Capital Senior Living Corporation (the “Company”) (NYSE: CSU), one
of the nation’s largest operators of senior housing communities,
announced today operating and financial results for the first
quarter ended March 31, 2020.
Recent Highlights
- Operating expenses decreased $3.3 million in the first quarter
of 2020 as compared to the fourth quarter of 2019, resulting in
sequential improvements in several of the Company’s key financial
metrics.
- Rent payments on 31 underperforming leased communities were
reduced by 25% effective February 1, and six underperforming leased
communities were converted to management agreements effective March
1, as a result of agreements reached with the Company’s landlords
in the first quarter of 2020 for early termination of its Master
Leases.
- The Company sold an underperforming non-core community on March
31, 2020, generating $6.9 million in net cash proceeds.
- Short-term forbearance agreements were reached with certain
lenders resulting in lower debt payments beginning in April
2020.
“The sequential improvement in key financial metrics in the
first quarter, along with lower lease and debt payments, has
enabled us to focus our efforts on meeting the incremental
challenges posed by the COVID-19 pandemic,” said Kimberly S. Lody,
President and Chief Executive Officer. “During these last eight
weeks, our community-level and central support teams have
steadfastly cared for our residents’ physical, cognitive, and
emotional well-being, and I am so proud of their dedication and
heroism during this unprecedented time. While our financial
results will be impacted by the pandemic for the next several
months, we look forward to continuing our operational turnaround as
market conditions stabilize.”
Financial Results - First
Quarter
For the first quarter of 2020, the Company reported revenue of
$106.1 million, compared with revenue of $114.2 million in the
first quarter of 2019. The disposition of four communities
since the first quarter of 2019 accounted for $3.5 million of the
decrease, and the conversion of six formerly leased communities to
management agreements effective March 1, 2020, accounted for $1.1
million of the decrease. Total occupancy in the first quarter
of 2020 was 80.0%, a decrease of 310 basis points as compared to
the first quarter of 2019, and monthly average rent was $3,674, an
increase of 1.6% as compared to the first quarter of
2019.
Operating expenses for the first quarter of 2020 were $75.4
million, the same as in the first quarter of 2019. The first
quarter of 2019 included $1.9 million of operating expenses related
to four communities disposed of since the first quarter of 2019 and
$0.7 million for the six formerly leased communities that were
converted to management agreements effective March 1, 2020.
Also, the Company had $1.2 million in business interruption credits
related to the Company’s two communities previously impacted by
Hurricane Harvey in the first quarter of 2019 but did not have any
such credits in the first quarter of 2020.
General and administrative expenses for the first quarter of
2020 were $6.7 million versus $7.6 million in the first quarter of
2019. Excluding transaction and conversion costs in both
periods, general and administrative expenses decreased $0.6 million
in the first quarter of 2020 versus the first quarter of 2019 due
to lower healthcare claims under the Company’s self-insured
healthcare plan. As a percentage of revenues under
management, general and administrative expenses, excluding
transaction and conversion costs, were 4.9% in the first quarter of
2020.
The first quarter of 2020 includes an $11.0 million non-cash
gain and a $36.5 million non-cash long-lived asset impairment
charge, both of which are related to the leased communities and the
associated agreements executed with Healthpeak, Ventas and
Welltower. The Company also recorded a $7.4 million non-cash
loss on the sale of a non-core community in the first quarter of
2020.
Loss from operations for the first quarter of 2020 was $3.7
million. Net loss was $48.4 million for the first quarter of
2020.
Adjusted EBITDAR for the first quarter of 2020 was $26.3
million. The Company incurred approximately $0.3 million of
COVID-19 expenses in March 2020. Adjusted EBITDAR excluding
COVID-19 expenses was $26.6 million, a sequential increase of $0.9
million from Adjusted EBITDAR in the fourth quarter of 2019.
Adjusted CFFO was $0.2 million. Adjusted CFFO excluding COVID-19
expenses was $0.5 million, a sequential increase of $1.9 million
from Adjusted CFFO in the fourth quarter of 2019. (See
“Non-GAAP Financial Measures” below).
Same Community Results
Same community results exclude the four non-core communities the
Company has disposed of since the first quarter of 2019 and the six
Healthpeak communities converted to management agreements effective
March 1, 2020. Same-community results also exclude
approximately $0.3 million of expenses incurred in March 2020
related to COVID-19 preparedness.
Same-community revenue in the first quarter of 2020 decreased
2.6% versus the first quarter of 2019. Same-community
occupancy in the first quarter was 79.9%, a decrease of 280 basis
points as compared to the first quarter of 2019 and average monthly
rent was $3,772, an increase of 0.9% as compared to the first
quarter of 2019.
Same-community operating expenses increased 2.4% in the first
quarter of 2020 versus the first quarter of 2019. Same store
labor costs, including benefits, increased 5.9%, food costs
decreased 1.0%, and utilities decreased 5.5%. Including contract
labor, which decreased $0.3 million in the first quarter of 2020,
same store total labor costs increased 5.0% when compared with the
first quarter of 2019. Same-community net operating income
decreased 12.3% in the first quarter of 2020 when compared with the
first quarter of 2019. Same-community net operating income
increased $2.7 million, or 9.4%, in the first quarter of 2020 as
compared to the fourth quarter of 2019.
Sale of Senior Living Community
As previously announced, the Company closed on the sale of a
non-core community in Merrillville, Indiana, on March 31, 2020, at
a purchase price of $7.0 million. The transaction resulted in
approximately $6.9 million in net cash proceeds. The
community consisted of 213 assisted living and memory care units,
and had CFFO contribution of approximately $0.2 million in
2019.
COVID-19 Update
The safety and wellbeing of the Company’s residents, employees
and caregivers is and has been the Company's highest
priority. At the onset of the COVID-19 pandemic, the
Company’s operations team swiftly implemented comprehensive
protocols and best practices across the portfolio based on guidance
from the Centers for Disease Control as well as federal, state and
local authorities. All communities have executed
risk-mitigation actions, such as restricting access and assessing
the health status of every person entering the communities,
including the Company’s employees, all visitors, and all outside
service providers. Tours are limited to only the prospect and one
family member in most communities, with certain communities only
providing virtual tours. New residents and residents
returning from a hospital stay are required to isolate in their
apartment for fourteen days. All employees are required to
adhere to personal protection protocols, including wearing masks at
all times. The Company’s communities are cleaned and disinfected at
least twice daily. Certain communities with COVID-positive
residents have received a specialized disinfecting and
decontamination treatment. In most cases, the Company has
implemented in-room only dining and activities programming.
Due to the vulnerable nature of the Company’s residents, many of
these restrictions may continue at its communities even when
federal, state, and local stay-at-home and social distancing orders
and recommendations are relaxed.
The Company delivered results in line with its expectations in
March 2020. New resident leads, visits, and move-in activity
declined significantly in April compared to typical levels,
adversely impacting occupancy. Consolidated occupancy,
excluding the non-core community sold in the first quarter,
decreased from 79.8% for the month of March to 78.7% for the month
of April. Revenue on the same basis decreased approximately $0.5
million from March to April. We expect further deterioration
of occupancy and revenue resulting from fewer move-ins due to the
impacts of COVID-19. Lower than normal controllable move-out
activity during the COVID-19 pandemic may partially offset future
adverse revenue impacts.
The Company has recognized and continues to recognize increases
in supplies costs related primarily to personal protection
equipment and paper goods required for in-room dining, labor,
specialized cleaning and disinfecting costs, and testing of
residents and employees. To mitigate the impact of the
COVID-related expenditures, the Company has reduced spending on
non-essential supplies, travel costs and certain other
discretionary items, and has ceased all non-critical capital
expenditure projects.
The Company is utilizing the payroll tax deferral program under
the Coronavirus Aid, Relief, and Economic Security Act of 2020
(CARES Act) to defer the employer portion of payroll taxes from
April 2020 through December 2020, which it estimates will
accumulate to approximately $7.0 million. One-half of the
deferred payroll taxes will be due by December 2021, with the other
half due by December 2022. The Company has also entered into
short-term debt forbearance agreements with certain of its lenders
effective April 1, 2020, some of which will require repayment of
the forbearance over a twelve-month period following the end of the
forbearance period.
Balance Sheet and
Liquidity
The Company ended the first quarter with $27.9 million of cash
and cash equivalents, including restricted cash. As of March 31,
2020, the Company financed its owned communities with mortgages
totaling $923.0 million at interest rates averaging 4.7%. The
majority of the Company’s debt is at fixed interest rates excluding
three bridge loans totaling approximately $82.9 million, all with
maturities in the first quarter of 2021, and approximately $50
million of long-term variable rate debt under the Company’s Master
Credit Facility. The earliest maturity date for the Company’s
fixed-rate debt is in 2022.
Going Concern
As described above, COVID-19 has caused, and
management expects will continue to cause, a decline in the
occupancy levels at the Company’s communities that will negatively
impact revenues. Also as described above, the recent outbreak
of COVID-19 has required the Company to incur, and
management expects will require the Company to continue to incur,
significant additional operating costs and expenses in order to
care for its residents. Further, residents at certain of its
senior housing communities have tested positive
for COVID-19, which has increased the costs of caring for
the residents at such communities and has resulted in reduced
occupancies at such communities.
ASC 205-40, “Disclosure of Uncertainties about an Entity’s
Ability to Continue as a Going Concern,” requires an evaluation of
whether there are conditions or events, considered in the
aggregate, that raise substantial doubt about an entity’s ability
to continue as a going concern in the twelve-month period following
the date its financial statements are issued. In complying
with the requirements under U.S. GAAP to complete an evaluation
without considering mitigating factors, the Company considered
several conditions or events including (1) uncertainty around the
impact of COVID-19 on the Company’s financial results, and (2)
anticipated operating losses and negative cash flows from
operations for fiscal year 2020. These conditions raise substantial
doubt about the Company’s ability to continue as a going concern
for the twelve-month period following the issuance of its financial
statements in its Form 10-Q for the quarterly period ended March
31, 2020.
The Company has taken or intends to take certain actions to
improve its liquidity position and address uncertainty about its
ability to continue as a going concern, including:
- The Company will continue to execute on its 3-year operational
turnaround plan initiated in the first quarter of 2019, which began
to show improved operating results in the first quarter of 2020 and
is expected to continue to produce incremental profitability
improvements
- The Company has implemented additional proactive spending
reductions, including reduced discretionary spending and lower
capital spending
- The Company took measures in the first quarter of 2020 to exit
underperforming leases, which will benefit the Company with reduced
rent payments through December 2020 and will eliminate all rent
payments beginning January 2021
- The Company is evaluating the opportunity to sell certain
communities that would provide positive net cash proceeds
- The Company has entered into short-term debt forbearance
agreements with certain lenders
- The Company is utilizing the CARES Act payroll tax deferral
program to delay payment of the employer portion of payroll taxes
to be incurred from April 2020 through December 2020
- The Company is evaluating possible debt and capital
options
Q1 2020 Conference Call Information
The Company will host a conference call with senior management
to discuss the Company’s first quarter 2020 financial results on
Thursday, May 21, 2020, at 10:00 a.m. Eastern Time. To participate,
dial 323-994-2082, and use confirmation code 9553593. A link
to a simultaneous webcast of the teleconference will be available
at www.capitalsenior.com through Windows Media Player or
RealPlayer.
For the convenience of the Company’s shareholders and the
public, the conference call will be recorded and available for
replay starting May 21, 2020 at 1:00 p.m. Eastern Time, until May
29, 2020 at 1:00 p.m. Eastern Time. To access the conference
call replay, call 719-457-0820, confirmation code 9553593.
The conference call will also be made available for playback via
the Company’s corporate website,
https://www.capitalsenior.com/investor-relations/conference-calls/.
Non-GAAP Financial Measures of Operating
Performance
Adjusted EBITDAR is a financial valuation measure and Adjusted
Net Income/(Loss) and Adjusted CFFO are financial performance
measures that are not calculated in accordance with U.S. generally
accepted accounting principles (“GAAP”). Non-GAAP financial
measures may have material limitations in that they do not reflect
all of the costs associated with our results of operations as
determined in accordance with GAAP. As a result, these
non-GAAP financial measures should not be considered a substitute
for, nor superior to, financial results and measures determined or
calculated in accordance with GAAP.
Adjusted EBITDAR is a valuation measure commonly used by Company
management, research analysts and investors to value companies in
the senior living industry. Since Adjusted EBITDAR excludes
interest expense and rent expense, it allows Company management,
research analysts and investors to compare the enterprise values of
different companies without regard to differences in capital
structures and leasing arrangements.
The Company believes that Adjusted Net Income/(Loss) and
Adjusted CFFO are useful as performance measures in identifying
trends in day-to-day operations because they exclude the costs
associated with acquisitions and conversions and other items that
do not ordinarily reflect the ongoing operating results of our
primary business. Adjusted Net Income/(Loss) and Adjusted
CFFO provide indicators to management of progress in achieving both
consolidated and individual business unit operating performance and
are used by research analysts and investors to evaluate the
performance of companies in the senior living industry.
The Company strongly urges you to review the reconciliation of
net loss to Adjusted EBITDAR and the reconciliation of net
income/(loss) to Adjusted Net Income/(Loss) and Adjusted CFFO,
along with the Company’s consolidated balance sheets, statements of
operations, and statements of cash flows. This is included on the
last page of this press release.
About the CompanyDallas-based
Capital Senior Living Corporation is one of the nation’s largest
operators of independent living, assisted living and memory care
communities for senior adults. The Company’s 125 communities are
home to more than 11,000 residents across 23 states and provide
compassionate, resident-centric service and care as well as
engaging programming. Capital Senior Living offers seniors
the freedom and opportunity to successfully, comfortably and
happily age in place. For more information, visit
www.capitalsenior.com or connect with the Company on Facebook.
Safe HarborThe forward-looking
statements in this release are subject to certain risks and
uncertainties that could cause the Company’s actual results and
financial condition to differ materially, including, but not
limited to, the continued spread of COVID-19, including the speed,
depth, geographic reach and duration of such spread, new
information that may emerge concerning the severity of COVID-19,
the actions taken to prevent or contain the spread of COVID-19 or
treat its impact, the legal, regulatory and administrative
developments that occur at the federal, state and local levels in
response to the COVID-19 pandemic, and the frequency and magnitude
of legal actions and liability claims that may arise due to
COVID-19 or the Company’s response efforts; the impact of COVID-19
on the Company’s ability to continue as a going concern, the
Company’s ability to generate sufficient cash flows from
operations, additional proceeds from debt refinancings, and
proceeds from the sale of assets to satisfy its short and long-term
debt and lease obligations and to fund the Company’s capital
improvement projects to expand, redevelop, and/or reposition its
senior living communities; the Company’s ability to obtain
additional capital on terms acceptable to it; the Company’s ability
to extend or refinance its existing debt as such debt matures; the
Company’s compliance with its debt and lease agreements, including
certain financial covenants, and the risk of cross-default in the
event such non-compliance occurs; the Company’s ability to complete
acquisitions and dispositions upon favorable terms or at all; the
risk of oversupply and increased competition in the markets which
the Company operates; the risk of increased competition for skilled
workers due to wage pressure and changes in regulatory
requirements; the departure of the Company’s key officers and
personnel; the cost and difficulty of complying with applicable
licensure, legislative oversight, or regulatory changes; the risks
associated with a decline in economic conditions generally; the
adequacy and continued availability of the Company’s insurance
policies and the Company’s ability to recover any losses it
sustains under such policies; changes in accounting principles and
interpretations; and the other risks and factors identified from
time to time in the Company’s reports filed with the Securities and
Exchange Commission.
For information about Capital Senior Living, visit
www.capitalsenior.com.
Investor Contact Carey P. Hendrickson, Chief Financial Officer,
at 972-770-5600 or chendrickson@capitalsenior.com.
Press Contact Susan J. Turkell at 303-766-4343 or
sturkell@capitalsenior.com.
CAPITAL SENIOR LIVING CORPORATION |
CONSOLIDATED BALANCE SHEETS |
(unaudited, in thousands, except per share
data) |
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
(In thousands) |
ASSETS |
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
17,729 |
|
|
$ |
23,975 |
|
Restricted cash |
|
|
10,143 |
|
|
|
13,088 |
|
Accounts receivable, net |
|
|
7,462 |
|
|
|
8,143 |
|
Federal and state income taxes receivable |
|
|
72 |
|
|
|
72 |
|
Property tax and insurance deposits |
|
|
6,567 |
|
|
|
12,627 |
|
Prepaid expenses and other |
|
|
4,912 |
|
|
|
5,308 |
|
Total current assets |
|
|
46,885 |
|
|
|
63,213 |
|
Property and equipment, net |
|
|
908,954 |
|
|
|
969,211 |
|
Operating lease right-of-use
assets, net |
|
|
18,815 |
|
|
|
224,523 |
|
Deferred taxes, net |
|
|
76 |
|
|
|
76 |
|
Other assets, net |
|
|
3,941 |
|
|
|
10,673 |
|
Total assets |
|
$ |
978,671 |
|
|
$ |
1,267,696 |
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
(DEFICIT) |
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
8,195 |
|
|
$ |
10,382 |
|
Accrued expenses |
|
|
38,563 |
|
|
|
46,227 |
|
Current portion of notes payable, net of deferred loan costs |
|
|
14,400 |
|
|
|
15,819 |
|
Deferred income |
|
|
6,835 |
|
|
|
7,201 |
|
Current portion of financing obligations |
|
|
— |
|
|
|
1,741 |
|
Current portion of lease liabilities |
|
|
38,976 |
|
|
|
45,988 |
|
Federal and state income taxes payable |
|
|
644 |
|
|
|
420 |
|
Customer deposits |
|
|
1,179 |
|
|
|
1,247 |
|
Total current liabilities |
|
|
108,792 |
|
|
|
129,025 |
|
Financing obligations, net of
current portion |
|
|
— |
|
|
|
9,688 |
|
Lease liabilities, net of current
portion |
|
|
670 |
|
|
|
208,967 |
|
Notes payable, net of deferred
loan costs and current portion |
|
|
902,606 |
|
|
|
905,637 |
|
Commitments and
contingencies |
|
|
|
|
Shareholders’ equity
(deficit): |
|
|
|
|
Preferred stock, $.01 par value: |
|
|
— |
|
|
|
— |
|
Authorized shares — 15,000; no shares issued or outstanding |
|
|
|
|
Common stock, $.01 par value: |
|
|
|
|
Authorized shares — 65,000; issued and outstanding shares 31,389
and 31,441 in 2020 and 2019, respectively |
|
|
319 |
|
|
|
319 |
|
Additional paid-in capital |
|
|
190,982 |
|
|
|
190,386 |
|
Retained deficit |
|
|
(221,268 |
) |
|
|
(172,896 |
) |
Treasury stock, at cost — 494 shares in 2020 and 2019 |
|
|
(3,430 |
) |
|
|
(3,430 |
) |
Total shareholders’ equity (deficit) |
|
|
(33,397 |
) |
|
|
14,379 |
|
Total liabilities and shareholders’ equity (deficit) |
|
$ |
978,671 |
|
|
$ |
1,267,696 |
|
CAPITAL
SENIOR LIVING CORPORATION |
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS |
|
|
(unaudited,
in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
Resident revenue |
|
$ |
105,616 |
|
|
$ |
114,176 |
|
|
|
|
Management fees |
|
|
56 |
|
|
|
— |
|
|
|
Community reimbursement revenue |
|
|
457 |
|
|
|
— |
|
|
|
Total revenues |
|
|
106,129 |
|
|
|
114,176 |
|
|
|
Expenses: |
|
|
|
|
|
|
Operating expenses (exclusive of facility lease expense and
depreciation and amortization expense shown below) |
|
|
75,402 |
|
|
|
75,405 |
|
|
|
General and administrative expenses |
|
|
6,685 |
|
|
|
7,570 |
|
|
|
Facility lease expense |
|
|
10,992 |
|
|
|
14,235 |
|
|
|
Stock-based compensation expense |
|
|
596 |
|
|
|
(978 |
) |
|
|
Depreciation and amortization expense |
|
|
15,715 |
|
|
|
15,974 |
|
|
|
Community reimbursement expense |
|
|
457 |
|
|
|
— |
|
|
|
Total expenses |
|
|
109,847 |
|
|
|
112,206 |
|
|
|
Income
(Loss) from operations |
|
|
(3,718 |
) |
|
|
1,970 |
|
|
|
Other income
(expense): |
|
|
|
|
|
|
Interest income |
|
|
54 |
|
|
|
57 |
|
|
|
Interest expense |
|
|
(11,670 |
) |
|
|
(12,564 |
) |
|
|
Write down of assets held for sale |
|
|
— |
|
|
|
(2,340 |
) |
|
|
Long-lived asset impairment |
|
|
(36,461 |
) |
|
|
— |
|
|
|
Gain on facility lease modification and termination, net |
|
|
11,010 |
|
|
|
— |
|
|
|
Loss on disposition of assets, net |
|
|
(7,356 |
) |
|
|
— |
|
|
|
Other income |
|
|
1 |
|
|
|
23 |
|
|
|
Loss before
provision for income taxes |
|
|
(48,140 |
) |
|
|
(12,854 |
) |
|
|
Provision
for income taxes |
|
|
(232 |
) |
|
|
(130 |
) |
|
|
Net
loss |
|
$ |
(48,372 |
) |
|
$ |
(12,984 |
) |
|
|
Per share
data: |
|
|
|
|
|
|
Basic net loss per share |
|
$ |
(1.59 |
) |
|
$ |
(0.43 |
) |
|
|
Diluted net loss per share |
|
$ |
(1.59 |
) |
|
$ |
(0.43 |
) |
|
|
Weighted average shares outstanding — basic |
|
|
30,411 |
|
|
|
30,102 |
|
|
|
Weighted average shares outstanding — diluted |
|
|
30,411 |
|
|
|
30,102 |
|
|
|
Comprehensive loss |
|
$ |
(48,372 |
) |
|
$ |
(12,984 |
) |
|
|
|
|
|
|
|
|
|
|
CAPITAL
SENIOR LIVING CORPORATION |
CONSOLIDATED
STATEMENTS OF SHAREHOLDERS' EQUITY |
(unaudited,
in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
AdditionalPaid-In |
|
Retained |
|
Treasury |
|
|
|
|
Shares |
|
Amount |
|
Capital |
|
Deficit |
|
Stock |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
thousands) |
Balance at
January 1, 2019 |
|
31,273 |
|
|
$ |
318 |
|
|
$ |
187,879 |
|
|
$ |
(149,502 |
) |
|
|
$ |
(3,430 |
) |
|
|
$ |
35,265 |
|
Adoption of ASC 842 |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
12,636 |
|
|
|
— |
|
|
|
12,636 |
|
Restricted stock awards (cancellations), net |
|
(150 |
) |
|
|
(2 |
) |
|
|
2 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation |
|
— |
|
|
|
— |
|
|
|
(978 |
) |
|
|
— |
|
|
|
— |
|
|
|
(978 |
) |
Net loss |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(12,984 |
) |
|
|
— |
|
|
|
(12,984 |
) |
Balance at
March 31, 2019 |
|
31,123 |
|
|
$ |
316 |
|
|
$ |
186,903 |
|
|
$ |
(149,850 |
) |
|
$ |
(3,430 |
) |
|
$ |
33,939 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
January 1, 2020 |
|
31,441 |
|
|
$ |
319 |
|
|
$ |
190,386 |
|
|
$ |
(172,896 |
) |
|
|
$ |
(3,430 |
) |
|
|
$ |
14,379 |
|
Restricted stock awards |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation |
|
— |
|
|
|
— |
|
|
|
596 |
|
|
|
— |
|
|
|
— |
|
|
|
596 |
|
Net loss |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(48,372 |
) |
|
|
— |
|
|
|
(48,372 |
) |
Balance at
March 31, 2020 |
|
31,441 |
|
|
$ |
319 |
|
|
$ |
190,982 |
|
|
$ |
(221,268 |
) |
|
$ |
(3,430 |
) |
|
$ |
(33,397 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL SENIOR LIVING CORPORATION |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(unaudited, in thousands, except per share
data) |
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
Operating
Activities |
|
|
|
|
Net loss |
|
$ |
(48,372 |
) |
|
$ |
(12,984 |
) |
Adjustments to reconcile net loss
to net cash used in operating activities: |
|
|
|
|
Depreciation and amortization |
|
|
15,715 |
|
|
|
15,974 |
|
Amortization of deferred financing charges |
|
|
464 |
|
|
|
432 |
|
Amortization of deferred lease costs and lease intangibles,
net |
|
|
— |
|
|
|
0 |
|
Deferred income |
|
|
137 |
|
|
|
(41 |
) |
Operating lease expense adjustment |
|
|
(2,716 |
) |
|
|
(702 |
) |
Loss on disposition of assets, net |
|
|
7,356 |
|
|
|
— |
|
Gain on lease related transactions, net |
|
|
(11,010 |
) |
|
|
— |
|
Long-lived asset impairment |
|
|
36,461 |
|
|
|
— |
|
Write-down of assets held for sale |
|
|
— |
|
|
|
2,340 |
|
Provision for bad debts |
|
|
745 |
|
|
|
805 |
|
Stock-based compensation expense |
|
|
596 |
|
|
|
(978 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
Accounts receivable |
|
|
(72 |
) |
|
|
(695 |
) |
Property tax and insurance deposits |
|
|
4,059 |
|
|
|
4,586 |
|
Prepaid expenses and other |
|
|
893 |
|
|
|
487 |
|
Other assets |
|
|
(164 |
) |
|
|
482 |
|
Accounts payable |
|
|
(1,047 |
) |
|
|
(6,894 |
) |
Accrued expenses |
|
|
(7,648 |
) |
|
|
(3,674 |
) |
Other liabilities |
|
|
13 |
|
|
|
— |
|
Federal and state income taxes receivable/payable |
|
|
224 |
|
|
|
153 |
|
Deferred resident revenue |
|
|
(424 |
) |
|
|
(453 |
) |
Customer deposits |
|
|
(69 |
) |
|
|
17 |
|
Net cash used in operating
activities |
|
|
(4,859 |
) |
|
|
(1,145 |
) |
Investing
Activities |
|
|
|
|
Capital expenditures |
|
|
(5,351 |
) |
|
|
(3,353 |
) |
Proceeds from disposition of
assets |
|
|
6,396 |
|
|
|
0 |
|
Net cash provided by (used in)
investing activities |
|
|
1,045 |
|
|
|
(3,353 |
) |
Financing
Activities |
|
|
|
|
Repayments of notes payable |
|
|
(4,922 |
) |
|
|
(4,333 |
) |
Cash payments for financing
obligations |
|
|
(455 |
) |
|
|
(129 |
) |
Deferred financing charges
paid |
|
|
— |
|
|
|
(143 |
) |
Net cash used in financing
activities |
|
|
(5,377 |
) |
|
|
(4,605 |
) |
Decrease in cash and cash
equivalents |
|
|
(9,191 |
) |
|
|
(9,103 |
) |
Cash and cash equivalents and
restricted cash at beginning of period |
|
|
37,063 |
|
|
|
44,320 |
|
Cash and cash equivalents and
restricted cash at end of period |
|
$ |
27,872 |
|
|
$ |
35,217 |
|
Supplemental
Disclosures |
|
|
|
|
Cash paid during the period
for: |
|
|
|
|
Interest |
|
$ |
10,798 |
|
|
$ |
11,167 |
|
Lease modification and termination |
|
$ |
6,785 |
|
|
$ |
— |
|
Income taxes |
|
$ |
9 |
|
|
$ |
7 |
|
Capital Senior Living Corporation |
|
|
|
|
|
|
|
|
|
|
Supplemental Information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Communities |
|
Average Resident Capacity |
|
Average Units |
|
|
|
|
Q1 20 |
|
Q1 19 |
|
Q1 20 |
|
Q1 19 |
|
Q1 20 |
|
Q1 19 |
Portfolio Data |
|
|
|
|
|
|
|
|
|
|
|
|
I. Community Ownership / Management |
|
|
|
|
|
|
|
|
|
|
|
Consolidated communities |
|
|
|
|
|
|
|
|
|
|
|
|
Owned |
|
|
79 |
|
|
83 |
|
|
10,055 |
|
|
10,767 |
|
|
7,634 |
|
|
8,249 |
|
|
Leased |
|
|
39 |
|
|
46 |
|
|
4,981 |
|
|
5,756 |
|
|
3,754 |
|
|
4,414 |
|
|
Third party
communities managed |
|
|
6 |
|
|
- |
|
|
549 |
|
|
- |
|
|
476 |
|
|
- |
|
|
Total |
|
|
124 |
|
|
129 |
|
|
15,585 |
|
|
16,523 |
|
|
11,864 |
|
|
12,663 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Independent living |
|
|
|
|
|
6,251 |
|
|
6,879 |
|
|
4,278 |
|
|
4,965 |
|
|
Assisted living |
|
|
|
|
|
9,334 |
|
|
9,644 |
|
|
7,586 |
|
|
7,698 |
|
|
Total |
|
|
|
|
|
|
15,585 |
|
|
16,523 |
|
|
11,864 |
|
|
12,663 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II. Percentage of Operating Portfolio |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated communities |
|
|
|
|
|
|
|
|
|
|
|
|
Owned |
|
|
63.7 |
% |
|
64.3 |
% |
|
64.5 |
% |
|
65.2 |
% |
|
64.3 |
% |
|
65.1 |
% |
|
Leased |
|
|
31.5 |
% |
|
35.7 |
% |
|
32.0 |
% |
|
34.8 |
% |
|
31.6 |
% |
|
34.9 |
% |
|
Third party
communities managed |
|
|
4.8 |
% |
|
0.0 |
% |
|
3.5 |
% |
|
0.0 |
% |
|
4.0 |
% |
|
0.0 |
% |
|
Total |
|
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Independent living |
|
|
|
|
|
40.1 |
% |
|
41.6 |
% |
|
36.1 |
% |
|
39.2 |
% |
|
Assisted living |
|
|
|
|
|
59.9 |
% |
|
58.4 |
% |
|
63.9 |
% |
|
60.8 |
% |
|
Total |
|
|
|
|
|
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
Capital Senior Living Corporation |
|
|
|
|
Supplemental Information |
|
|
|
|
|
|
|
|
|
|
|
Selected Operating Results |
|
Q1 20 |
|
Q1 19 |
I. Owned communities |
|
|
|
|
|
|
Number of
communities at quarter-end |
|
|
79 |
|
|
83 |
|
|
Resident
capacity |
|
|
10,055 |
|
|
10,767 |
|
|
Unit
capacity |
|
|
7,634 |
|
|
8,249 |
|
|
Financial occupancy (1) |
|
80.6 |
% |
|
84.1 |
% |
|
Revenue (in millions) |
|
67.9 |
|
|
73.2 |
|
|
Operating expenses (in millions) (2) |
49.1 |
|
|
50.1 |
|
|
Operating
margin |
|
|
28 |
% |
|
32 |
% |
|
Average monthly rent |
|
3,579 |
|
|
3,517 |
|
II. Leased communities |
|
|
|
|
|
|
Number of
communities at quarter-end |
|
|
39 |
|
|
46 |
|
|
Resident
capacity |
|
|
4,981 |
|
|
5,756 |
|
|
Unit
capacity |
|
|
3,754 |
|
|
4,414 |
|
|
Financial occupancy (1) |
|
78.8 |
% |
|
81.3 |
% |
|
Revenue (in millions) |
|
37.7 |
|
|
41.0 |
|
|
Operating expenses (in millions) (2) |
24.6 |
|
|
25.0 |
|
|
Operating
margin |
|
|
35 |
% |
|
39 |
% |
|
Average monthly rent |
|
3,857 |
|
|
3,804 |
|
III. Consolidated communities |
|
|
|
|
|
Number of
communities at quarter-end |
|
|
118 |
|
|
129 |
|
|
Resident
capacity |
|
|
15,036 |
|
|
16,523 |
|
|
Unit
capacity |
|
|
11,388 |
|
|
12,663 |
|
|
Financial occupancy (1) |
|
80.0 |
% |
|
83.1 |
% |
|
Revenue (in millions) |
|
105.6 |
|
|
114.2 |
|
|
Operating expenses (in millions) (2) |
73.6 |
|
|
75.1 |
|
|
Operating
margin |
|
|
30 |
% |
|
34 |
% |
|
Average monthly rent |
|
3,674 |
|
|
3,615 |
|
IV. Communities under management |
|
|
|
|
Number of
communities at quarter-end |
|
|
124 |
|
|
129 |
|
|
Resident
capacity |
|
|
15,585 |
|
|
16,523 |
|
|
Unit
capacity |
|
|
11,864 |
|
|
12,663 |
|
|
Financial occupancy (1) |
|
80.1 |
% |
|
83.1 |
% |
|
Revenue (in millions) |
|
106.7 |
|
|
114.2 |
|
|
Operating expenses (in millions) (2) |
74.3 |
|
|
75.1 |
|
|
Operating
margin |
|
|
30 |
% |
|
34 |
% |
|
Average monthly rent |
|
3,658 |
|
|
3,615 |
|
V. Same Store Consolidated communities |
|
|
|
|
Number of communities |
|
118 |
|
|
118 |
|
|
Resident
capacity |
|
|
15,036 |
|
|
15,036 |
|
|
Unit
capacity |
|
|
11,388 |
|
|
11,400 |
|
|
Financial occupancy (1) |
|
79.9 |
% |
|
82.7 |
% |
|
Revenue (in millions) |
|
101.6 |
|
|
104.4 |
|
|
Operating expenses (in millions) (2) |
70.3 |
|
|
68.7 |
|
|
Operating
margin |
|
|
31 |
% |
|
34 |
% |
|
Average monthly rent |
|
3,722 |
|
|
3,689 |
|
VI. General and Administrative expenses as a percent of
Total Revenues under Management |
|
Current Quarter (3) |
|
4.9 |
% |
|
5.1 |
% |
|
Year to Date
(3) |
|
|
4.9 |
% |
|
5.1 |
% |
VII. Consolidated Debt Information (in thousands, except
for interest rates) |
(Excludes insurance premium
financing) |
|
|
|
|
Total variable rate mortgage debt |
790,052 |
|
|
848,925 |
|
|
Total fixed rate debt |
|
132,924 |
|
|
129,949 |
|
|
Weighted average interest rate |
4.7 |
% |
|
4.9 |
% |
|
|
|
|
|
|
|
(1) - |
Financial occupancy represents actual days occupied divided by
total number of available days during the quarter. |
(2) - |
Excludes management fees, provision for bad debts, and transaction
and conversion costs. |
(3) - |
Excludes transaction and conversion costs. |
|
|
|
CAPITAL SENIOR LIVING CORPORATION |
NON-GAAP RECONCILIATIONS |
(In thousands, except per share data) |
|
|
|
|
|
Three months ended March 31, |
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
Adjusted
EBITDAR |
|
|
|
Net loss |
|
(48,372 |
) |
|
|
(12,984 |
) |
Depreciation and amortization expense |
|
15,715 |
|
|
|
15,974 |
|
Stock-based compensation expense |
|
596 |
|
|
|
(978 |
) |
Facility lease expense |
|
10,992 |
|
|
|
14,235 |
|
Provision for bad debts |
|
745 |
|
|
|
805 |
|
Interest income |
|
(54 |
) |
|
|
(57 |
) |
Interest expense |
|
11,670 |
|
|
|
12,564 |
|
Long-lived asset impairment |
|
36,461 |
|
|
|
- |
|
Loss (gain) on lease related transactions, net |
|
(11,010 |
) |
|
|
- |
|
Write down of asset held for sale |
|
- |
|
|
|
2,340 |
|
Loss (gain) on disposition of assets, net |
|
7,356 |
|
|
|
- |
|
Other expense (income) |
|
(1 |
) |
|
|
(23 |
) |
Provision for income taxes |
|
232 |
|
|
|
130 |
|
Casualty losses |
|
423 |
|
|
|
268 |
|
Transaction and conversion costs |
|
1,418 |
|
|
|
276 |
|
Employee placement and separation costs |
|
90 |
|
|
|
1,717 |
|
Communities excluded due to repositioning/lease-up |
|
- |
|
|
|
55 |
|
Adjusted EBITDAR |
$ |
26,261 |
|
|
$ |
34,322 |
|
COVID-19 expenses |
|
291 |
|
|
|
- |
|
Adjusted EBITDAR excluding COVID-19 expenses |
$ |
26,552 |
|
|
$ |
34,322 |
|
|
|
|
|
Adjusted
revenues |
|
|
|
Total revenues |
$ |
106,129 |
|
|
$ |
114,176 |
|
Communities excluded due to repositioning/lease-up |
|
- |
|
|
|
(1,289 |
) |
Adjusted revenues |
$ |
106,129 |
|
|
$ |
112,887 |
|
|
|
|
|
Adjusted net loss and
Adjusted net loss per share |
|
|
|
Net loss |
|
(48,372 |
) |
|
|
(12,984 |
) |
Casualty losses |
|
423 |
|
|
|
268 |
|
Transaction and conversion costs |
|
1,418 |
|
|
|
294 |
|
Employee placement and separation costs |
|
90 |
|
|
|
1,717 |
|
Write down of asset held for sale |
|
- |
|
|
|
2,340 |
|
Long-lived asset impairment |
|
36,461 |
|
|
|
- |
|
Loss (gain) on lease related transactions, net |
|
(11,010 |
) |
|
|
- |
|
Loss (gain) on disposition of assets, net |
|
7,356 |
|
|
|
- |
|
Tax impact of Non-GAAP adjustments (25%) |
|
(8,684 |
) |
|
|
(1,155 |
) |
Deferred tax asset valuation allowance |
|
- |
|
|
|
2,901 |
|
Communities excluded due to repositioning/lease-up |
|
- |
|
|
|
683 |
|
Adjusted net loss |
$ |
(22,318 |
) |
|
$ |
(5,936 |
) |
Diluted shares outstanding |
|
30,411 |
|
|
|
30,102 |
|
Adjusted net income (loss) per share |
$ |
(0.73 |
) |
|
$ |
(0.20 |
) |
COVID-19 expenses |
|
291 |
|
|
|
- |
|
Adjusted net loss excluding COVID-19 expenses |
$ |
(22,027 |
) |
|
$ |
(5,936 |
) |
Adjusted net income (loss) per share excluding COVID-19
expenses |
$ |
(0.72 |
) |
|
$ |
(0.20 |
) |
|
|
|
|
Adjusted
CFFO |
|
|
|
Net loss |
|
(48,372 |
) |
|
|
(12,984 |
) |
Non-cash charges, net |
|
47,748 |
|
|
|
17,830 |
|
Operating lease payment adjustment to normalize lease
commitments |
|
- |
|
|
|
(910 |
) |
Recurring capital expenditures |
|
(1,136 |
) |
|
|
(1,148 |
) |
Casualty losses |
|
423 |
|
|
|
268 |
|
Transaction and conversion costs |
|
1,418 |
|
|
|
294 |
|
Employee placement and separation costs |
|
90 |
|
|
|
1,717 |
|
Communities excluded due to repositioning/lease-up |
|
- |
|
|
|
438 |
|
Adjusted CFFO |
$ |
171 |
|
|
$ |
5,505 |
|
COVID-19 expenses |
|
291 |
|
|
|
- |
|
Adjusted CFFO excluding COVID-19 expense |
$ |
462 |
|
|
$ |
5,505 |
|
Capital Senior Living (NYSE:CSU)
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From Mar 2024 to Apr 2024
Capital Senior Living (NYSE:CSU)
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From Apr 2023 to Apr 2024