beat street by a penny
Brookdale Living Communities Reports First Quarter Results
CHICAGO, May 14 /PRNewswire/ -- Brookdale Living Communities, Inc. (Nasdaq: BLCI), a national provider of senior and assisted living services to the elderly, today announced first quarter net income of $1.1 million, or $0.12 per diluted share, on revenues of $16.9 million. Improved results were driven by continued strong performance for the Company's facilities, as well as new leases and significant progress on properties under development.
Brookdale Living Communities Highlights for the First Quarter of 1998
-- Net income of $1.1 million, or $0.12 per diluted share.
-- First quarter total revenues of $16.9 million, an increase of 126% over
year-earlier period. Resident fees increased by 110%.
-- "Same store" revenue increase of 6% over year-earlier period, with an
increase of more than 19% on "same store" facility operating income
versus the prior year period.
-- After tax cash flow (as defined below) of $2.7 million, or $0.29 per
basic share, ($0.28 per diluted share).
-- Average occupancy rates on stabilized facilities of approximately 97%
at March 31, 1998.
-- Two additional development sites under definitive agreement.
-- Commencement of construction on the Company's Raleigh, North Carolina
facility.
-- Executed definitive agreement for the acquisition of a $17 million,
125-unit property in the Northeastern United States.
Operating Results
Total revenues in the first quarter of 1998 were $16.9 million; a 126% increase from $7.5 million during the first quarter of 1997. Resident fees were approximately $15.7 million, up 110% from the same period in the prior year, attributable mainly to acquisitions and lease transactions consummated since such time. "Same store" revenues for the five properties operated for both the full Q1 1997 and Q1 1998 increased approximately 6% to $7.9 million. At March 31, 1998, the average occupancy of all of the Company's facilities was approximately 95%, however, excluding the 276-unit Harbor Village property, which was leased on March 7, 1998 and which was only approximately 75% occupied at such date, the average occupancy was 97%. Total revenues included approximately $1.19 million of property development fees related to projects being developed for unaffiliated third party owners. The Company has the option to purchase such properties after stabilization and will manage such projects after completion of construction through stabilization and until the Company elects to exercise its purchase option.
For all facilities owned or leased by the Company, the facility operating margin (resident fees less facility operating expenses, divided by resident fees) for the quarter ended March 31, 1998 was 45%, compared to 44% in the prior year quarter ended March 31, 1997, this despite the Company commencing operation of eight additional properties since Q1 1997 which had much lower (industry average) operating margins than Brookdale's historical margin levels. First quarter 1997 results also included two properties, which were leased in December 1996, with such similar lower margins. In Q1 1998, same store facility operating income increased over 19% to $3.9 million with a facility operating margin of over 49% versus the aforementioned 44% in Q1 1997. Earnings before interest, taxes, depreciation, amortization and rent ("EBITDAR") increased 126% to $7.0 million, with EBITDAR margin in Q1 1998 of 42%, compared to 42% in Q1 1997, however, Q1 1997 "G&A" included only property management fees for certain of the Predecessor Company properties. After tax cash flow (defined as net income plus depreciation, amortization and deferred taxes) was $2.7 million, or $0.29 per basic share ($0.28 per diluted share).
"Our improving revenues and earnings this quarter, which is only our third full quarter since the Company's IPO in May of 1997, are a result of our ability to execute what we feel is one of the best operating strategies in the senior living sector," said Mark J. Schulte, President and Chief Executive Officer of Brookdale.
At March 31, 1998, the Company operated 14 senior and assisted living facilities, consisting of approximately 3,100 units, located in upscale urban and suburban areas in nine states.
Other Recent Events
The Company also announced that it has entered into definitive agreements for two additional development sites in Pittsburgh, Pa. and Sterling Heights, Mich. Brookdale expects to develop its prototype facility of approximately 220 units at each of these sites. These sites bring Brookdale's total units under development and construction to over 1,500. In addition, Brookdale began construction of a 220-unit prototype facility in Raleigh, N.C. This brings the total units under construction to approximately 660.
Brookdale also announced that the Company closed on the previously announced lease of the 292-unit Atrium of San Jose, Calif. Further, on April 30, 1998, Brookdale entered into a definitive agreement to acquire a 125-unit facility for approximately $17 million. Disclosure of additional information is subject to confidentiality provisions of the agreement. Brookdale expects to close on this transaction by late June or early July 1998.
Outlook
"We continue to see strong demand for Brookdale's product in our target markets, reflected in our high average occupancy rates and waiting lists at our facilities," Mr. Schulte said. "We are proving that our differentiated operating strategy within the senior living sector, premised on building and acquiring larger facilities in urban and suburban settings while offering two pieces of the continuum, independent and assisted living, is a profitable and solid strategy. We plan to remain very focused on this upscale niche and are confident that our business plan will yield the desired results in the near and long term." |
