Five Star Senior Living Inc. Announces First Quarter 2018 Results
May. 15, 2018
NEWTON, Mass.--(BUSINESS WIRE)--May 15, 2018--Five Star Senior Living Inc. (Nasdaq: FVE) today announced its financial results for the quarter ended March 31, 2018.
Financial Results for the quarter ended March 31, 2018:Senior living revenue for the first quarter of 2018 decreased 2.8% to $274.5 million from $282.4 million for the same period in 2017, primarily due to the sale of two senior living communities during the fourth quarter of 2017 and two communities during the first quarter of 2018 pursuant to a transaction agreement Five Star entered with Senior Housing Properties Trust (Nasdaq: SNH), or the 2017 Transaction Agreement, and a decrease in occupancy, partially offset by an increase in average monthly rates to residents who pay privately for services. Management fee revenue for the first quarter of 2018 increased 1.7% to $3.6 million, primarily due to an increase in the number of managed communities compared to the same period in 2017. Net loss for the first quarter of 2018 was $7.9 million, or $0.16 per diluted share, compared to net loss of $6.8 million, or $0.14 per diluted share, for the same period in 2017. Net loss for the first quarter of 2018 included a gain on sale of senior living communities of $5.7 million, or $0.11 per diluted share, in connection with the sale of two senior living communities in January and February 2018 pursuant to the 2017 Transaction Agreement. Earnings before interest, taxes, depreciation and amortization, or EBITDA, for the first quarter of 2018 was $1.7 million compared to $3.6 million for the same period in 2017. EBITDA excluding certain items noted in the supplemental information provided below, or Adjusted EBITDA, was $(3.7) million and $3.8 million for the first quarters of 2018 and 2017, respectively. A reconciliation of net loss determined in accordance with U.S. generally accepted accounting principles, or GAAP, to EBITDA and Adjusted EBITDA for the quarters ended March 31, 2018 and 2017 appears later in this press release.
Operating Results for the quarter ended March 31, 2018:Occupancy at owned and leased senior living communities for the first quarter of 2018 was 81.7% compared to 83.6% for the same period in 2017. The average monthly rate at owned and leased senior living communities for the first quarter of 2018 increased 0.8% to $4,796 from $4,756 for the same period in 2017. The percentage of revenue derived from residents’ private resources at owned and leased senior living communities for the first quarter of 2018 was 77.3% compared to 77.6% for the same period in 2017.
As previously disclosed, in November 2017, Five Star agreed to sell six senior living communities to SNH pursuant to the 2017 Transaction Agreement for an aggregate sales price of $104.4 million, including $2.4 million of mortgage debt principal that Five Star prepaid in December 2017 in connection with the sale of one of these communities, SNH's assumption of approximately $33.5 million of mortgage debt principal secured by certain of these senior living communities and excluding closing costs. In December 2017, Five Star sold two of these communities for an aggregate sales price of approximately $39.2 million, excluding closing costs. In January 2018, Five Star sold one of these communities for approximately $19.7 million, excluding closing costs. In February 2018, Five Star sold one of these communities for approximately $22.2 million, including SNH’s assumption of approximately $16.8 million of mortgage debt principal and excluding closing costs. In connection with these sales, Five Star entered management and pooling agreements with SNH to manage these senior living communities, and Five Star expects to enter additional management and pooling arrangements with SNH concurrent with the sales of the remaining two communities. The closings of the sales of the remaining two communities for an aggregate sales price of approximately $23.3 million, including SNH’s assumption of approximately $16.7 million of mortgage debt principal, are expected to occur by the end of the second quarter of 2018 as third party approvals are received.
In March 2018, Five Star and SNH agreed to sell one skilled nursing facility owned by SNH for a sales price of approximately $6.5 million, excluding closing costs. Five Star expects the closing of the sale of this skilled nursing facility to occur by the end of the second quarter of 2018.
At 10:00 a.m. Eastern Time this morning, President and Chief Executive Officer, Bruce Mackey, Chief Financial Officer and Treasurer, Richard Doyle, and Senior Vice President and Chief Operating Officer, Scott Herzig will host a conference call to discuss its first quarter 2018 results.
The conference call telephone number is (877) 329-4332. Participants calling from outside the United States and Canada should dial (412) 317-5436. No pass code is necessary to access the call from either number. Participants should dial in about 15 minutes prior to the scheduled start of the call. A replay of the conference call will be available through 11:59 p.m. on Tuesday, May 22, 2018. To access the replay, dial (412) 317-0088. The replay pass code is 10118605.
A live audio webcast of the conference call will also be available in a listen-only mode on Five Star’s website, which is located at www.fivestarseniorliving.com. Participants wanting to access the webcast should visit Five Star’s website about five minutes before the call. The archived webcast will be available for replay on Five Star’s website for about one week after the call. The transcription, recording and retransmission in any way ofFive Star’sfirst quarter2018conference callarestrictly prohibited without the prior written consent ofFive Star. Five Star’s website is not incorporated as part of this press release.
About Five Star Senior Living Inc.:
Five Star Senior Living Inc. is a senior living and healthcare services company. As of March 31, 2018, Five Star operated 283 senior living communities with 31,787 living units located in 32 states, including 211 communities (22,529 living units) that it owned or leased and 72 communities (9,258 living units) that it managed. These communities include independent living, assisted living, continuing care retirement communities and skilled nursing communities. Five Star is headquartered in Newton, Massachusetts.
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