operations once communities reach
stabilized occupancy," Lawrence A. Cohen, the Company's Chief Executive Officer,
said. "We believe that by simplifying our capital structure and increasing our
revenues and EBITDA from owned assets we are likely to attract a broader range
of investors and maximize long-term shareholder values."
FOURTH QUARTER CHARGE ANTICIPATED
The next step in the execution of the Company's strategic plan is to eliminate
future utilization of joint venture development arrangements and use the
strengths of its balance sheet to facilitate funding for its future
developments.
The Company also will record a $16 to $18 million, one-time, nonrecurring
pre-tax charge and other adjustments in the fourth quarter of 1999. This charge
primarily will consist of writing off receivables relating to development fees
from and loans to joint ventures that are unable to secure financing commitments
on attractive terms. These joint ventures are in various stages developing 19
Waterford communities. Six sites currently owned by the joint ventures are being
acquired by the Company in anticipation of constructing new Waterford
communities. The Company also is receiving the contractual rights for the
remaining sites, which are being evaluated.
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TRIAD I RECAPITALIZED
In December 1999, Lehman Brothers purchased from third parties 80 percent of the
limited partnership interests in Triad I for an investment of $12 million.
Lehman's investment enabled Triad I to repay the Company approximately $9
million in loans. The Company continues to own a 19 percent limited partnership
interest in Triad I and will continue to manage the communities with certain
purchase rights.
Triad I consists of five Waterford communities, along with two new communities
that are adjacent to communities owned by the Company. Two of the Waterford
communities are in final construction phases and the others are in lease up.
LEHMAN BROTHERS ENGAGED
The Company and Triad have engaged Lehman Brothers to assist in evaluating
recapitalization alternatives for Triads II through V, which currently are
constructing or developing 14 Waterford communities for which financing has been
obtained. These alternatives could take the form of the company exercising its
rights to acquire 100 percent of the interests in these joint ventures,
acquiring certain of the communities form the joint ventures, or assisting Triad
with the recapitalization of these joint ventures through an equity infusion
from a third party. Additional funds from the recapitalization of Triads I
through V would allow the Triads to repay loans from the Company, which would
facilitate the purchase of 13 senior housing communities from ILM Senior Living,
Inc. and ILM II Senior Living, Inc., and enable the Company to pursue
acquisitions, expansions of owned communities and/or future developments as the
Company continues to increase its owned assets and maximize shareholders' value.
IN SUMMARY
In consideration of the current financial environment, the Company is taking
steps to simplify its capital structure, capture 100 percent of the appreciation
of its assets, continue its growth and maximize value to shareholders through
enhanced cash flow and higher net asset values.
CONFERENCE CALL INFORMATION
Members of the Company's senior management team will discuss these strategic
initiatives via a telephone conference call today, Jan. 27, at 11:30 a.m.
Eastern Time. To participate in the conference call, please 719/457-2663
(confirmation code 888569). Conference call lines are limited, so those who are
interested are encouraged to phone in several minutes prior to the call's start
time. For the convenience of the Company's shareholders and the public, the
conference call will be recorded and available for replay through Thursday, Feb.
3, at 7:00 p.m. Eastern Time. To access the conference call replay, call
719/457- 0820 (confirmation code 888596). The conference call also will be made
available for playback via the Company's corporate website,
www.capitalsenior.com, by Tuesday, Feb. 1. The website version of the playback
will be available until Wednesday, Feb. 16, when the Company announces its
fourth quarter 1999 earnings.
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ABOUT THE COMPANY
Capital Senior Living Corporation is one of the nation's largest operators and
developers of residential communities for senior adults. The Company's operating
philosophy emphasizes a continuum of care, which integrates independent living,
assisting living and home care services, to provide residents the opportunity to
age in place.
The Company currently owns and/or operates 37 communities in 18 states with a
total capacity of approximately 6,000 residents. In the communities operated by
the Company, 82 percent of residents live independently and 18 percent of
residents require assistance with activities of daily living. The Company's
stabilized occupancy rate averaged 95 percent in 1999, and the average resident
age was 84.
The forward-looking statements in this release are subject to certain risks and
uncertainties that could cause results to differ materially, including, but not
without limitation to, the Company's ability to find suitable acquisition
properties at favorable terms, financing, licensing, business conditions, risks
of downturns in economic condition generally, and satisfaction of closing
conditions such as those pertaining to licensure. These and other risks are
detailed in the Company's reports filed with the Securities and Exchange
Commission.
Contact Veronica B. Marks, manager, Investor Relations, at 972/770-5600 for more
information.