AlerisLife Inc. Announces Fourth Quarter and Year End 2021 Results
AlerisLife Inc. (Nasdaq: ALR) reported a net loss of $10.7 million for Q4 2021, a downturn from a $2.9 million income in Q4 2020. Average occupancy in owned senior living communities rose by 210 basis points, while managed communities saw a 70 basis point increase. The firm concluded a $95 million term loan post fiscal year-end to boost liquidity. AlerisLife underwent a rebranding from Five Star Senior Living, focusing on expanding lifestyle services. The company ended 2021 with $67 million in unrestricted cash, indicating stability for ongoing strategic transformations.
- 210 basis point increase in average occupancy for owned communities.
- Completed $95 million term loan enhancing liquidity.
- Strengthened leadership team with new Chief People and Customer Officers.
- Successful company rebrand to AlerisLife, focusing on lifestyle services.
- Net loss of $10.7 million for Q4 2021 compared to net income of $2.9 million in Q4 2020.
- EBITDA for Q4 2021 decreased to $(7.5) million from $5.8 million in Q4 2020.
- Operating margins for owned communities significantly negative at (25.2)%.
210 Basis Point Growth in Sequential Quarter Average Occupancy for Owned Communities
150 Basis Point Growth in Sequential Quarter Average Occupancy for Managed Communities
Completed Company Rebrand to
“We achieved several strategic milestones during and subsequent to the end of the fourth quarter, including rebranding ourselves as
During the fourth quarter, average occupancy for the 20 senior living communities owned by
We remain well capitalized to continue executing our strategic transformation, as we ended the year with unrestricted cash and cash equivalents of
Fourth Quarter Summary of Financial Results:
-
Net loss for the fourth quarter of 2021 was
, or$10.7 million per share, which included$0.34 of expenses in connection with the Reposition phase of the strategic plan announced on$2.3 million April 9, 2021 , or the Strategic Plan, partially offset by reimbursed by Diversified Healthcare Trust, or DHC, compared to net income of$1.0 million , or$2.9 million per share, for the fourth quarter of 2020.$0.09
-
Earnings before interest, taxes, depreciation and amortization, or EBITDA, for the fourth quarter of 2021 was
compared to$(7.5) million for the fourth quarter of 2020. Adjusted EBITDA, as described further below, was$5.8 million for the fourth quarter of 2021 compared to$(6.4) million for the fourth quarter of 2020.$5.2 million
- EBITDA and Adjusted EBITDA are non-GAAP financial measures. Reconciliations of net loss determined in accordance with GAAP to EBITDA and Adjusted EBITDA for the fourth quarter of 2021 and 2020 are presented later in this press release.
Substantially all of ALR's business is conducted by its two segments: (i) residential (formerly known as senior living) through its brand
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As of and for the Three Months Ended |
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Five Star |
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Residential Segment: |
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Month End Occupancy |
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Owned and Leased |
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72.7 |
% |
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72.9 |
% |
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69.7 |
% |
Managed |
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74.8 |
% |
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73.8 |
% |
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70.8 |
% |
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Comparable Communities (1) |
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Month End Occupancy |
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Owned |
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72.7 |
% |
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72.9 |
% |
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70.2 |
% |
Managed |
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75.2 |
% |
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74.6 |
% |
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74.2 |
% |
Operating Margin (2) |
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Owned |
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(25.2 |
)% |
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(5.1 |
)% |
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(20.6 |
)% |
Managed |
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3.5 |
% |
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7.1 |
% |
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11.1 |
% |
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As of and for the Three Months Ended |
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Ageility: |
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Lifestyle Services Segment: |
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Number of Clinics |
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Inpatient (3) |
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10 |
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10 |
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37 |
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Outpatient |
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205 |
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223 |
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207 |
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Number of Visits (in thousands) |
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Inpatient (3) |
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21 |
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20 |
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76 |
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Outpatient |
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148 |
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147 |
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150 |
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Average revenue per clinic (in thousands) |
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$ |
69.2 |
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$ |
69.3 |
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$ |
72.1 |
|
Operating margin (3) |
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9.1 |
% |
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10.2 |
% |
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13.2 |
% |
_______________________________________ |
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(1) |
Comparable communities provides data for 20 owned senior living communities and 120 managed senior living communities that ALR continuously owned or managed and operated through its brand Five Star since |
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(2) |
Operating margin is defined as operating revenue less operating expenses for the business unit divided by operating revenue. It is exclusive of Provider Relief Funds from the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, and other government grants recognized as other income. It is inclusive of 1,532 SNF units, which have been closed and are in the process of being repositioned, in 27 CCRCs that ALR will continue to manage. In addition, it excludes restructuring expenses for the three months ended |
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(3) |
All inpatient rehabilitation clinics will be closed as part of the Strategic Plan. During the three months ended |
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(4) |
Comparable clinics includes financial data for 183 outpatient rehabilitation clinics that ALR continuously operated since |
Company Rebrand and Name Change
On
Term Loan
On
Strategic Plan Update
On
- Reposition ALR's senior living management service offering to focus on larger independent living and assisted living as well as active adult communities, and exit skilled nursing by transitioning 108 senior living communities to new operators and closing approximately 1,500 SNF living units in retained CCRCs;
- Evolve through investment in an enhanced scalable corporate shared service center to support operations and growth and to deliver differentiated, customer focused senior living resident experiences across a segmented portfolio of communities; and
- Diversify with a focus on revenue diversification opportunities, including growing ALR's rehabilitation services and expanding lifestyle services to provide a choice based, financially flexible senior living resident experience and reach customers outside of senior living communities.
At
During and subsequent to the year ended
-
Amended the management arrangements with DHC on
June 9, 2021 , -
Transitioned the management of 107 senior living communities with approximately 7,400 living units to new operators, of which 38 communities with approximately 2,600 living units were transitioned during the three months ended
December 31, 2021 , and closed one senior living community with approximately 100 living units inFebruary 2022 , - Closed all 1,532 SNF living units in 27 managed CCRCs and began collaborating with DHC to reposition these SNF units,
- Closed 27 of the 37 planned Ageility inpatient rehabilitation clinics, and
-
For the remaining ten Ageility inpatient rehabilitation clinics, entered into agreements with the new operators to continue to provide these services through
August 2022 .
In connection with the Reposition phase of the Strategic Plan,
During and subsequent to the year ended
- Completed enhancements to the corporate technology infrastructure,
-
Invested in critical areas of the residential experience at Five Star senior living communities, including community wireless connectivity, resident transportation services and re-designed senior living community common areas and resident units, deploying
and$11.7 million of capital in the owned and managed communities, respectively,$103.4 million -
Invested in digital marketing infrastructure to effectively reduce cost per digital lead by approximately
70.0% , - Entered into a culinary services partnership with Compass Group to transform the senior living resident dining experience,
-
Entered into a collaboration with
Dispatch Health to enable senior living resident access to ambulatory care services in their community, - Standardized certain administrative functions through centralization efforts to enhance operating efficiency, and
-
Subsequent to year end, hired a
Chief People Officer and a Chief Customer Officer.
During the year ended
-
Opened 15 net new Ageility outpatient rehabilitation clinics, exclusive of the closure of 17 Ageility outpatient rehabilitation clinics in
December 2021 in Five Star senior living communities that were transitioned to new operators in 2021 or closed inFebruary 2022 , bringing the Ageility outpatient rehabilitation clinic total to 205, as ofDecember 31, 2021 , and -
Grew Ageility fitness revenues to
or a$3.3 million 38.1% increase over the same period in 2020.
Following the completion of the Reposition phase of the Strategic Plan, ALR continues to manage 120 senior living communities for DHC, representing 17,899 living units and approximately
Presented below is a summary of the units owned and managed by ALR as of
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Total Units (1) |
Independent living |
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10,423 |
Assisted living |
|
7,715 |
Memory care |
|
1,861 |
Total |
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19,999 |
_______________________________________ |
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(1) |
The units operated as of |
Presented below is a summary of the communities, units, average occupancy, month end occupancy, revenues and residential management fees for the Five Star senior living communities ALR manages for DHC, as of and for the three months ended
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Total |
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Communities |
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Units |
|
Average
|
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Month End
|
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Community
|
|
Management
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Independent and assisted living communities (3) |
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120 |
|
17,899 |
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|
$ |
155,729 |
|
$ |
9,121 |
Total |
|
120 |
|
17,899 |
|
|
|
|
|
$ |
155,729 |
|
$ |
9,121 |
_______________________________________ |
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(1) |
Represents the revenues of the Five Star senior living communities ALR managed for DHC. Managed senior living communities' revenues do not represent ALR's revenues and are included to provide supplemental information regarding the operating results of the Five Star senior living communities from which ALR earns residential management fees. |
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(2) |
Excludes residential management fees of |
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(3) |
Excludes one CCRC with approximately 100 living units that was closed in |
Presented below is a summary of the Ageility rehabilitation clinics ALR operated as of and for the three months ended
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As of and for the
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Retained |
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Number
|
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Total
|
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Average
|
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Adjusted
|
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Number
|
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Total
|
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Average
|
|
Adjusted
|
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|
|
10 |
|
$ |
1,654 |
|
$ |
165 |
|
|
|
— |
|
$ |
— |
|
$ |
— |
|
—% |
|
|
91 |
|
|
8,030 |
|
|
88 |
|
|
|
91 |
|
|
8,030 |
|
|
88 |
|
|
|
|
28 |
|
|
1,613 |
|
|
58 |
|
|
|
28 |
|
|
1,293 |
|
|
46 |
|
|
|
|
129 |
|
|
11,297 |
|
|
88 |
|
|
|
119 |
|
|
9,323 |
|
|
78 |
|
|
|
|
15 |
|
|
845 |
|
|
56 |
|
|
|
15 |
|
|
845 |
|
|
56 |
|
|
|
|
71 |
|
|
3,249 |
|
|
46 |
|
|
|
71 |
|
|
3,233 |
|
|
46 |
|
|
|
|
215 |
|
$ |
15,391 |
|
$ |
72 |
|
|
|
205 |
|
$ |
13,401 |
|
$ |
65 |
|
|
_______________________________________ |
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(1) |
Excludes revenue of |
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(2) |
As part of the Strategic Plan, 107 Five Star senior living communities managed for DHC were transitioned to new operators in 2021 and one senior living community was closed in |
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(3) |
Total Ageility revenue excludes home healthcare services, which are a part of the lifestyle services segment. |
|
(4) |
Other communities includes outpatient rehabilitation clinics at senior living communities not owned or managed by ALR. |
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(5) |
Adjusted EBITDA Margin is a non-GAAP financial measure. A reconciliation of operating margin to Adjusted EBITDA Margin is presented later in this press release. |
ALR currently expects to continue to diversify revenue through growth of its lifestyle service offerings, including opening new outpatient rehabilitation clinics and expanding its fitness and other home-based service offerings within and outside of Five Star senior living communities. Fitness offerings started as an extension of Ageility's outpatient rehabilitation services and, while representing only
Conference Call Information:
At
The conference call telephone number is (877) 329-4332. Participants calling from outside
A live audio webcast of the conference call will also be available in a listen-only mode on ALR’s website, www.alerislife.com. Participants wanting to access the webcast should visit ALR’s website about five minutes before the call. The archived webcast will be available for replay on ALR’s website following the call for about a week. The transcription, recording and retransmission in any way of ALR's fourth quarter ended
About
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Condensed Consolidated Statements of Operations |
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(amounts in thousands, except per share amounts) |
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(unaudited) |
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Three Months Ended
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Year Ended |
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2021 |
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2020 |
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2021 |
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2020 |
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REVENUES |
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|
|
|
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|
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|
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Lifestyle services |
|
$ |
15,626 |
|
|
$ |
20,256 |
|
|
$ |
68,014 |
|
|
$ |
82,032 |
|
Residential |
|
|
14,883 |
|
|
|
17,903 |
|
|
|
64,638 |
|
|
|
77,015 |
|
Residential management fees |
|
|
9,482 |
|
|
|
14,822 |
|
|
|
47,479 |
|
|
|
62,880 |
|
Total management and operating revenues |
|
|
39,991 |
|
|
|
52,981 |
|
|
|
180,131 |
|
|
|
221,927 |
|
Reimbursed community-level costs incurred on behalf of managed communities |
|
|
137,195 |
|
|
|
226,264 |
|
|
|
722,857 |
|
|
|
916,167 |
|
Other reimbursed expenses |
|
|
3,855 |
|
|
|
6,645 |
|
|
|
31,605 |
|
|
|
25,648 |
|
Total revenues |
|
|
181,041 |
|
|
|
285,890 |
|
|
|
934,593 |
|
|
|
1,163,742 |
|
|
|
|
|
|
|
|
|
|
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Other operating income |
|
|
— |
|
|
|
1,936 |
|
|
|
7,795 |
|
|
|
3,435 |
|
|
|
|
|
|
|
|
|
|
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OPERATING EXPENSES |
|
|
|
|
|
|
|
|
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Lifestyle services expenses |
|
|
13,908 |
|
|
|
16,492 |
|
|
|
59,322 |
|
|
|
66,853 |
|
Residential wages and benefits |
|
|
8,514 |
|
|
|
11,186 |
|
|
|
38,970 |
|
|
|
41,819 |
|
Other residential operating expenses |
|
|
7,893 |
|
|
|
7,870 |
|
|
|
30,311 |
|
|
|
28,116 |
|
Community-level costs incurred on behalf of managed communities |
|
|
137,195 |
|
|
|
226,264 |
|
|
|
722,857 |
|
|
|
916,167 |
|
General and administrative |
|
|
18,762 |
|
|
|
20,784 |
|
|
|
85,718 |
|
|
|
85,835 |
|
Restructuring expenses |
|
|
2,337 |
|
|
|
36 |
|
|
|
19,196 |
|
|
|
1,448 |
|
Depreciation and amortization |
|
|
2,961 |
|
|
|
2,913 |
|
|
|
11,873 |
|
|
|
10,997 |
|
Total operating expenses |
|
|
191,570 |
|
|
|
285,545 |
|
|
|
968,247 |
|
|
|
1,151,235 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating (loss) income |
|
|
(10,529 |
) |
|
|
2,281 |
|
|
|
(25,859 |
) |
|
|
15,942 |
|
|
|
|
|
|
|
|
|
|
||||||||
Interest, dividend and other income |
|
|
114 |
|
|
|
132 |
|
|
|
358 |
|
|
|
757 |
|
Interest and other expense |
|
|
(304 |
) |
|
|
(461 |
) |
|
|
(1,683 |
) |
|
|
(1,631 |
) |
Unrealized gain on equity investments |
|
|
175 |
|
|
|
640 |
|
|
|
730 |
|
|
|
480 |
|
Realized gain on sale of debt and equity investments |
|
|
25 |
|
|
|
3 |
|
|
|
218 |
|
|
|
425 |
|
Loss on termination of leases |
|
|
(1 |
) |
|
|
— |
|
|
|
(3,278 |
) |
|
|
(22,899 |
) |
(Loss) Income before income taxes and equity in losses of an investee |
|
|
(10,520 |
) |
|
|
2,595 |
|
|
|
(29,514 |
) |
|
|
(6,926 |
) |
(Provision) benefit for income taxes |
|
|
(40 |
) |
|
|
308 |
|
|
|
(234 |
) |
|
|
(663 |
) |
Equity in losses of an investee |
|
|
(177 |
) |
|
|
— |
|
|
|
(177 |
) |
|
|
— |
|
Net (loss) income |
|
$ |
(10,737 |
) |
|
$ |
2,903 |
|
|
$ |
(29,925 |
) |
|
$ |
(7,589 |
) |
|
|
|
|
|
|
|
|
|
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Weighted average shares outstanding—basic |
|
|
31,662 |
|
|
|
31,495 |
|
|
|
31,591 |
|
|
|
31,471 |
|
Weighted average shares outstanding—diluted |
|
|
31,662 |
|
|
|
31,612 |
|
|
|
31,591 |
|
|
|
31,471 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share—basic |
|
$ |
(0.34 |
) |
|
$ |
0.09 |
|
|
$ |
(0.95 |
) |
|
$ |
(0.24 |
) |
Net loss per share—diluted |
|
$ |
(0.34 |
) |
|
$ |
0.09 |
|
|
$ |
(0.95 |
) |
|
$ |
(0.24 |
) |
Reconciliation of Non-GAAP Financial Measures
(dollars in thousands)
(unaudited)
Non-GAAP financial measures are financial measures that are not determined in accordance with
ALR believes that net income (loss) is the most directly comparable financial measure, determined according to GAAP, to ALR’s presentation of EBITDA and Adjusted EBITDA. The following table presents the reconciliation of these non-GAAP financial measures to net income (loss) for the three months and year ended
|
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Net (loss) income |
|
$ |
(10,737 |
) |
|
$ |
2,903 |
|
|
$ |
(29,925 |
) |
|
$ |
(7,589 |
) |
Add (less): |
|
|
|
|
|
|
|
|
||||||||
Interest and other expense |
|
|
304 |
|
|
|
461 |
|
|
|
1,683 |
|
|
|
1,631 |
|
Interest, dividend and other income |
|
|
(114 |
) |
|
|
(132 |
) |
|
|
(358 |
) |
|
|
(757 |
) |
(Benefit) provision for income taxes |
|
|
40 |
|
|
|
(308 |
) |
|
|
234 |
|
|
|
663 |
|
Depreciation and amortization |
|
|
2,961 |
|
|
|
2,913 |
|
|
|
11,873 |
|
|
|
10,997 |
|
EBITDA |
|
|
(7,546 |
) |
|
|
5,837 |
|
|
|
(16,493 |
) |
|
|
4,945 |
|
Add (less): |
|
|
|
|
|
|
|
|
||||||||
Severance (1) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
282 |
|
Litigation settlement (2) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,473 |
|
Unrealized gain on equity investments |
|
|
(175 |
) |
|
|
(640 |
) |
|
|
(730 |
) |
|
|
(480 |
) |
Loss on termination of leases (3) |
|
|
1 |
|
|
|
— |
|
|
|
3,278 |
|
|
|
22,899 |
|
Net restructuring expenses (4) |
|
|
1,370 |
|
|
|
36 |
|
|
|
5,885 |
|
|
|
1,448 |
|
Long-lived asset impairment (5) |
|
|
— |
|
|
|
— |
|
|
|
890 |
|
|
|
— |
|
Adjusted EBITDA |
|
$ |
(6,350 |
) |
|
$ |
5,233 |
|
|
$ |
(7,170 |
) |
|
$ |
31,567 |
_______________________________________ |
||
(1) |
Costs incurred for the year ended |
|
(2) |
Represents costs incurred related to the settlement of a lawsuit and is included in other residential operating expenses in ALR's condensed consolidated statements of operations. The settlement was approved by the court, and paid by ALR, on |
|
(3) |
For the 2021 periods, represents the lease termination expenses related to the termination of four leased communities on |
|
(4) |
Includes costs incurred related to the Strategic Plan and the Restructuring Transactions for the three months and year ended |
|
(5) |
Represents asset impairments related to one leased community that had a fire on |
Reconciliation of Non-GAAP Financial Measures
(dollars in thousands)
(unaudited)
ALR believes that net income is the most directly comparable financial measure, determined according to GAAP, to ALR’s presentation of EBITDA and Adjusted EBITDA. The following table presents the reconciliation of these non-GAAP financial measures to net income for the three months ended
|
|
Three Months Ended |
||||||
|
|
Total |
|
Retained |
||||
Lifestyle services: |
|
|
|
|
||||
Revenue (1) |
|
$ |
15,626 |
|
|
$ |
15,290 |
|
Less: Home health services |
|
|
235 |
|
|
|
235 |
|
Less: Inpatient rehabilitation (2) |
|
|
— |
|
|
|
1,654 |
|
Total Ageility revenue (3) |
|
$ |
15,391 |
|
|
$ |
13,401 |
|
|
|
|
|
|
||||
Ageility: |
|
|
|
|
||||
Net income |
|
$ |
1,515 |
|
|
$ |
1,150 |
|
Add: Depreciation |
|
|
113 |
|
|
|
88 |
|
EBITDA |
|
|
1,628 |
|
|
|
1,238 |
|
Add: Restructuring expenses |
|
|
22 |
|
|
|
8 |
|
Adjusted EBITDA |
|
$ |
1,650 |
|
|
$ |
1,246 |
|
Adjusted EBITDA Margin |
|
|
10.7 |
% |
|
|
9.3 |
% |
_______________________________________ |
||
(1) |
Retained excludes revenues of |
|
(2) |
Retained excludes revenue for ten Ageility inpatient rehabilitation clinics that are expected to be closed commencing in |
|
(3) |
Total Ageility retained revenue includes revenue from outpatient rehabilitation clinics and fitness. |
|
||||||||
Condensed Consolidated Balance Sheets |
||||||||
(dollars in thousands, except per share amounts) |
||||||||
(unaudited) |
||||||||
|
|
|
|
|
||||
|
|
2021 |
|
2020 |
||||
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
66,987 |
|
|
$ |
84,351 |
|
Restricted cash and cash equivalents |
|
|
24,970 |
|
|
|
23,877 |
|
Accounts receivable, net |
|
|
9,244 |
|
|
|
9,104 |
|
Due from related person |
|
|
41,664 |
|
|
|
96,357 |
|
Debt and equity investments, of which |
|
|
19,535 |
|
|
|
19,961 |
|
Prepaid expenses and other current assets |
|
|
24,433 |
|
|
|
28,658 |
|
Total current assets |
|
|
186,833 |
|
|
|
262,308 |
|
|
|
|
|
|
||||
Property and equipment, net |
|
|
159,843 |
|
|
|
159,251 |
|
Operating lease right-of-use assets |
|
|
9,197 |
|
|
|
18,030 |
|
Finance lease right-of-use assets |
|
|
3,467 |
|
|
|
4,493 |
|
Restricted cash and cash equivalents |
|
|
982 |
|
|
|
1,369 |
|
Restricted debt and equity investments |
|
|
3,873 |
|
|
|
4,788 |
|
Other long-term assets |
|
|
12,082 |
|
|
|
3,967 |
|
Total assets |
|
$ |
376,277 |
|
|
$ |
454,206 |
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
37,516 |
|
|
$ |
23,454 |
|
Accrued expenses and other current liabilities |
|
|
31,488 |
|
|
|
42,208 |
|
Accrued compensation and benefits |
|
|
34,295 |
|
|
|
70,543 |
|
Accrued self-insurance obligations |
|
|
31,739 |
|
|
|
31,355 |
|
Operating lease liabilities |
|
|
699 |
|
|
|
2,567 |
|
Finance lease liabilities |
|
|
872 |
|
|
|
808 |
|
Due to related persons |
|
|
3,879 |
|
|
|
6,585 |
|
Mortgage note payable |
|
|
419 |
|
|
|
388 |
|
Total current liabilities |
|
|
140,907 |
|
|
|
177,908 |
|
|
|
|
|
|
||||
Long-term liabilities: |
|
|
|
|
||||
Accrued self-insurance obligations |
|
|
34,744 |
|
|
|
37,420 |
|
Operating lease liabilities |
|
|
9,366 |
|
|
|
17,104 |
|
Finance lease liabilities |
|
|
3,050 |
|
|
|
3,921 |
|
Mortgage note payable |
|
|
6,364 |
|
|
|
6,783 |
|
Other long-term liabilities |
|
|
256 |
|
|
|
538 |
|
Total long-term liabilities |
|
|
53,780 |
|
|
|
65,766 |
|
|
|
|
|
|
||||
Commitments and contingencies |
|
|
|
|
||||
|
|
|
|
|
||||
Shareholders’ equity: |
|
|
|
|
||||
Common stock, par value |
|
|
327 |
|
|
|
317 |
|
Additional paid-in-capital |
|
|
461,298 |
|
|
|
460,038 |
|
Accumulated deficit |
|
|
(281,064 |
) |
|
|
(251,139 |
) |
Accumulated other comprehensive income |
|
|
1,029 |
|
|
|
1,316 |
|
Total shareholders’ equity |
|
|
181,590 |
|
|
|
210,532 |
|
Total liabilities and shareholders' equity |
|
$ |
376,277 |
|
|
$ |
454,206 |
|
|
||||||||||||||||||||
Residential Segment Data |
||||||||||||||||||||
(dollars in thousands, except per unit amounts) |
||||||||||||||||||||
(unaudited) |
||||||||||||||||||||
|
|
Three Months Ended |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
2021 |
|
2021 |
|
2021 |
|
2021 |
|
2020 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Owned and Leased Senior Living Communities |
|
|
|
|
|
|
|
|
|
|
||||||||||
Independent and assisted living communities: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues |
|
$ |
14,883 |
|
|
$ |
16,320 |
|
|
$ |
16,378 |
|
|
$ |
17,057 |
|
|
$ |
17,903 |
|
Other operating income (1) |
|
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
7,774 |
|
|
|
1,715 |
|
Operating expenses |
|
|
18,574 |
|
|
|
17,895 |
|
|
|
21,012 |
|
|
|
20,414 |
|
|
|
21,181 |
|
Operating (loss) income |
|
|
(3,691 |
) |
|
|
(1,575 |
) |
|
|
(4,632 |
) |
|
|
4,417 |
|
|
|
(1,563 |
) |
Operating margin |
|
|
(24.8 |
)% |
|
|
(9.7 |
)% |
|
|
(28.3 |
)% |
|
|
17.8 |
% |
|
|
(8.0 |
)% |
Number of communities (end of period) |
|
|
20 |
|
|
|
20 |
|
|
|
24 |
|
|
|
24 |
|
|
|
24 |
|
Number of living units (end of period) (2) |
|
|
2,100 |
|
|
|
2,099 |
|
|
|
2,251 |
|
|
|
2,302 |
|
|
|
2,302 |
|
Average occupancy |
|
|
72.0 |
% |
|
|
69.9 |
% |
|
|
68.1 |
% |
|
|
68.3 |
% |
|
|
71.5 |
% |
Month end occupancy |
|
|
72.7 |
% |
|
|
72.9 |
% |
|
|
69.7 |
% |
|
|
68.2 |
% |
|
|
69.7 |
% |
RevPAR (3) |
|
$ |
2,349 |
|
|
$ |
2,411 |
|
|
$ |
2,425 |
|
|
$ |
2,479 |
|
|
$ |
2,596 |
|
RevPOR (4) |
|
$ |
3,192 |
|
|
$ |
3,375 |
|
|
$ |
3,524 |
|
|
$ |
3,630 |
|
|
$ |
3,550 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Managed Senior Living Communities (5) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential management fees |
|
$ |
9,482 |
|
|
$ |
11,220 |
|
|
$ |
12,927 |
|
|
$ |
13,850 |
|
|
$ |
14,822 |
|
Community-level revenues |
|
|
161,907 |
|
|
|
210,160 |
|
|
|
243,947 |
|
|
|
259,966 |
|
|
|
278,637 |
|
Other operating income (1) |
|
|
602 |
|
|
|
786 |
|
|
|
16,564 |
|
|
|
1,617 |
|
|
|
12,520 |
|
Community-level expenses (6) |
|
|
159,329 |
|
|
|
203,756 |
|
|
|
237,461 |
|
|
|
247,171 |
|
|
|
261,678 |
|
Community operating income |
|
|
3,180 |
|
|
|
7,190 |
|
|
|
23,050 |
|
|
|
14,412 |
|
|
|
29,479 |
|
Community operating margin |
|
|
2.0 |
% |
|
|
3.4 |
% |
|
|
8.8 |
% |
|
|
5.5 |
% |
|
|
10.1 |
% |
Number of communities (end of period) |
|
|
121 |
|
|
|
159 |
|
|
|
228 |
|
|
|
228 |
|
|
|
228 |
|
Number of living units (end of period) (2) |
|
|
18,005 |
|
|
|
20,669 |
|
|
|
25,482 |
|
|
|
26,963 |
|
|
|
26,969 |
|
Average occupancy |
|
|
73.7 |
% |
|
|
72.2 |
% |
|
|
69.5 |
% |
|
|
69.5 |
% |
|
|
72.2 |
% |
Month end occupancy |
|
|
74.8 |
% |
|
|
73.8 |
% |
|
|
71.3 |
% |
|
|
70.2 |
% |
|
|
70.8 |
% |
RevPAR (3) |
|
$ |
2,919 |
|
|
$ |
3,046 |
|
|
$ |
3,086 |
|
|
$ |
3,213 |
|
|
$ |
3,355 |
|
RevPOR (4) |
|
$ |
3,875 |
|
|
$ |
4,129 |
|
|
$ |
4,389 |
|
|
$ |
4,623 |
|
|
$ |
4,543 |
|
_______________________________________ |
||
(1) |
Other operating income represents income recognized for funds received under the CARES Act and other government grants. |
|
(2) |
Includes living units categorized as in service. As a result, the number of living units may vary from period to period for reasons other than the acquisition or disposition of senior living communities. |
|
(3) |
RevPAR is defined by ALR as resident fee revenues for the corresponding portfolio for the period divided by the average number of available units for the period, divided by the number of months in the period. Data for the three months ended |
|
(4) |
RevPOR is defined by ALR as resident fee revenues for the corresponding portfolio for the period divided by the average number of occupied units for the period, divided by the number of months in the period. Data for the three months ended |
|
(5) |
Managed senior living communities, other than ALR's residential management fees, represents financial data of senior living communities managed for DHC and does not represent financial results of ALR. Managed senior living communities' data is included to provide supplemental information regarding the operating results of the senior living communities from which ALR earns residential management fees. |
|
(6) |
The three months ended |
|
||||||||||||||||||||
Comparable Communities Residential Segment Data |
||||||||||||||||||||
(dollars in thousands, except per unit amounts) |
||||||||||||||||||||
(unaudited) |
||||||||||||||||||||
|
|
Three Months Ended |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
2021 |
|
2021 |
|
2021 |
|
2021 |
|
2020 |
||||||||||
Owned Senior Living Communities (1): |
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of communities (end of period) |
|
|
20 |
|
|
|
20 |
|
|
|
20 |
|
|
|
20 |
|
|
|
20 |
|
Number of living units (end of period) (2) |
|
|
2,100 |
|
|
|
2,099 |
|
|
|
2,099 |
|
|
|
2,099 |
|
|
|
2,098 |
|
Average occupancy |
|
|
72.0 |
% |
|
|
70.4 |
% |
|
|
68.3 |
% |
|
|
68.9 |
% |
|
|
72.4 |
% |
Month end occupancy |
|
|
72.7 |
% |
|
|
72.9 |
% |
|
|
70.1 |
% |
|
|
69.0 |
% |
|
|
70.2 |
% |
RevPAR (3) |
|
$ |
2,349 |
|
|
$ |
2,354 |
|
|
$ |
2,357 |
|
|
$ |
2,421 |
|
|
$ |
2,549 |
|
RevPOR (4) |
|
$ |
3,192 |
|
|
$ |
3,270 |
|
|
$ |
3,413 |
|
|
$ |
3,515 |
|
|
$ |
3,445 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Managed Senior Living Communities (1)(5): |
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of communities (end of period) |
|
|
120 |
|
|
|
120 |
|
|
|
120 |
|
|
|
120 |
|
|
|
120 |
|
Number of living units (end of period) (2) |
|
|
17,899 |
|
|
|
17,899 |
|
|
|
17,898 |
|
|
|
17,906 |
|
|
|
17,910 |
|
Average occupancy |
|
|
74.1 |
% |
|
|
73.4 |
% |
|
|
72.9 |
% |
|
|
72.7 |
% |
|
|
75.6 |
% |
Month end occupancy |
|
|
75.2 |
% |
|
|
74.6 |
% |
|
|
73.3 |
% |
|
|
73.2 |
% |
|
|
74.2 |
% |
RevPAR (3) |
|
$ |
2,900 |
|
|
$ |
2,941 |
|
|
$ |
2,961 |
|
|
$ |
2,946 |
|
|
$ |
3,054 |
|
RevPOR (4) |
|
$ |
3,831 |
|
|
$ |
3,922 |
|
|
$ |
4,018 |
|
|
$ |
4,051 |
|
|
$ |
3,954 |
|
_______________________________________ |
||
(1) |
Includes data for Five Star senior living communities that ALR has continuously owned or managed since |
|
(2) |
Includes living units categorized as in service. As a result, the number of living units may vary from period to period for reasons other than the acquisition or disposition of senior living communities. |
|
(3) |
RevPAR is defined by ALR as resident fee revenues for the corresponding portfolio for the period divided by the average number of available units for the period, divided by the number of months in the period. Data for the three months ended |
|
(4) |
RevPOR is defined by ALR as resident fee revenues for the corresponding portfolio for the period divided by the average number of occupied units for the period, divided by the number of months in the period. Data for the three months ended |
|
(5) |
Residential segment data for comparable managed senior living communities represents financial data of senior living communities managed for DHC and does not represent financial results of ALR. Managed senior living communities' data is included to provide supplemental information regarding the operating results of the senior living communities from which ALR earns residential management fees. |
|
||||||||||||||||||||
Lifestyle Services Segment Data |
||||||||||||||||||||
(dollars in thousands) |
||||||||||||||||||||
(unaudited) |
||||||||||||||||||||
|
|
Three Months Ended |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
2021 |
|
2021 |
|
2021 |
|
2021 |
|
2020 |
||||||||||
Lifestyle Services (1): |
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues |
|
$ |
15,626 |
|
|
$ |
15,382 |
|
|
$ |
17,453 |
|
|
$ |
19,553 |
|
|
$ |
20,256 |
|
Outpatient |
|
|
12,848 |
|
|
|
12,747 |
|
|
|
13,688 |
|
|
|
13,098 |
|
|
|
13,449 |
|
Fitness |
|
|
890 |
|
|
|
853 |
|
|
|
827 |
|
|
|
733 |
|
|
|
681 |
|
Other |
|
|
1,888 |
|
|
|
1,782 |
|
|
|
2,938 |
|
|
|
5,722 |
|
|
|
6,126 |
|
Other operating income (2) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
19 |
|
|
|
221 |
|
Operating expenses (3) |
|
|
14,045 |
|
|
|
13,348 |
|
|
|
17,517 |
|
|
|
16,338 |
|
|
|
16,613 |
|
Operating (loss) income |
|
|
1,581 |
|
|
|
2,034 |
|
|
|
(64 |
) |
|
|
3,234 |
|
|
|
3,864 |
|
Operating margin |
|
|
10.1 |
% |
|
|
13.2 |
% |
|
|
(0.4 |
)% |
|
|
16.5 |
% |
|
|
18.9 |
% |
Number of inpatient clinics (end of period) |
|
|
10 |
|
|
|
10 |
|
|
|
10 |
|
|
|
37 |
|
|
|
37 |
|
Number of outpatient clinics (end of period) |
|
|
205 |
|
|
|
223 |
|
|
|
218 |
|
|
|
215 |
|
|
|
207 |
|
Number of fitness locations (end of period) |
|
|
60 |
|
|
|
61 |
|
|
|
43 |
|
|
|
42 |
|
|
|
14 |
|
_______________________________________ |
||
(1) |
Includes Ageility rehabilitation clinics and fitness operations as well as home healthcare operations. |
|
(2) |
Other operating income represents income recognized for funds received under the CARES Act and other government grants. |
|
(3) |
The three months ended |
|
||||||||||||||||||||
Comparable Lifestyle Services Segment Data |
||||||||||||||||||||
(dollars in thousands) |
||||||||||||||||||||
(unaudited) |
||||||||||||||||||||
|
|
Three Months Ended |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
2021 |
|
2021 |
|
2021 |
|
2021 |
|
2020 |
||||||||||
Lifestyle Services (1): |
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues |
|
$ |
12,891 |
|
|
$ |
12,952 |
|
|
$ |
13,887 |
|
|
$ |
13,200 |
|
|
$ |
13,480 |
|
Outpatient |
|
|
11,808 |
|
|
|
11,854 |
|
|
|
12,779 |
|
|
|
12,211 |
|
|
|
12,539 |
|
Fitness |
|
|
849 |
|
|
|
824 |
|
|
|
800 |
|
|
|
708 |
|
|
|
659 |
|
Other |
|
|
234 |
|
|
|
274 |
|
|
|
308 |
|
|
|
281 |
|
|
|
282 |
|
Other operating income (2) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
20 |
|
|
|
44 |
|
Operating expenses |
|
|
11,677 |
|
|
|
11,653 |
|
|
|
12,314 |
|
|
|
11,419 |
|
|
|
11,848 |
|
Operating income |
|
|
1,214 |
|
|
|
1,299 |
|
|
|
1,573 |
|
|
|
1,801 |
|
|
|
1,676 |
|
Operating margin |
|
|
9.4 |
% |
|
|
10.0 |
% |
|
|
11.3 |
% |
|
|
13.6 |
% |
|
|
12.4 |
% |
Number of inpatient clinics (end of period) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Number of outpatient clinics (end of period) |
|
|
183 |
|
|
|
183 |
|
|
|
183 |
|
|
|
183 |
|
|
|
183 |
|
Number of fitness locations (end of period) |
|
|
52 |
|
|
|
58 |
|
|
|
40 |
|
|
|
40 |
|
|
|
14 |
|
_______________________________________ |
||
(1) |
Includes Ageility outpatient rehabilitation clinics and fitness operations as well as home healthcare operations. Comparable outpatient includes data for 183 outpatient rehabilitation clinics that ALR has continuously operated since |
|
(2) |
Other operating income represents income recognized for funds received under the CARES Act and other government grants. |
|
|||||||||||||||||||||
Owned Senior Living Communities as of and for the Three Months Ended |
|||||||||||||||||||||
(dollars in thousands) |
|||||||||||||||||||||
(unaudited) |
|||||||||||||||||||||
No. |
|
Community |
|
State |
|
Property Type (1) |
|
Living Units |
|
Residential
|
|
Gross Carrying
|
|
Net Carrying
|
|
Date Acquired |
|
Most Recent
|
|||
1 |
|
Morningside of |
|
|
|
AL |
|
49 |
|
$ |
296 |
|
$ |
7,307 |
|
$ |
3,971 |
|
|
|
2021 |
2 |
|
Morningside of |
|
|
|
AL |
|
42 |
|
|
294 |
|
|
2,090 |
|
|
1,018 |
|
|
|
1997 |
3 |
|
The Palms of |
|
|
|
IL |
|
218 |
|
|
1,651 |
|
|
7,218 |
|
|
3,866 |
|
|
|
1988 |
4 |
|
Five Star Residences of |
|
|
|
AL |
|
121 |
|
|
763 |
|
|
10,938 |
|
|
6,411 |
|
|
|
2006 |
5 |
|
Five Star Residences of |
|
|
|
AL |
|
154 |
|
|
998 |
|
|
9,077 |
|
|
5,689 |
|
|
|
1998 |
6 |
|
Five Star Residences of |
|
|
|
AL |
|
88 |
|
|
356 |
|
|
14,182 |
|
|
9,028 |
|
|
|
1999 |
7 |
|
Five Star Residences of |
|
|
|
AL |
|
109 |
|
|
502 |
|
|
11,719 |
|
|
7,558 |
|
|
|
2000 |
8 |
|
Five Star Residences of |
|
|
|
AL |
|
151 |
|
|
1,142 |
|
|
13,507 |
|
|
8,481 |
|
|
|
2005 |
9 |
|
The Villa at Riverwood (2)(5) |
|
|
|
IL |
|
112 |
|
|
663 |
|
|
4,968 |
|
|
3,309 |
|
|
|
1986 |
10 |
|
Voorhees Senior Living (2)(5) |
|
|
|
AL |
|
104 |
|
|
907 |
|
|
19,607 |
|
|
13,372 |
|
|
|
1999 |
11 |
|
Washington Township Senior Living (2) |
|
|
|
AL |
|
93 |
|
|
815 |
|
|
26,170 |
|
|
17,321 |
|
|
|
1998 |
12 |
|
Carriage House Senior Living (5) |
|
|
|
AL |
|
98 |
|
|
949 |
|
|
9,869 |
|
|
5,330 |
|
|
|
1997 |
13 |
|
|
|
|
|
AL |
|
111 |
|
|
713 |
|
|
16,187 |
|
|
10,676 |
|
|
|
1998 |
14 |
|
Fox Hollow Senior Living (2)(5) |
|
|
|
AL |
|
77 |
|
|
1,000 |
|
|
25,554 |
|
|
17,262 |
|
|
|
1999 |
15 |
|
|
|
|
|
AL |
|
116 |
|
|
637 |
|
|
7,660 |
|
|
3,677 |
|
|
|
1997 |
16 |
|
Morningside at |
|
|
|
AL |
|
91 |
|
|
776 |
|
|
3,750 |
|
|
1,605 |
|
|
|
1997 |
17 |
|
The Devon Senior Living |
|
|
|
AL |
|
84 |
|
|
500 |
|
|
32,667 |
|
|
15,129 |
|
|
|
1985 |
18 |
|
The Legacy of |
|
|
|
IL |
|
101 |
|
|
567 |
|
|
10,953 |
|
|
6,395 |
|
|
|
2003 |
19 |
|
Morningside of |
|
|
|
AL |
|
54 |
|
|
431 |
|
|
18,579 |
|
|
11,636 |
|
|
|
1984 |
20 |
|
|
|
|
|
AL |
|
127 |
|
|
836 |
|
|
2,422 |
|
|
1,519 |
|
|
|
1999 |
|
|
Total |
|
|
|
|
|
2,100 |
|
$ |
14,796 |
|
$ |
254,424 |
|
$ |
153,253 |
|
|
|
|
_______________________________________ |
||
(1) | AL is primarily an assisted living community and IL is primarily an independent living community. |
|
(2) |
Encumbered property under ALR's |
|
(3) |
Encumbered property under ALR's |
|
(4) | Excludes funds received under the CARES Act recognized as other operating income. |
|
(5) |
Encumbered property under ALR's |
Warning Concerning Forward-Looking Statements
This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Also, whenever
- This press release includes statements regarding the actions that have occurred, the progress that has been made and steps that are expected to be taken in connection with the implementation and execution of ALR's Strategic Plan and anticipated benefits related to the Strategic Plan. ALR may not be able to implement all or components of the Strategic Plan in a timely manner or at all, the costs of such initiatives may be more than it expects, it may not realize the benefits it anticipates from the Strategic Plan, and it may not be able to achieve its objectives following implementation and execution of the Strategic Plan.
-
Ms. Potter states that ALR believes the disruption associated with community transitions is now behind it and sees sustained improvements in macroeconomic fundamentals. However, these trends may not continue and improvements could decline due to a variety of factors, including as a result of the COVID-19 pandemic. Moreover, ALR may not benefit to the extent it expects from these improvements even if they are sustained.
-
Ms. Potter states that ALR is focused on optimizing its core competencies. However, ALR may not achieve the optimization it seeks and any optimization it may realize may not produce the benefits it expects.
-
The outperformance of our retained portfolio realized for the quarter ending
December 31, 2021 compared to the total DHC managed portfolio for that period may not be achieved in future periods.
- This press release states that ALR expects to continue to diversify revenue through expanding its outpatient rehabilitation business and growth of its other lifestyle services offerings including opening new outpatient rehabilitation clinics and expanding its fitness and other home-based service offerings within and outside Five Star senior living communities. ALR may not be able to achieve these objectives, including if its growth is adversely impacted by the COVID-19 pandemic, and if it does not have sufficient resources to fund the expansion or does not identify new opportunities to grow or diversify the business.
-
Ms. Potter cites improvements to occupancy, which may imply that ALR will realize similar or better occupancies in future periods. However, ALR and the senior living industry have experienced occupancy challenges throughout the COVID-19 pandemic and that may continue. In addition, ALR’s business is subject to various risks, including changing trends and demands of older adults, competition and other risks, many of which are outside ALR’s control. As a result, ALR may not experience similar or better occupancies in future periods.
-
Ms. Potter states that ALR is well capitalized, which may imply that it will maintain sufficient liquidity. However, as noted above, ALR’s business is subject to risks. In addition, some of ALR’s initiatives require capital investment and ALR has recently experienced operating losses and operating losses in the past. As a result, ALR may not maintain its current liquidity levels and its capitalization may decline.
The information contained in ALR’s filings with the
You should not place undue reliance upon forward-looking statements.
Except as required by law, ALR does not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.
View source version on businesswire.com: https://www.businesswire.com/news/home/20220223006187/en/
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