AlerisLife Inc. Announces Third Quarter 2022 Results
AlerisLife Inc. (Nasdaq: ALR) reported its Q3 2022 financial results, showcasing a net loss of $8.5 million, slightly improved from $8.8 million in Q2 2022. The company observed a sequential occupancy growth of 290 basis points in owned senior living communities and 160 basis points in managed communities. Adjusted EBITDA reached $(0.5) million, compared to $(1.3) million in Q2. The restructuring plan is ongoing, with $3.8 million invested in capital improvements and a robust cash position of $79.1 million.
New executive appointments include a CFO and COO, aiming to enhance operational efficiency.
- Quarter-end occupancy in owned communities increased by 290 basis points.
- Adjusted EBITDA improved to $(0.5) million compared to $(1.3) million in Q2 2022.
- Company maintained a strong cash position of $79.1 million with no debt until 2025.
- Restructuring plan is on track with significant cost savings and executive team enhancements.
- Net loss for Q3 2022 was $8.5 million, a persistent financial strain.
- Restructuring plan incurs non-recurring expenses up to $3.0 million, impacting cash flow.
Combined Sequential Quarter End Occupancy Growth of
Sequential Quarter Management and Operating Revenues Growth of
Restructuring Plan on Track as Adjusted EBITDA Improvements Continue
“We continued to make steady progress implementing our plan to improve our operating results and drive efficiencies in our organization throughout the third quarter,” said
Third Quarter Summary of Financial Results:
- Quarter-end occupancy in ALR's owned senior living communities grew 290 basis points, or bps, relative to the end of the second quarter.
- Quarter-end occupancy for the managed portfolio increased 160 bps relative to the end of the second quarter.
-
Net loss for the third quarter of 2022 was
$8.5 million $0.27 $1.6 million $8.8 million $0.28 $10.2 million $0.32 $3.3 million $1.2 million $0.8 million -
Earnings before interest, taxes, depreciation and amortization, or EBITDA, for the third quarter of 2022 was
$(4.1) million $(4.4) million $(7.0) million $(0.5) million $(1.3) million $(3.3) million U.S. generally accepted accounting principles, or GAAP, to EBITDA and Adjusted EBITDA for the third quarter of 2022 and 2021 are presented later in this press release. The reconciliation of net loss to EBITDA and Adjusted EBITDA for the second quarter of 2022 is presented in the Form 8-K that ALR furnished onAugust 3, 2022 . -
RevPAR (resident fee revenues for the corresponding portfolio for the period divided by the average number of available units for the corresponding portfolio for the period, divided by the number of months in the period) for the comparable managed communities for the third quarter of 2022 was
$3,200 $3,077 $2,941 4.0% and8.8% , respectively. -
RevPAR for the comparable owned communities for the third quarter of 2022 was
$2,801 $2,560 $2,354 9.4% and19.0% , respectively.
Substantially all of ALR's business is conducted by its two segments: (i) its residential segment through its
Summary of Operational Results
|
|
As of and for the Three Months Ended |
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|
|
|
|
|
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Residential Segment: |
|
|
|
|
|
|
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Five Star: |
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|
|
|
|
|
||||||
Number of living units (end of period) |
|
|
|
|
|
|
||||||
Independent living |
|
|
10,422 |
|
|
|
10,460 |
|
|
|
10,628 |
|
Assisted living |
|
|
7,734 |
|
|
|
7,696 |
|
|
|
9,402 |
|
Memory care |
|
|
1,817 |
|
|
|
1,817 |
|
|
|
2,454 |
|
Skilled nursing |
|
|
— |
|
|
|
— |
|
|
|
284 |
|
Total living units |
|
|
19,973 |
|
|
|
19,973 |
|
|
|
22,768 |
|
|
|
|
|
|
|
|
||||||
RevPAR |
|
|
|
|
|
|
||||||
Owned and Leased (1) |
|
$ |
2,801 |
|
|
$ |
2,560 |
|
|
$ |
2,411 |
|
Managed |
|
$ |
3,200 |
|
|
$ |
3,077 |
|
|
$ |
3,046 |
|
Quarter End Occupancy |
|
|
|
|
|
|
||||||
Owned and Leased |
|
|
78.4 |
% |
|
|
75.5 |
% |
|
|
72.9 |
% |
Managed |
|
|
77.0 |
% |
|
|
75.4 |
% |
|
|
73.8 |
% |
|
|
|
|
|
|
|
||||||
Comparable Communities (2): |
|
|
|
|
|
|
||||||
RevPAR |
|
|
|
|
|
|
||||||
Owned |
|
$ |
2,801 |
|
|
$ |
2,560 |
|
|
$ |
2,354 |
|
Managed |
|
$ |
3,200 |
|
|
$ |
3,077 |
|
|
$ |
2,941 |
|
Quarter End Occupancy |
|
|
|
|
|
|
||||||
Owned |
|
|
78.4 |
% |
|
|
75.5 |
% |
|
|
72.9 |
% |
Managed |
|
|
77.0 |
% |
|
|
75.4 |
% |
|
|
74.6 |
% |
Operating Margin (3): |
|
|
|
|
|
|
||||||
Owned |
|
|
(15.9 |
)% |
|
|
(20.1 |
)% |
|
|
(24.4 |
)% |
Managed |
|
|
4.7 |
% |
|
|
8.4 |
% |
|
|
7.1 |
% |
|
|
As of and for the Three Months Ended |
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|
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Lifestyle Services Segment: |
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Ageility: |
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|
|
|
|
|
||||||
Number of Clinics and Locations (4) |
|
|
|
|
|
|
||||||
Inpatient clinics |
|
8 |
|
|
10 |
|
|
10 |
|
|||
Outpatient locations |
|
|
203 |
|
|
|
202 |
|
|
|
223 |
|
Number of Visits (in thousands) |
|
|
|
|
|
|
||||||
Inpatient clinics |
|
|
21 |
|
|
|
23 |
|
|
|
20 |
|
Outpatient locations |
|
|
156 |
|
|
|
153 |
|
|
|
147 |
|
|
|
|
|
|
|
|
||||||
Comparable Outpatient Locations (5): |
|
|
|
|
|
|
||||||
Caseload as a % of occupancy (6) |
|
|
24.6 |
% |
|
|
24.3 |
% |
|
|
24.6 |
% |
Operating margin (3) |
|
|
(1.2 |
)% |
|
|
(0.6 |
)% |
|
|
10.0 |
% |
___________________________ |
||
(1) |
|
The three months ended |
(2) |
|
Comparable Communities includes financial data for 20 owned senior living communities and 120 managed senior living communities that ALR continuously owned or managed and operated through its Five Star brand since |
(3) |
|
Operating margin is defined as operating revenue less operating expenses divided by operating revenue in each case for the business segment. For the Residential segment, it is inclusive of 59 SNF living units, which have been closed in one former CCRC. 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 operating income. In addition, it excludes restructuring expenses for the three months ended |
(4) |
|
During the three months ended |
(5) |
|
Comparable outpatient locations includes financial data for 185 outpatient rehabilitation locations that ALR continuously operated since |
(6) |
|
Represents the average number of Ageility customers divided by average total occupancy at each of the senior living communities where ALR operates Ageility outpatient rehabilitation locations. Occupancy is defined as the average total number of residents residing at the senior living communities. |
Operational Review
During the quarter ended
-
Reduce costs annually by a target of approximately
$2.0 million $3.3 million - Streamlining redundant business processes and reducing investments in non-core functions,
- rationalizing information technology systems to those that directly support core business functions, ensuring their optimal utilization, and
- continually assessing general and administrative expenses to identify cost savings opportunities.
-
Invest approximately
$3.3 million - Enhancing the executive leadership team with a Chief Operating Officer to oversee field and national operations and a Chief Financial Officer,
- investing in a scalable and agile national operations infrastructure to drive operational excellence and results, and
- establishing a centralized sales function with reinstituted regional sales support to focus on both sales and marketing efforts.
Based on A&M's operational review, on
- Aligned several functions, including sales, marketing, clinical and resident programming, under the national operations support function;
- Deployed sales support functions to directly support community level sales directors to focus on improved tour to move-in conversion rate;
-
Appointed a Chief Financial Officer, effective
September 19, 2022 , and a Chief Operating Officer, effectiveOctober 17, 2022 . In addition, ALR continues to invest in the sales and marketing function, including hiring a Vice President of Marketing, effectiveOctober 3, 2022 , and five sales directors; and -
Implemented approximately
$2.6 million $1.8 million
In addition to the restructuring plan, ALR achieved further cost savings of
In connection with implementing its restructuring plan, ALR expects to incur non-recurring cash expenses of up to
Summary of Senior Living Communities and Outpatient Rehabilitation Locations
Presented below is a summary of the communities, units, average occupancy, quarter 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
|
|
Total |
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|
|
Communities |
|
Units |
|
Average Occupancy |
|
Quarter End Occupancy |
|
Community Revenues (1) |
|
Management Fees |
||
Independent and assisted living communities |
|
120 |
|
17,889 |
|
|
|
|
|
$ |
171,684 |
|
$ |
9,477 |
___________________________ |
||
(1) |
|
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. |
Presented below is a summary of the Ageility outpatient rehabilitation locations ALR operated as of and for the three months ended
|
|
As of and for the
Three Months Ended |
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|
|
Number of Locations |
|
Total
|
|
Caseload as a % of occupancy (3) |
|
EBITDA Margin (4) |
|||
Outpatient Locations in DHC Owned Communities Managed by Five Star |
|
94 |
|
$ |
7,789 |
|
25.9 |
% |
|
(0.2 |
)% |
Outpatient Locations at ALR Owned Communities |
|
15 |
|
|
868 |
|
29.9 |
% |
|
4.6 |
% |
Outpatient Locations at Other Communities (5) |
|
94 |
|
|
4,124 |
|
21.7 |
% |
|
(8.3 |
)% |
Total Outpatient Locations |
|
203 |
|
$ |
12,781 |
|
24.3 |
% |
|
(2.5 |
)% |
___________________________ |
||
(1) |
|
Excludes revenue of |
(2) |
|
Total Ageility revenue includes fitness revenue. Total Ageility revenue excludes home health care services, which is part of the lifestyle services segment. |
(3) |
|
Represents the average number of Ageility customers divided by average total occupancy at each of the senior living communities where ALR operates Ageility outpatient rehabilitation locations. Occupancy is defined as the average total number of residents residing at the senior living communities. |
(4) |
|
EBITDA Margin is a non-GAAP financial measure and represents rehabilitation locations that are in service as of |
(5) |
|
Other communities includes outpatient rehabilitation locations at senior living communities not owned or managed by ALR. |
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 third quarter ended
About
Condensed Consolidated Statements of Operations (amounts in thousands, except per share amounts) (unaudited) |
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|
|
Three Months Ended
|
|
Nine Months
|
||||||||||||
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
REVENUES |
|
|
|
|
|
|
|
|
||||||||
Lifestyle services |
|
$ |
14,546 |
|
|
$ |
15,382 |
|
|
$ |
43,330 |
|
|
$ |
52,388 |
|
Residential |
|
|
17,514 |
|
|
|
16,320 |
|
|
|
48,994 |
|
|
|
49,755 |
|
Residential management fees |
|
|
9,477 |
|
|
|
11,220 |
|
|
|
27,380 |
|
|
|
37,997 |
|
Total management and operating revenues |
|
|
41,537 |
|
|
|
42,922 |
|
|
|
119,704 |
|
|
|
140,140 |
|
Reimbursed community-level costs incurred on behalf of managed communities |
|
|
137,768 |
|
|
|
177,231 |
|
|
|
396,352 |
|
|
|
585,662 |
|
Other reimbursed expenses |
|
|
3,354 |
|
|
|
5,678 |
|
|
|
10,869 |
|
|
|
27,750 |
|
Total revenues |
|
|
182,659 |
|
|
|
225,831 |
|
|
|
526,925 |
|
|
|
753,552 |
|
|
|
|
|
|
|
|
|
|
||||||||
Other operating income |
|
|
2 |
|
|
|
— |
|
|
|
44 |
|
|
|
7,795 |
|
|
|
|
|
|
|
|
|
|
||||||||
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
||||||||
Lifestyle services expenses |
|
|
14,562 |
|
|
|
13,536 |
|
|
|
42,112 |
|
|
|
45,414 |
|
Residential wages and benefits |
|
|
10,156 |
|
|
|
8,547 |
|
|
|
27,942 |
|
|
|
30,456 |
|
Other residential operating expenses |
|
|
5,804 |
|
|
|
7,184 |
|
|
|
18,126 |
|
|
|
22,418 |
|
Community-level costs incurred on behalf of managed communities |
|
|
137,768 |
|
|
|
177,231 |
|
|
|
396,352 |
|
|
|
585,662 |
|
General and administrative |
|
|
17,015 |
|
|
|
21,817 |
|
|
|
53,205 |
|
|
|
66,956 |
|
Restructuring expenses |
|
|
1,570 |
|
|
|
1,220 |
|
|
|
1,944 |
|
|
|
16,859 |
|
Depreciation and amortization |
|
|
3,088 |
|
|
|
2,983 |
|
|
|
9,535 |
|
|
|
8,912 |
|
Total operating expenses |
|
|
189,963 |
|
|
|
232,518 |
|
|
|
549,216 |
|
|
|
776,677 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating loss |
|
|
(7,302 |
) |
|
|
(6,687 |
) |
|
|
(22,247 |
) |
|
|
(15,330 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Interest, dividend and other income |
|
|
225 |
|
|
|
84 |
|
|
|
434 |
|
|
|
244 |
|
Interest and other expense |
|
|
(1,474 |
) |
|
|
(507 |
) |
|
|
(3,757 |
) |
|
|
(1,379 |
) |
Unrealized (loss) gain on equity investments |
|
|
(1,997 |
) |
|
|
22 |
|
|
|
(3,679 |
) |
|
|
555 |
|
Realized gain on sale of debt and equity investments |
|
|
1,573 |
|
|
|
— |
|
|
|
1,528 |
|
|
|
193 |
|
Gain (loss) on termination of lease |
|
|
498 |
|
|
|
(3,277 |
) |
|
|
777 |
|
|
|
(3,277 |
) |
Loss before income taxes |
|
|
(8,477 |
) |
|
|
(10,365 |
) |
|
|
(26,944 |
) |
|
|
(18,994 |
) |
(Provision) benefit for income taxes |
|
|
(31 |
) |
|
|
164 |
|
|
|
(99 |
) |
|
|
(194 |
) |
Net loss |
|
$ |
(8,508 |
) |
|
$ |
(10,201 |
) |
|
$ |
(27,043 |
) |
|
$ |
(19,188 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding—basic and diluted |
|
|
31,875 |
|
|
|
31,618 |
|
|
|
31,825 |
|
|
|
31,567 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share—basic and diluted |
|
$ |
(0.27 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.85 |
) |
|
$ |
(0.61 |
) |
Reconciliation of Non-GAAP Financial Measures
(dollars in thousands)
(unaudited)
Non-GAAP financial measures are financial measures that are not determined in accordance with GAAP. ALR believes the non-GAAP financial measures presented in the tables below are meaningful supplemental disclosures because they may help investors better understand changes in ALR’s operating results and its ability to meet financial obligations or service debt, make capital expenditures and expand its business. ALR believes that EBITDA, Adjusted EBITDA, EBITDA Margin and Net Income (Loss) Margin also may help investors better understand its financial performance, including by allowing investors to compare ALR's performance between periods and against the performance of other companies on both a GAAP and non-GAAP basis. ALR management uses EBITDA, Adjusted EBITDA, EBITDA Margin and Net Income (Loss) Margin to evaluate ALR’s financial performance and compare ALR’s performance over time and to the performance of other companies. ALR calculates EBITDA, Adjusted EBITDA, EBITDA Margin and Net Income (Loss) Margin as shown below or later in this press release. These measures should not be considered as alternatives to net income (loss) or operating income (loss), as indicators of ALR’s operating performance or as measures of ALR’s liquidity. Also, EBITDA, Adjusted EBITDA, EBITDA Margin and Net Income (Loss) Margin as presented may not be comparable to similarly titled amounts calculated by other companies.
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 and nine months ended
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net loss |
|
$ |
(8,508 |
) |
|
$ |
(10,201 |
) |
|
$ |
(27,043 |
) |
|
$ |
(19,188 |
) |
Add (less): |
|
|
|
|
|
|
|
|
||||||||
Interest and other expense |
|
|
1,474 |
|
|
|
507 |
|
|
|
3,757 |
|
|
|
1,379 |
|
Interest, dividend and other income |
|
|
(225 |
) |
|
|
(84 |
) |
|
|
(434 |
) |
|
|
(244 |
) |
Provision (benefit) for income taxes |
|
|
31 |
|
|
|
(164 |
) |
|
|
99 |
|
|
|
194 |
|
Depreciation and amortization |
|
|
3,088 |
|
|
|
2,983 |
|
|
|
9,535 |
|
|
|
8,912 |
|
EBITDA |
|
|
(4,140 |
) |
|
|
(6,959 |
) |
|
|
(14,086 |
) |
|
|
(8,947 |
) |
Add (less): |
|
|
|
|
|
|
|
|
||||||||
Separation costs (1) |
|
|
— |
|
|
|
— |
|
|
|
1,319 |
|
|
|
— |
|
Unrealized loss (gain) on equity investments |
|
|
1,997 |
|
|
|
(22 |
) |
|
|
3,679 |
|
|
|
(555 |
) |
(Gain) loss on termination of leases |
|
|
(498 |
) |
|
|
3,277 |
|
|
|
(777 |
) |
|
|
3,277 |
|
Transaction costs (2) |
|
|
574 |
|
|
|
— |
|
|
|
1,278 |
|
|
|
— |
|
Net restructuring expenses (3) |
|
|
1,568 |
|
|
|
407 |
|
|
|
1,468 |
|
|
|
4,515 |
|
Long-lived asset impairment (4) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
890 |
|
Adjusted EBITDA |
|
$ |
(499 |
) |
|
$ |
(3,297 |
) |
|
$ |
(7,119 |
) |
|
$ |
(820 |
) |
___________________________ |
||
(1) |
|
Costs incurred for the nine months ended |
(2) |
|
The three and nine months ended |
(3) |
|
The three and nine months ended |
(4) |
|
The nine months ended |
Reconciliation of Non-GAAP Financial Measures
(dollars in thousands)
(unaudited)
ALR believes that net income (loss) is the most directly comparable financial measure, determined according to GAAP, to ALR’s presentation of EBITDA, Net Income (Loss) Margin and EBITDA Margin. The following table presents the reconciliation of these non-GAAP financial measures to net income (loss) for the three months ended
|
|
Three Months Ended
|
||
Lifestyle services: |
|
|
||
Revenue |
|
$ |
14,546 |
|
Less: Home health services |
|
|
175 |
|
Less: Inpatient rehabilitation clinics (1) |
|
|
1,590 |
|
Total Ageility revenue (2) |
|
$ |
12,781 |
|
|
|
|
||
Ageility: |
|
|
||
Net loss |
|
$ |
(413 |
) |
Add: Depreciation |
|
|
98 |
|
EBITDA |
|
$ |
(315 |
) |
|
|
|
||
Net Loss Margin (3) |
|
|
(3.2 |
)% |
EBITDA Margin (4) |
|
|
(2.5 |
)% |
___________________________ |
||
(1) |
|
Revenue for ten Ageility inpatient rehabilitation clinics that were operated by Ageility during the three months ended |
(2) |
|
Total Ageility revenue includes revenue from outpatient rehabilitation locations and fitness. |
(3) |
|
Net Loss Margin is defined by ALR as net loss for the period divided by total revenue for the period. |
(4) |
|
EBITDA Margin is defined by ALR as EBITDA for the period divided by total revenue for the period. |
Condensed Consolidated Balance Sheets (dollars in thousands, except per share amounts) (unaudited) |
||||||||
|
|
|
|
|
||||
|
|
|
2022 |
|
|
|
2021 |
|
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
79,126 |
|
|
$ |
66,987 |
|
Restricted cash and cash equivalents |
|
|
21,317 |
|
|
|
24,970 |
|
Accounts receivable, net |
|
|
9,676 |
|
|
|
9,244 |
|
Due from related person |
|
|
56,497 |
|
|
|
41,664 |
|
Debt and equity investments, of which |
|
|
10,890 |
|
|
|
19,535 |
|
Prepaid expenses and other current assets |
|
|
21,817 |
|
|
|
24,433 |
|
Total current assets |
|
|
199,323 |
|
|
|
186,833 |
|
|
|
|
|
|
||||
Property and equipment, net |
|
|
162,785 |
|
|
|
159,843 |
|
Operating lease right-of-use assets |
|
|
5,796 |
|
|
|
9,197 |
|
Finance lease right-of-use assets |
|
|
2,773 |
|
|
|
3,467 |
|
Restricted cash and cash equivalents |
|
|
991 |
|
|
|
982 |
|
Restricted debt and equity investments |
|
|
2,715 |
|
|
|
3,873 |
|
Other long-term assets |
|
|
8,155 |
|
|
|
12,082 |
|
Total assets |
|
$ |
382,538 |
|
|
$ |
376,277 |
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
16,367 |
|
|
$ |
37,516 |
|
Accrued expenses and other current liabilities |
|
|
44,861 |
|
|
|
31,488 |
|
Accrued compensation and benefits |
|
|
33,413 |
|
|
|
34,295 |
|
Accrued self-insurance obligations |
|
|
26,701 |
|
|
|
31,739 |
|
Operating lease liabilities |
|
|
501 |
|
|
|
699 |
|
Finance lease liabilities |
|
|
1,351 |
|
|
|
872 |
|
Due to related persons |
|
|
2,500 |
|
|
|
3,879 |
|
Current portion of debt |
|
|
437 |
|
|
|
419 |
|
Total current liabilities |
|
|
126,131 |
|
|
|
140,907 |
|
|
|
|
|
|
||||
Long-term liabilities: |
|
|
|
|
||||
Accrued self-insurance obligations |
|
|
27,007 |
|
|
|
34,744 |
|
Operating lease liabilities |
|
|
5,331 |
|
|
|
9,366 |
|
Finance lease liabilities |
|
|
2,351 |
|
|
|
3,050 |
|
Long-term debt |
|
|
67,161 |
|
|
|
6,364 |
|
Other long-term liabilities |
|
|
227 |
|
|
|
256 |
|
Total long-term liabilities |
|
|
102,077 |
|
|
|
53,780 |
|
|
|
|
|
|
||||
Commitments and contingencies |
|
|
|
|
||||
|
|
|
|
|
||||
Shareholders’ equity: |
|
|
|
|
||||
Common stock, par value |
|
|
326 |
|
|
|
327 |
|
Additional paid-in-capital |
|
|
462,144 |
|
|
|
461,298 |
|
Accumulated deficit |
|
|
(308,107 |
) |
|
|
(281,064 |
) |
Accumulated other comprehensive (loss) income |
|
|
(33 |
) |
|
|
1,029 |
|
Total shareholders’ equity |
|
|
154,330 |
|
|
|
181,590 |
|
Total liabilities and shareholders' equity |
|
$ |
382,538 |
|
|
$ |
376,277 |
|
Residential Segment Data (dollars in thousands, except per unit amounts) (unaudited) |
||||||||||||||||||||
|
|
Three Months Ended |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Owned and Leased Senior Living Communities |
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues |
|
$ |
17,514 |
|
|
$ |
16,094 |
|
|
$ |
15,386 |
|
|
$ |
14,883 |
|
|
$ |
16,320 |
|
Other operating income (1) |
|
|
2 |
|
|
|
— |
|
|
|
42 |
|
|
|
— |
|
|
|
— |
|
Operating expenses |
|
|
20,182 |
|
|
|
18,861 |
|
|
|
19,371 |
|
|
|
18,574 |
|
|
|
17,895 |
|
Operating loss |
|
|
(2,666 |
) |
|
|
(2,767 |
) |
|
|
(3,943 |
) |
|
|
(3,691 |
) |
|
|
(1,575 |
) |
Operating margin |
|
|
(15.2 |
)% |
|
|
(17.2 |
)% |
|
|
(25.6 |
)% |
|
|
(24.8 |
)% |
|
|
(9.7 |
)% |
Number of communities (end of period) |
|
|
20 |
|
|
|
20 |
|
|
|
20 |
|
|
|
20 |
|
|
|
20 |
|
Number of living units (end of period) (2) |
|
|
2,084 |
|
|
|
2,087 |
|
|
|
2,100 |
|
|
|
2,100 |
|
|
|
2,099 |
|
Average occupancy |
|
|
76.0 |
% |
|
|
72.5 |
% |
|
|
71.0 |
% |
|
|
72.0 |
% |
|
|
69.9 |
% |
Quarter end occupancy |
|
|
78.4 |
% |
|
|
75.5 |
% |
|
|
72.1 |
% |
|
|
72.7 |
% |
|
|
72.9 |
% |
RevPAR (3) |
|
$ |
2,801 |
|
|
$ |
2,560 |
|
|
$ |
2,443 |
|
|
$ |
2,349 |
|
|
$ |
2,411 |
|
RevPOR (4) |
|
$ |
3,604 |
|
|
$ |
3,492 |
|
|
$ |
3,444 |
|
|
$ |
3,192 |
|
|
$ |
3,375 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Managed Senior Living Communities (5): |
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential management fees |
|
$ |
9,477 |
|
|
$ |
8,971 |
|
|
$ |
8,932 |
|
|
$ |
9,482 |
|
|
$ |
11,220 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Community-level revenues |
|
|
171,684 |
|
|
|
165,179 |
|
|
|
162,552 |
|
|
|
161,907 |
|
|
|
210,160 |
|
Other operating income (1) |
|
|
125 |
|
|
|
75 |
|
|
|
199 |
|
|
|
602 |
|
|
|
786 |
|
Community-level expenses (6) |
|
|
164,044 |
|
|
|
151,906 |
|
|
|
152,892 |
|
|
|
159,329 |
|
|
|
203,756 |
|
Community operating income |
|
|
7,765 |
|
|
|
13,348 |
|
|
|
9,859 |
|
|
|
3,180 |
|
|
|
7,190 |
|
Community operating margin |
|
|
4.5 |
% |
|
|
8.1 |
% |
|
|
6.1 |
% |
|
|
2.0 |
% |
|
|
3.4 |
% |
Number of communities (end of period) |
|
|
120 |
|
|
|
120 |
|
|
|
120 |
|
|
|
121 |
|
|
|
159 |
|
Number of living units (end of period) (2) |
|
|
17,889 |
|
|
|
17,886 |
|
|
|
17,899 |
|
|
|
18,005 |
|
|
|
20,669 |
|
Average occupancy |
|
|
75.3 |
% |
|
|
74.1 |
% |
|
|
74.1 |
% |
|
|
73.7 |
% |
|
|
72.2 |
% |
Quarter end occupancy |
|
|
77.0 |
% |
|
|
75.4 |
% |
|
|
74.6 |
% |
|
|
74.8 |
% |
|
|
73.8 |
% |
RevPAR (3) |
|
$ |
3,200 |
|
|
$ |
3,077 |
|
|
$ |
3,027 |
|
|
$ |
2,919 |
|
|
$ |
3,046 |
|
RevPOR (4) |
|
$ |
4,158 |
|
|
$ |
4,109 |
|
|
$ |
4,084 |
|
|
$ |
3,875 |
|
|
$ |
4,129 |
|
___________________________ |
||
(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 corresponding portfolio 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 corresponding portfolio 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 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
Owned Senior Living Communities (1): |
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of communities (end of period) |
|
|
20 |
|
|
|
20 |
|
|
|
20 |
|
|
|
20 |
|
|
|
20 |
|
Number of living units (end of period) (2) |
|
|
2,084 |
|
|
|
2,087 |
|
|
|
2,100 |
|
|
|
2,100 |
|
|
|
2,099 |
|
Average occupancy |
|
|
76.0 |
% |
|
|
72.5 |
% |
|
|
71.0 |
% |
|
|
72.0 |
% |
|
|
70.4 |
% |
Quarter end occupancy |
|
|
78.4 |
% |
|
|
75.5 |
% |
|
|
72.1 |
% |
|
|
72.7 |
% |
|
|
72.9 |
% |
RevPAR (3) |
|
$ |
2,801 |
|
|
$ |
2,560 |
|
|
$ |
2,443 |
|
|
$ |
2,349 |
|
|
$ |
2,354 |
|
RevPOR (4) |
|
$ |
3,604 |
|
|
$ |
3,492 |
|
|
$ |
3,444 |
|
|
$ |
3,192 |
|
|
$ |
3,270 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
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) |
|
|
17,889 |
|
|
|
17,886 |
|
|
|
17,899 |
|
|
|
17,899 |
|
|
|
17,899 |
|
Average occupancy |
|
|
75.3 |
% |
|
|
74.1 |
% |
|
|
74.1 |
% |
|
|
74.1 |
% |
|
|
73.4 |
% |
Quarter end occupancy |
|
|
77.0 |
% |
|
|
75.4 |
% |
|
|
74.6 |
% |
|
|
75.2 |
% |
|
|
74.6 |
% |
RevPAR (3) |
|
$ |
3,200 |
|
|
$ |
3,077 |
|
|
$ |
3,027 |
|
|
$ |
2,900 |
|
|
$ |
2,941 |
|
RevPOR (4) |
|
$ |
4,158 |
|
|
$ |
4,109 |
|
|
$ |
4,084 |
|
|
$ |
3,831 |
|
|
$ |
3,922 |
|
___________________________ |
||
(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 corresponding portfolio 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 corresponding portfolio 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 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
Lifestyle Services (1): |
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues |
|
$ |
14,546 |
|
|
$ |
14,645 |
|
|
$ |
14,139 |
|
|
$ |
15,626 |
|
|
$ |
15,382 |
|
Outpatient |
|
|
11,837 |
|
|
|
11,753 |
|
|
|
11,165 |
|
|
|
12,848 |
|
|
|
12,747 |
|
Fitness |
|
|
944 |
|
|
|
941 |
|
|
|
881 |
|
|
|
890 |
|
|
|
853 |
|
Other |
|
|
1,765 |
|
|
|
1,951 |
|
|
|
2,093 |
|
|
|
1,888 |
|
|
|
1,782 |
|
Operating expenses (2) |
|
|
14,672 |
|
|
|
14,438 |
|
|
|
13,334 |
|
|
|
14,045 |
|
|
|
13,348 |
|
Operating (loss) income |
|
|
(126 |
) |
|
|
207 |
|
|
|
805 |
|
|
|
1,581 |
|
|
|
2,034 |
|
Operating margin (3) |
|
|
(0.9 |
)% |
|
|
1.4 |
% |
|
|
5.7 |
% |
|
|
10.1 |
% |
|
|
13.2 |
% |
Number of inpatient clinics (end of period) |
|
|
8 |
|
|
|
10 |
|
|
|
10 |
|
|
|
10 |
|
|
|
10 |
|
Number of outpatient locations (end of period) |
|
|
203 |
|
|
|
202 |
|
|
|
201 |
|
|
|
205 |
|
|
|
223 |
|
Number of fitness locations (end of period) |
|
|
67 |
|
|
|
76 |
|
|
|
73 |
|
|
|
60 |
|
|
|
61 |
|
___________________________ |
||
(1) |
|
Includes Ageility rehabilitation locations and fitness operations as well as home healthcare operations. |
(2) |
|
The three months ended |
(3) |
|
Operating margin is defined as operating revenue less operating expenses divided by operating revenue in each period. |
Comparable Lifestyle Services Segment Data (dollars in thousands) (unaudited) |
||||||||||||||||||||
|
|
Three Months Ended |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
Lifestyle Services (1)(2): |
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues |
|
$ |
12,183 |
|
|
$ |
12,057 |
|
|
$ |
11,533 |
|
|
$ |
12,892 |
|
|
$ |
12,823 |
|
Outpatient |
|
|
11,091 |
|
|
|
10,944 |
|
|
|
10,520 |
|
|
|
11,825 |
|
|
|
11,754 |
|
Fitness |
|
|
917 |
|
|
|
898 |
|
|
|
835 |
|
|
|
832 |
|
|
|
795 |
|
Other |
|
|
175 |
|
|
|
215 |
|
|
|
178 |
|
|
|
235 |
|
|
|
274 |
|
Operating expenses |
|
|
12,291 |
|
|
|
12,095 |
|
|
|
11,251 |
|
|
|
11,621 |
|
|
|
11,563 |
|
Operating (loss) income |
|
|
(108 |
) |
|
|
(38 |
) |
|
|
282 |
|
|
|
1,271 |
|
|
|
1,260 |
|
Operating margin (3) |
|
|
(0.9 |
)% |
|
|
(0.3 |
)% |
|
|
2.4 |
% |
|
|
9.9 |
% |
|
|
9.8 |
% |
Number of outpatient locations (end of period) |
|
|
185 |
|
|
|
185 |
|
|
|
185 |
|
|
|
185 |
|
|
|
185 |
|
Number of fitness locations (end of period) |
|
|
62 |
|
|
|
73 |
|
|
|
73 |
|
|
|
51 |
|
|
|
57 |
|
___________________________ |
||
(1) |
|
Includes Ageility outpatient rehabilitation locations and fitness operations as well as home healthcare operations that ALR has continuously operated since |
(2) |
|
Excludes eight Ageility inpatient rehabilitation clinics. |
(3) |
|
Operating margin is defined as operating revenue less operating expenses divided by operating revenue in each period. |
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 Revenues (4) |
|
Gross Carrying Value |
|
Net Carrying Value |
|
Date Acquired |
|
Most Recent Renovation |
|||
1 |
|
Morningside of |
|
|
|
AL |
|
49 |
|
$ |
414 |
|
$ |
7,805 |
|
$ |
4,232 |
|
|
|
2021 |
2 |
|
Morningside of |
|
|
|
AL |
|
42 |
|
|
415 |
|
|
2,339 |
|
|
1,119 |
|
|
|
1997 |
3 |
|
The Palms of |
|
|
|
IL |
|
218 |
|
|
1,965 |
|
|
7,452 |
|
|
3,912 |
|
|
|
1988 |
4 |
|
Five Star Residences of |
|
|
|
AL |
|
121 |
|
|
859 |
|
|
12,052 |
|
|
7,235 |
|
|
|
2006 |
5 |
|
Five Star Residences of |
|
|
|
AL |
|
154 |
|
|
1,000 |
|
|
9,355 |
|
|
5,726 |
|
|
|
1998 |
6 |
|
Five Star Residences of |
|
|
|
AL |
|
88 |
|
|
400 |
|
|
15,259 |
|
|
9,780 |
|
|
|
1999 |
7 |
|
Five Star Residences of |
|
|
|
AL |
|
109 |
|
|
665 |
|
|
12,406 |
|
|
7,961 |
|
|
|
2000 |
8 |
|
Five Star Residences of |
|
|
|
AL |
|
151 |
|
|
1,232 |
|
|
14,005 |
|
|
8,588 |
|
|
|
2005 |
9 |
|
The Villa at Riverwood (2) |
|
|
|
IL |
|
112 |
|
|
754 |
|
|
5,056 |
|
|
3,231 |
|
|
|
1986 |
10 |
|
Voorhees Senior Living (2) |
|
|
|
AL |
|
91 |
|
|
909 |
|
|
20,591 |
|
|
13,883 |
|
|
|
1999 |
11 |
|
Washington Township Senior Living |
|
|
|
AL |
|
93 |
|
|
994 |
|
|
26,586 |
|
|
17,178 |
|
|
|
1998 |
12 |
|
Carriage House Senior Living (2) |
|
|
|
AL |
|
98 |
|
|
1,075 |
|
|
10,065 |
|
|
5,319 |
|
|
|
1997 |
13 |
|
|
|
|
|
AL |
|
111 |
|
|
875 |
|
|
16,328 |
|
|
10,457 |
|
|
|
1998 |
14 |
|
Fox Hollow Senior Living (2) |
|
|
|
AL |
|
74 |
|
|
1,253 |
|
|
26,639 |
|
|
17,816 |
|
|
|
1999 |
15 |
|
|
|
|
|
AL |
|
116 |
|
|
895 |
|
|
7,845 |
|
|
3,641 |
|
|
|
1997 |
16 |
|
Morningside at |
|
|
|
AL |
|
91 |
|
|
869 |
|
|
3,848 |
|
|
1,565 |
|
|
|
1997 |
17 |
|
The Devon Senior Living |
|
|
|
AL |
|
84 |
|
|
566 |
|
|
33,437 |
|
|
14,686 |
|
|
|
1985 |
18 |
|
The Legacy of |
|
|
|
IL |
|
101 |
|
|
662 |
|
|
11,840 |
|
|
6,994 |
|
|
|
2003 |
19 |
|
Morningside of |
|
|
|
AL |
|
54 |
|
|
565 |
|
|
19,114 |
|
|
11,633 |
|
|
|
1984 |
20 |
|
|
|
|
|
AL |
|
127 |
|
|
1,152 |
|
|
2,499 |
|
|
1,502 |
|
|
|
1999 |
|
|
Total |
|
|
|
|
|
2,084 |
|
$ |
17,519 |
|
$ |
264,521 |
|
$ |
156,458 |
|
|
|
|
___________________________ |
||
(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 mortgage note having an aggregate principal amount outstanding of |
(4) |
|
Excludes funds received under the CARES Act recognized as other operating income. |
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 ALR uses words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, "will", “may” and negatives or derivatives of these or similar expressions, ALR is making forward-looking statements. These forward-looking statements are based upon ALR’s present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Actual results may differ materially from those contained in or implied by ALR’s forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond ALR's control. For example:
-
This press release includes statements regarding the comprehensive operational review performed by A&M and the restructuring plan ALR has implemented as a result and has begun to execute. In addition,
Mr. Leer notes the recent additions of ALR's Chief Financial Officer and Chief Operating Officer. ALR may not be able to successfully execute the restructuring plan on the timing it expects or at all, the costs to implement the restructuring plan may be more than it expects and it may not realize the benefits it anticipates from the restructuring plan. -
Mr. Leer refers to the steady progress ALR has made in implementing its plan to improve its operating results and drive efficiencies in its organization throughout the third quarter of 2022, noting improvements in occupancy in both ALR's owned and managed senior living communities. However, this progress may not continue and its operating results may not improve and occupancy could decline as a result of current economic conditions, including inflation, high interest rates, geopolitical risks and possible economic recession. -
Mr. Leer states that ALR ended the quarter with sufficient liquidity to execute on the restructuring plan and that it has no debt maturities until 2025. However, the costs to implement the restructuring plan may be more than it anticipates, it may not generate sufficient cash flow from its operations, and its current liquidity may prove to be insufficient.
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/20221102005873/en/
(617) 796-8245
Source:
FAQ
What were AlerisLife's Q3 2022 financial results?
How much did AlerisLife invest in capital improvements in Q3 2022?
What is AlerisLife's current liquidity status?
How did occupancy change for AlerisLife in Q3 2022?
When will AlerisLife's restructuring plan be completed?
