Senior Housing: Assisted Living earnings up 34.5% on higher rates

By Guy Boulton for Milwaukee Journal Sentinel

Nov. 03–Assisted Living Concepts Inc., which operates a chain of senior living centers, reported a 34.5% increase in third-quarter earnings on higher overall rates.

The company, based in Menomonee Falls, reported net income of $4.57 million, or 39 cents, up from $3.39 million, or 29 cents, in the period last year. Revenue increased to $58.5 million, or 2.3%, from $57.2 million.

After earnings were released, the company’s stock closed up 93 cents, or 2.9%, at $32.66.

Assisted Living Concepts said average private-pay occupancy was up by 111 units from the third quarter of 2009.

The company has been working for several years to reduce the number of residents at its centers whose care is paid for by Medicaid programs. Those programs pay lower rates than residents who pay for their own care.

Assisted Living Concepts bought nine of its previously leased centers for $27.5 million plus transaction costs in the third quarter and the early part of its fourth quarter. Two of the centers are in New Jersey and seven are in Texas. The centers have a combined 365 units.

“We continue to believe that the ownership of our residences and the ability to put in place fixed-rate financing without significant operational restrictions are important steps toward enhancing the value of our business model,” Laurie Bebo, the company’s president and chief executive, said in the earnings statement. “As demonstrated by recent transactions, senior living real estate valuations appear to be on the rise and further emphasizes the inherent value of the ALC (Assisted Living Concepts) portfolio.”

For the first nine months of this year, Assisted Living Concepts reported net income, after one-time charges, of $11.1 million, or 95 cents a share, on revenue of $174.7 million, compared with a net loss of $4.5 million, or 38 cents a share, on revenue of $171 million last year.

The company said its board of directors extended and expanded its stock repurchase program on Aug. 9, authorizing the purchase of up to $15 million of its common stock through Aug. 9, 2011.

Assisted Living Concepts Inc.

3rd quarter % 9/30 2010 2009 change Sales $58.5 $57.2 2.3 Net income 4.57 3.39 34.9 EPS (diluted) 0.39 0.29 34.5 9 months Sales $174.7 $171.0 2.2 Net income 11.08 -4.48 n.a. EPS (diluted) 0.95 -0.38 n.a.

Figures in millions except for earnings per share. Percentages are based on unrounded sales and income figures.

Year-ago results include a loss from discontinued operations of $802,000, or 7 cents a share, for the quarter and $980,000, or 8 cents, for the nine months.

[istockanalyst.com]

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