right in line
Brookdale Living Communities Reports Second Quarter Results
CHICAGO, Aug. 4 /PRNewswire/ -- Brookdale Living Communities, Inc. (Nasdaq: BLCI), a national provider of senior and assisted living services to the elderly, today announced second quarter net income of $1.5 million, or $0.16 per diluted share, on revenues of $18.7 million. Improved results were driven by continued strong results at the Company's facilities, as well as portfolio growth and significant progress on properties under development.
Brookdale Living Communities Highlights for the Second Quarter of 1998
* Net income of $1.5 million, or $0.16 per diluted share.
* Second quarter total revenues of $18.7 million, an increase of 95% over
year-earlier period. Resident fees increased by 80%.
* "Same store" revenue increase of 5% over year-earlier period, with an
increase of approximately 12% on "same store" facility operating income
versus the prior year period.
* After tax cash flow (as defined below) of $3.1 million, or $0.33 per
basic share ($0.32 per diluted share).
* Average occupancy rates on stabilized facilities of approximately 97%
at June 30, 1998.
* A total of four of the Company's prototype properties under
construction (885 units), with an additional six properties in
development (1,320 units or approximately 2,200 units in total).
* Executed definitive agreement for the acquisition of a $16 million,
145-unit property in Santa Fe, N.M.
Operating Results
Total revenues in the second quarter of 1998 were $18.7 million; a 95% increase from $9.6 million during the second quarter of 1997. Resident fees were approximately $17.2 million, up 80% 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 Q2 1997 and Q2 1998 increased approximately 5% to $8.0 million. At June 30, 1998, the average occupancy of all of the Company's facilities was approximately 95%, however, excluding the 276-unit Harbor Village property (currently approximately 80% leased), 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 $1.39 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 or assign such option to a third party lessor with Brookdale as lessee.
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 June 30, 1998 was 44%, compared to 46% in the prior year quarter ended June 30, 1997, the decrease being primarily due to the Company commencing operation of nine additional properties since Q2 1997 which had lower average operating margins than Brookdale's historical same- store margin levels. In Q2 1998, same store facility operating income increased approximately 12% to $3.9 million with a facility operating margin of 49% versus 46% in Q2 1997. Earnings before interest, taxes, depreciation, amortization and rent ("EBITDAR") increased 100% to $7.8 million, with EBITDAR margin in Q2 1998 of 42%, compared to 41% in Q2 1997, however, Q2 1997 "G&A" included only property management fees for certain of the Predecessor Company properties through May 7, 1997 (the date of the Company's IPO) and Brookdale general and administration expenses from May 7 through June 30, 1997. After tax cash flow (defined as net income plus depreciation, amortization and deferred taxes) was $3.1 million, or $0.33 per basic share ($0.32 per diluted share).
"We are pleased to report that we are again meeting analysts' expectations this quarter -- as we have done every quarter since the Company's IPO in May of 1997," said Mark J. Schulte, President and Chief Executive Officer of Brookdale. "These results demonstrate our ability to execute our business plan, and validate our strategy in the senior and assisted living sector."
At July 2, 1998, the Company operated 16 independent and assisted living facilities, consisting of approximately 3,500 units, located in upscale urban and suburban areas in ten states.
Other Recent Events
Brookdale recently began construction of a 235-unit prototype facility in Glen Ellyn, Ill. This brings the total units under construction to approximately 885, including the Austin, Texas, Southfield, Mich., and Raleigh, N.C. sites.
Brookdale also announced that on July 2, 1998, the Company closed on the previously announced lease of the 123-unit Chatfield facility, in West Hartford, Conn. Further, on July 10, 1998, Brookdale entered into a definitive agreement to acquire a 145-unit facility for approximately $16 million, The Ponce de Leon, in Santa Fe, N.M. Disclosure of additional information is subject to confidentiality provisions of the agreement. Brookdale expects to close on this transaction by late August or early September 1998.
Outlook
"We are proving that our differentiated operating strategy within the senior and assisted 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, resulting in high occupancy and superior operating margins," Mr. Schulte said. "These results validate our business plan which, we believe, will continue to create long-term value for our shareholders," Schulte continued.
Brookdale Living Communities, Inc., is a provider of senior and assisted living services to the elderly, with 16 facilities in ten states containing an aggregate of approximately 3,500 units in upscale urban and suburban communities. |
