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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): July 30, 1998 (July 28, 1998)
AMERICAN RETIREMENT CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
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Tennessee 01-13031 62-1674303
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(State or Other Jurisdiction of Incorporation) (Commission File Number) (I.R.S. Employer
Identification No.)
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111 Westwood Place, Brentwood, Tennessee 37027
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (615) 221-2250
Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
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On July 28, 1998, American Retirement Corporation (the "Company")
announced selected results of operations for the second quarter ended June 30,
1998. See the Company's press release, dated July 28, 1998, included as
Exhibit 99 to this Form 8-K, for additional information with respect to such
results of operations.
Item 7. Financial Statements, Pro Forma Financial Information, and Exhibits.
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(c) Exhibits
99 Press Release, dated July 28, 1998
2
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SIGNATURES
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.
AMERICAN RETIREMENT CORPORATION
Date: July 30, 1998 By: /s/ W.E. Sheriff
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W.E. Sheriff
Chairman and Chief Executive Officer
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EXHIBIT INDEX
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No. Exhibit
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99 Press Release, dated July 28, 1998
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Exhibit 99
FOR IMMEDIATE RELEASE
AMERICAN RETIREMENT CORPORATION
ANNOUNCES SECOND QUARTER RESULTS
NASHVILLE, Tenn. - July 28, 1998 -- American Retirement Corporation (NYSE:ACR)
today announced its results for the second quarter ended June 30, 1998.
Net income for the quarter ended June 30, 1998 was $1.6 million, or $0.14
diluted earnings per share (fully taxed), compared to pro forma net income of
$768,000, or $0.08 pro forma diluted earnings per share (fully taxed), for the
same period in 1997. Total revenues for the quarter ended June 30, 1998
increased by 32.5%, to $30.3 million from $22.9 million for the second quarter
of last year while earnings before interest, taxes, depreciation, amortization
and rents (EBITDAR) increased by 47.1%, to $9.7 million from $6.6 million for
the comparable period of the prior year. Since the second quarter of 1997, the
Company has added capacity for approximately 5,700 residents through a
combination of strategic acquisitions and new residence openings, including the
recently consummated Freedom Group acquisition.
On a Same Community basis, prior to giving effect to the Company's home health
care operations, revenues increased by 8.1% from $19.7 million to $21.4 million
while EBITDAR increased by 9.3% from $7.6 million to $8.3 million during the
period, respectively. Including the effect of its home health operations, Same
Community revenues increased by 2.8% while EBITDAR decreased by 1.8%,
respectively, over the comparable period. As previously announced, the Company's
home health operations have been negatively impacted by recent changes in
Medicare reimbursement. Average stabilized occupancy for the Company's Same
Communities increased to 95% for the quarter ended June 30, 1998, as compared to
94% for the comparable period last year (stabilized communities are generally
defined as communities or expansions thereof that have achieved 95% occupancy or
been open at least 12 months).
Net income for the six month period ended June 30, 1998 was $3.1 million, or
$0.27 diluted earnings per share (fully taxed), compared to pro forma net income
of $1.4 million, or $0.14 pro forma diluted earnings per share (fully taxed),
for the six months ended June 30, 1997. Total revenues for the six month period
ended June 30, 1998 increased 31.5% to $58.4 million from $44.4 million for the
corresponding period of last year while EBITDAR increased 45.9%, to $18.7
million from $12.8 million for the comparable period of the prior year.
American Retirement Corporation is a national senior living and health care
services provider offering a broad range of care and services to seniors,
including independent living, assisted living, skilled nursing, and home health
care services. The Company currently operates 35 senior living communities in 14
states with an aggregate capacity for approximately 11,400 residents. Pursuant
to its growth strategy, the Company is developing and constructing 36 senior
living communities and has expansion projects in progress at seven of its
existing communities, which in the aggregate will add capacity for 4,500
residents. The Company also operates seven home health care agencies, including
two agencies managed for third-parties.
This press release and statements made by or on behalf of the Company relating
hereto may be deemed to constitute forward-looking information made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. These forward-looking statements may be affected by certain risks and
uncertainties described in the Company's filings with the Securities and
Exchange Commission. The Company's actual results could differ materially from
such forward-looking statements.
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AMERICAN RETIREMENT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
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Three Months Ended
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STATEMENT OF OPERATIONS DATA: June 30, 1998 June 30, 1997
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Revenues:
Resident and health care revenue $28,067 $ 22,442
Management services revenue 2,246 437
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Total revenues 30,313 22,879
Expenses:
Community operating expenses 18,322 14,120
Lease expense (net) 1,962 544
General and administrative 2,318 2,184
Depreciation and amortization 2,119 1,621
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Total operating expenses 24,721 18,469
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Income from operations 5,592 4,410
Other income (expense):
Interest expense (3,730) (3,354)
Interest income 560 214
Other 113 (31)
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Other income (expense), net (3,057) (3,171)
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Income before income taxes 2,535 1,239
Income tax expense 913 3,078
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Net income $ 1,622 ($1,839)
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Basic earnings per share $0.14
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Diluted earnings per share $0.14
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Pro forma earnings data (1):
Income before income taxes, as reported $ 1,239
Pro forma income tax expense 471
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Pro forma income $768
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Pro forma basic earnings per share $0.08
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Pro forma diluted earnings per share $0.08
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Weighted average shares used
Basic earnings per share 11,422 10,089
Common stock equivalents 165 35
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Diluted earnings per share 11,587 10,124
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At June 30, At December 31,
1998 1997
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BALANCE SHEET DATA:
Cash and cash equivalents $23,973 $44,583
Working Capital 27,901 47,744
Land, building and equipment, net 242,596 229,898
Total assets 339,229 317,154
Long-term debt, including current portion 254,568 237,354
Shareholders equity 57,281 53,918
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FOOTNOTE TO FINANCIAL TABLE:
(1) The 1997 pro forma adjustment for income taxes excludes the one-time charge
related to the conversion from a non-taxable limited partnership to a taxable
corporation in connection with the Company's initial public offering and
provides for income taxes as though the Company's predecessor partnership had
been subject to corporate income taxes for the entire 1997 period.
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AMERICAN RETIREMENT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
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STATEMENT OF OPERATIONS DATA:
Six Months Ended
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June 30, 1998 June 30, 1997
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Revenues:
Resident and health care revenue $54,465 $43,424
Management services revenue 3,925 965
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Total revenues 58,390 44,389
Expenses:
Community operating expenses 35,340 27,519
Lease expense (net) 3,647 1,072
General and administrative 4,371 4,070
Depreciation and amortization 4,093 3,206
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Total operating expenses 47,451 35,867
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Income from operations 10,939 8,522
Other income (expense):
Interest expense (7,308) (6,611)
Interest income 1,187 364
Other 87 (61)
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Other income (expense), net (6,034) (6,308)
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Income before income taxes 4,905 2,214
Income tax expense 1,766 3,078
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Net income $3,139 ($864)
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Basic earnings per share $0.27
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Diluted earnings per share $0.27
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Pro forma earnings data (1):
Income before income taxes, as reported $2,214
Pro forma income tax expense 841
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Pro forma income $1,373
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Pro forma basic earnings per share $0.14
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Pro forma diluted earnings per share $0.14
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Weighted average shares used
Basic earnings per share 11,421 9,734
Common stock equivalents 181 18
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Diluted earnings per share 11,602 9,752
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FOOTNOTE TO FINANCIAL TABLE:
(1) The 1997 pro forma adjustment for income taxes excludes the one-time charge
related to the conversion from a non-taxable limited partnership to a taxable
corporation in connection with the Company's initial public offering and
provides for income taxes as though the Company's predecessor partnership had
been subject to corporate income taxes for the entire 1997 period.
