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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
ASSISTED LIVING CONCEPTS, INC.
(Exact name of registrant as specified in its charter)
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<CAPTION>
<S> <C> <C>
Nevada 1-13498 93-1148702
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation) Identification Number)
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9955 S.E. Washington Street, Suite 301
Portland, OR 97216
(Address of principal executive offices) (Zip Code)
(503) 252-6233
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last
report)
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Item 5. Other Events
------------
In a press release dated July 30, 1998, the registrant reported its
results of operations for the six months ended June 30, 1998. a copy of the
press release is attached hereto as Exhibit 99.1
Item 7. Financial Statements and Exhibits
---------------------------------
99.1 Press Release of the registrant dated July 30, 1998.
2
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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.
ASSISTED LIVING CONCEPTS, INC.
Date: July 30, 1998 By: /s/ Rhonda S. Marsh
----------------------
Name: Rhonda S. Marsh
Vice President and
Chief Accounting Officer
3
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EXHIBIT INDEX
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<CAPTION>
Sequentially
Exhibit No. Description Numbered Page
- ----------- ----------- -------------
<S> <C> <C>
99.1 Press Release of the registrant dated July 30, 1998
announcing financial results for the period ended June
30, 1998.
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4
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
For future information contact:
William McBride III Dr. Keren Brown Wilson
Chairman & Chief Executive Vice Chairman, President &
Officer Chief Operating Officer
(503) 252-6233 (503) 252-6233
ASSISTED LIVING CONCEPTS, INC. ANNOUNCES RESULTS FOR THE
THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1998
Portland, Oregon July 30, 1998 - Assisted Living Concepts, Inc. (AMEX:ALF)
(the "Company"), one of the nation's leading providers of assisted living, today
reported a 97% percent increase in revenues for the three months ended June 30,
1998 to $21.4 million from $10.8 million for the same period last year. Net
income before taxes for the three months ended June 30, 1998 was $3.7 million
compared to $1.3 million, a 185% increase, for the same period last year,
excluding a non-recurring charge of $8.5 million. The components of the non-
recurring charge consist primarily of write offs of (I) goodwill related to the
Company's home health operations which are being scaled back in light of the
current legislative and reimbursement environment, (ii) certain acquired
development sites which are not being developed due to competitive and market
conditions and (iii) commitment fees related to acquired sites which will not be
used in light of favorable financing alternatives.
For the three months ended June 30, 1998, net income (loss) was $(4.4)
million , or $(.28) per diluted share, including the effects of the non-
recurring charge. Excluding the non-recurring charge, the Company would have
reported net income of $2.3 million, or $.14 per diluted share, for the three
months ended June 30, 1998, compared to $967,000, or $.09 per diluted share, for
the same period last year, a 139% increase.
For the six months ended June 30, 1998, revenues increased 100% percent
to $40.3 million from $20.1 million for the same period last year. Net income
for the six months ended June 30, 1998, excluding the cumulative effect of $2.8
million for the early adoption of AICPA's Statement of Position (SOP) 98-5,
"Reporting on the Cost of Start-up Activities" and the non-recurring charge of
$8.5 million, was $4.3 million or $.25
Page 1
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per diluted share as compared to 1.6 million or $.15 per diluted share for the
same period in 1997, a 169% increase. The Company had previously capitalized
certain expenditures incurred prior to the opening of a facility, which are no
longer capitalizable with the implementation of SOP 98-5.
Net (loss) income, including the cumulative effect of the early adoption of
SOP 98-5 and the non-recurring charge for the six months ended June 30, 1998 was
$(5.1) million, or $(.32) per diluted share, compared to $1.6 million or $.15
per diluted share, for the same period last year.
DEVELOPMENT
- -----------
For the quarter ended June 30, 1998, the Company added 16 residences with
677 units, bringing the total number of residences to 161 with 6,137 units.
This represents an increase of 65 residences with 2,734 units or an 80% increase
over the number of units at June 30, 1997.
At June 30, 1998, the Company had 33 residences with 1,332 units under
construction (11 of which have certificates of occupancy) and 34 residences with
1,349 units under development (i.e., the site is under control and development
activities have commenced) which will result upon the completion of these units
in a total Company capacity of 8,380 units. The Company currently operates in
Oregon, Washington, Idaho, Arizona, Texas, Nebraska, New Jersey, Ohio, Indiana,
Iowa, South Carolina, Louisiana and Pennsylvania with residences under
construction and development in many of its existing markets as well as two
additional states.
Page 2
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CURRENT ACQUISITIONS & OTHER DEVELOPMENT
- ----------------------------------------
In April, the Company purchased two Texas assisted living residences (116
units) for approximately $5.2 million. The two residences have already reached
stabilized occupancy and are of a similar building model to the Company's
internal development, expanding the Company's operating base in Texas to 39
residences (1,476 units).
In addition, the Company is expanding the majority of its 30 unit
residences in Texas, which are full with waiting lists, by an additional 6 to 10
units. The Company opened three of these expansions in July and currently has
an additional three under construction. The Company expects that this will be
an on-going program, which will be expanded to other locations, as market
conditions warrant.
Effective June 30, 1998, the Company purchased a 48 unit assisted living
facility in Alexandria, Louisiana. This addition will compliment other
facilities under construction and development in this state.
FINANCING
- ---------
During the second quarter, the Company completed a number of financings
from various sources. In April, the Company issued $75.0 million of 5.625%
convertible subordinated debentures due 2003. In July, the Company closed on a
variable $13.2 million tax exempt bond financing at an all inclusive variable
rate of approximately 5%. These bonds are secured by seven residences in Ohio.
Additionally, the Company completed another mortgage financing raising $6.6
million at a fixed rate of 7.6%.
As a result of these closings, the Company currently has cash in excess of
$90 million which will enable the Company to continue to own a greater
percentage of its residences.
The Company also announced plans in May to repurchase 500,000 shares of its
common stock, of which the Company has currently repurchased 200,000 shares.
Purchases will be made in the open market, or in negotiated transactions, at
such times and at such prices as management may decide. The Company believes
that the shares represent an excellent investment to the Company at this time.
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The Company owns, operates, and develops assisted living residences for
older adults who need assistance with the activities of daily living, such as
bathing and dressing. In addition to housing, the Company provides personal
care, support services and makes nursing services available according to the
individual needs of its residents and as permitted by state regulation. This
combination of housing and services will provide a cost efficient alternative
and an independent lifestyle for individuals who do not require the broader
array of medical and health services provided by nursing facilities.
This press release contains certain forward-looking statements that are
subject to risk and uncertainty. There can be no assurance that these future
results will be achieved. Readers are cautioned to refer to the Company's
Annual Report on Form 10-K for the year ended December 31, 1997 filed with the
Securities and Exchange Commission for a description of factors which could
affect the Company's performance.
#####
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Quarterly Data
Press Release
6/30/98
ASSISTED LIVING CONCEPTS, INC.
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
-------------------------------------------------
Three Three
Months Ended Months Ended
30-Jun-97 30-Jun-98
------------------------------------------------
<S> <C> <C> <C> <C>
Revenue $10,848 100.0% $21,353 100.0%
General operating expenses 6,557 60.4% 13,139 61.5%
---------------- ----------------
General operating income 4,291 39.6% 8,214 38.5%
Corporate general and aministrative 676 1,389
Building rentals 2,009 3,937
Depreciation and amortization 702 1,224
------- -------
Total operating expenses 3,387 6,550
------- -------
Operating income 904 1,664
Interest expense (245) (380)
Interest income 153 946
Other income 482 1,429
Non-recurring charge - (8,495)
------- -------
Net income (loss) before income taxes $ 1,294 $(4,836)
(Provision) benefit for income taxes $ (327) 458
------- -------
Net income (loss)before cumulative effect $ 967 (4,378)
Cumulative effect (net of taxes of $1,187) $ - -
------- -------
Net Income (loss) $ 967 $(4,378)
======= =======
Net income (loss) per common share before cum eff (basic) $0.09 ($0.28)
Net income (loss) per common share (basic) $0.09 ($0.28)
Net income (loss) per common share before cum effect (diluted) $0.09 ($0.28)
Net income (loss) per common share (diluted) $0.09 ($0.28)
Weighted-average common shares outstanding (basic) 11,044 15,749 (a)
Weighted-average common shares outstanding (diluted) 13,280 15,749 (a)
-------------------------------------------------
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<CAPTION>
-------------------------------------------------
Six Six
Months Ended Months Ended
30-Jun-97 30-Jun-98
-------------------------------------------------
<S> <C> <C> <C> <C>
Revenue $20,092 100.0% $40,296 100.0%
General operating expenses 12,249 61.0% 24,725 61.5%
---------------- ----------------
General operating income 7,843 39.0% 15,571 38.5%
Corporate general and aministrative 1,317 2,448
Building rentals 3,569 7,839
Depreciation and amortization 1,208 2,089
------- -------
Total operating expenses 6,094 12,376
------- -------
Operating income 1,749 3,195
Interest expense (408) (653)
Interest income 276 1,645
Other income 482 2,804
Non-recurring charge - (8,495)
------- -------
Net income (loss) before income taxes $ 2,099 $(1,504)
(Provision) benefit for income taxes $ (468) (809)
------- -------
Net income (loss)before cumulative effect $ 1,631 (2,313)
Cumulative effect (net of taxes of $1,187) $ - (2,770)
------- -------
Net Income (loss) $ 1,631 $(5,083)
======= =======
Net income (loss) per common share before cum eff (basic) $0.15 ($0.15)
Net income (loss) per common share (basic) $0.15 ($0.32)
Net income (loss) per common share before cum effect (diluted) $0.15 ($0.15)
Net income (loss) per common share (diluted) $0.15 ($0.32)
Weighted-average common shares outstanding (basic) 11,044 15,717 (a)
Weighted-average common shares outstanding (diluted) 13,281 15,717 (a)
-------------------------------------------------
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(a) Per FAS 128, basic and diluted weighted average common shares are the same
when a net loss is incurred.
- --------------------------------------------------------------------------------
PRO FORMA NET INCOME, EXCLUDING NON-RECURRING CHARGE AND CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE
- --------------------------------------------------------------------------------
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<CAPTION>
------------------------------------
Three Six
Months Ended Months Ended
30-Jun-98 30-Jun-98
------------------------------------
<S> <C> <C>
Pro forma net income before income taxes, excluding non-recurring $ 3,659 $ 6,991
charge and cumulative effect of change in accounting principle
Provision for income taxes (1,390) (2,657)
------- -------
Pro forma net income, excluding non-recurring charge and
cumulative effect of change in accounting principle 2,269 4,334
Pro forma net income per common share, excluding non-recurring charge
and cumulative effect of change in accounting principle (basic) $0.14 $0.28
Pro forma net income per common share, excluding non-recurring charge
and cumulative effect of change in accounting principle (diluted) $0.14 $0.25
Weighted-average common shares outstanding (basic) 15,749 15,717
Weighted-average common shares outstanding (diluted) 17,944 17,958
------------------------------------
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Quarterly Data
Press Release
6/30/98
- --------------------------------------------------------------------------------
COMPILATION OF STABILIZED AND START-UP RESIDENCES
- --------------------------------------------------------------------------------
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<CAPTION>
---------------------------------------------------------------------------------------
Corporate and Three
Stabilized Start-up Ancillary Months Ended
Residences/1/ Residences/2/ Services 30-Jun-98
------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue $12,830 100.0% $ 7,427 100.0% $ 1,096 100.0% $21,353 100.0%
General operating expenses 7,278 56.7% 5,045 67.9% 816 13,139 61.5%
------- ------ ------- ------ ------- ------ ------- ------
General operating income 5,552 43.3% 2,382 32.1% 280 25.5% 8,214 38.5%
Corporate general and administrative - - 1,389 1,389
Building rentals 2,672 1,211 54 3,937
Depreciation and amortization 350 865 9 1,224
------- ------- ------- -------
Total operating expenses 3,022 2,076 1,452 6,550
------- ------- ------- -------
Operating income (loss) 2,530 306 (1,172) 1,664
Interest expense (496) (852) 968 (380)
Interest income 2 1 943 946
Other income - - 1,429 1,429
Other expense - - (8,495) (8,495)
------- ------- ------- -------
Net income before taxes 2,036 (545) (6,327) (4,836)
---------------------------------------------------------------------------------------
Residences operating 72 71 143
Units operating -
Average occupancy rate 93.2% 48.9% 70.9%
</TABLE>
/1/ Stabilized residences are those residences that have been operating for
twelve months or have achieved a stabilized occupancy of 95% or more as of
the beginning of the quarter.
/2/ Start-up residences are those residences that have not been operating for
twelve months and have not achieved a stabilized occupancy of 95% or more as
of the beginning of the quarter.
- --------------------------------------------------------------------------------
COMPILATION OF SAME STORE RESIDENCES
- --------------------------------------------------------------------------------
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<CAPTION>
------------------------------------------- --------------------------------------------
Three Three Six Six
Months Ended Months Ended Months Ended Months Ended
30-Jun-97 30-Jun-98 30-Jun-97 30-Jun-98
------------------------------------------- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue $10,089 100.0% $11,349 100.0% $16,472 100.0% $17,755 100.0%
General operating expense 5,845 57.9% 6,436 56.7% 9,530 57.9% 10,013 56.4%
------- ------ ------- ------ ------- ------ ------- ------
General operating income 4,244 42.1% 4,913 43.3% 6,942 42.1% 7,742 43.6%
Building rentals 1,901 2,467 3,141 4,020
Depreciation and amortization 504 276 592 360
------- ------- ------- -------
Total operating expenses 2,405 2,743 3,733 4,380
Operating income 1,839 2,170 3,209 3,362
Interest expense (888) (478) (1,166) (567)
Interest income 2 2 3 2
Other income (1) - (1) 1
Other expense
------- ------- ------- -------
Income before income taxes $ 952 $ 1,694 $ 2,045 $ 2,798
------------------------------------------- --------------------------------------------
Residences operating 66 66 51 51
Units operating 2,362 2,362 1,778 1,778
Average occupancy rate 83.7% 91.9% 89.0% 93.9%
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