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To: Panita who wrote (73663)	5/6/1999 9:34:00 AM
From: kendall harmon	Respond to of 119973

ALI-news from Milwaukee Bad news slams assisted living company's stock Alternative Living foresees future earnings falling flat of expectations By Joe Manning of the Journal Sentinel staff May 06, 1999 Shares of Alternative Living Services Inc. lost nearly half their value Wednesday after first-quarter profits came in lower than expected and the company predicted its earnings for 1999 and 2000 would be below Wall Street expectations. As analysts were downgrading the stock, Alternative Living's CEO sought to reassure investors that the company is -- and will remain -- profitable. "Wall Street reacted harshly, and it will cause damage in our stock price for the short term," said Bill Lasky, president and chief executive officer of Alternative Living Services. "Our profitability is alive and well." Alternative Living is the nation's largest operator of assisted living residences, operating or managing 375 residences with a capacity of 16,195 persons in 25 states. Another 140 residences are under development and will result in a capacity of 22,653 persons, according to company figures. The company runs assisted living facilities for frail elderly who need help with daily activities such as bathing, eating, walking and shopping. The company released earnings after the market closed on Tuesday. Wednesday morning, frenzied sell orders delayed the opening of trading in the company's stock on the American Stock Exchange for more than an hour. The company's stock closed Wednesday at $11.875, down $10.125 on trading volume of 5.6 million shares, some 38 times the three-month average volume. Although revenue for the Brookfield-based company's first quarter was a record $82.9 million -- a 78% increase over the same quarter last year -- net income was off by 60% because of charges taken to change the way in which start-up costs for new facilities are accounted. The company earned 6 cents a share in the quarter. Analysts were expecting Alternative Living to earn 31 cents a share. Costs related to a pending name change to Alterra Health Care Corp. also hurt earnings, the company said. The company's prediction it would not meet Wall Street revenue expectations this year and in 2000 also drove its shares lower. Alternative Living estimated earnings per share this year will range from $1 to $1.10. Analysts polled by First Call Corp. estimated earnings of $1.43 for the year. Lasky said earnings for the two years would be lower than expected partly because the company had quickened its buyouts of joint venture partners. "By implementing this (buyout) step, we are absorbing a greater portion of the operating losses associated with the recently opened residences," Lasky said. For 2000, the company said, it will earn $1.40 to $1.60 a share. Wall Street had estimated earnings of $1.90. David Leiker, first vice president and health care services analyst at Robert W. Baird & Co. in Milwaukee, said "the biggest issue" in the company's earnings not meeting expectations was that newer Alternative Living facilities aren't filling as quickly as residences it has opened in the past. "No one can put their finger on why, but it is probably because of increased competition," Leiker said. Construction and finance costs were higher in the quarter, also leading to reduced revenue, he said. The buying out of joint ventures was also affecting the bottom line, Leiker said. Leiker said he was not certain when Alternative Living's stock would rebound. "At the end of the day, they have to rebuild some credibility with Wall Street before the stock can move higher," he said. Regardless, Leiker said Alternative Living was "pretty attractive in terms of asset value. Sooner or later, the market realizes that." Bradley Wilson, a health care analyst for B.C. Ziegler, said Alternative Living's plan to buy out joint venture partners "is probably the right thing to do." He said it was an effort "to go from an off-balance-sheet to an on-balance-sheet strategy. It's a more direct approach. Investors will better be able to understand their financing for new facility construction." Wilson said the rapidly expanding assisted living industry was capital-intensive. To raise money, Alternative Living Services has borrowed bank money and developed joint ventures with investors to finance the building of new residences. Wilson said the drop in the stock is "a short-term effect. This is an industry leader. It is recognized as being forward thinking and has attracted a lot of financing. It is the premier player in the industry."

To: Panita who wrote (73663)	5/6/1999 9:41:00 AM
From: Gator	Read Replies (1) \| Respond to of 119973

Speculative stock pick (backdoor internet IPO): Been hearing rumors that PAPO (Pangea Petroleum) is buying (or reverse merging) with an internet company called WorldLink (http://www.wl.net). Streaming video, web simulcasts, looks like a Broadcast.com type of company. PAPO was trading at 1/4 x $5 1/4 a couple of days ago, now $4 x $6 1/2. Very tight float is apparent from the trading. Trying to do more digging, but from WorldLink's web page it looks like they've got some pretty good strategic alliances, with the likes of Microsoft. Gator