Combined Sequential Quarter End Occupancy
Growth of 180 Basis Points
Sequential Quarter Management and Operating
Revenues Growth of $1.8 Million, or 4.6%
Restructuring Plan on Track as Adjusted
EBITDA Improvements Continue
AlerisLife Inc. (Nasdaq: ALR) today announced its financial
results for the three months ended September 30, 2022.
“We continued to make steady progress
implementing our plan to improve our operating results and drive
efficiencies in our organization throughout the third quarter,”
said Jeff Leer, President and Chief Executive Officer. “Owned and
managed community occupancy increased 290 basis points and 160
basis points, respectively, or 180 basis points across all
residential senior living communities, as we continue to enhance
our sales and marketing strategies. We also rounded out our
executive team with the addition of Heather Pereira as our new
Chief Financial Officer and Philip Benjamson as our new Chief
Operating Officer. We ended the quarter with sufficient liquidity
to execute on our restructuring plan and, following approximately
$3.8 million of capital improvements invested in our owned senior
living communities in the third quarter, we had $79.1 million of
cash at quarter-end and no debt maturities until 2025."
Third Quarter Summary of Financial Results:
- Quarter-end occupancy in ALR's owned senior living communities
grew 290 basis points, or bps, relative to the end of the second
quarter.
- Quarter-end occupancy for the managed portfolio increased 160
bps relative to the end of the second quarter.
- Net loss for the third quarter of 2022 was $8.5 million, or
$0.27 per diluted share, which included $1.6 million of costs
related to the restructuring plan implemented as a result of
Alvarez & Marsal's, or A&M's, operational review, compared
to a net loss of $8.8 million, or $0.28 per diluted share, for the
second quarter of 2022, and a net loss of $10.2 million, or $0.32
per diluted share, for the third quarter of 2021, which included a
$3.3 million loss from a termination of a lease and $1.2 million of
restructuring expenses related to the repositioning of ALR's
residential service offerings, partially offset by $0.8 million
which was reimbursed by Diversified Healthcare Trust, or DHC.
- Earnings before interest, taxes, depreciation and amortization,
or EBITDA, for the third quarter of 2022 was $(4.1) million
compared to $(4.4) million for the second quarter of 2022 and
$(7.0) million for the third quarter of 2021. Adjusted EBITDA, as
described further below, was $(0.5) million for the third quarter
of 2022 compared to $(1.3) million for the second quarter of 2022
and $(3.3) million for the third quarter of 2021. EBITDA and
Adjusted EBITDA are non-GAAP financial measures. Reconciliations of
net loss determined in accordance with U.S. generally accepted
accounting principles, or GAAP, to EBITDA and Adjusted EBITDA for
the third quarter of 2022 and 2021 are presented later in this
press release. The reconciliation of net loss to EBITDA and
Adjusted EBITDA for the second quarter of 2022 is presented in the
Form 8-K that ALR furnished on August 3, 2022.
- RevPAR (resident fee revenues for the corresponding portfolio
for the period divided by the average number of available units for
the corresponding portfolio for the period, divided by the number
of months in the period) for the comparable managed communities for
the third quarter of 2022 was $3,200 compared to $3,077 for the
second quarter of 2022 and $2,941 for the third quarter of 2021, an
increase of 4.0% and 8.8%, respectively.
- RevPAR for the comparable owned communities for the third
quarter of 2022 was $2,801 compared to $2,560 for the second
quarter of 2022 and $2,354 for the third quarter of 2021, an
increase of 9.4% and 19.0%, respectively.
Substantially all of ALR's business is conducted by its two
segments: (i) its residential segment through its Five Star Senior
Living, or Five Star, brand and (ii) its lifestyle services segment
primarily through its brands Ageility Physical Therapy Solutions
and Ageility Fitness, or collectively Ageility, and Windsong Home
Health. The following tables present data on the owned and leased
and managed senior living communities that ALR operates through its
Five Star brand, including comparable community data, as well as
data on the rehabilitation locations that ALR operates through its
Ageility brand, including comparable outpatient location data.
Summary of Operational Results
As of and for the Three Months
Ended
September 30, 2022
June 30, 2022
September 30, 2021
Residential Segment:
Five Star:
Number of living units (end of
period)
Independent living
10,422
10,460
10,628
Assisted living
7,734
7,696
9,402
Memory care
1,817
1,817
2,454
Skilled nursing
—
—
284
Total living units
19,973
19,973
22,768
RevPAR
Owned and Leased (1)
$
2,801
$
2,560
$
2,411
Managed
$
3,200
$
3,077
$
3,046
Quarter End Occupancy
Owned and Leased
78.4
%
75.5
%
72.9
%
Managed
77.0
%
75.4
%
73.8
%
Comparable Communities (2):
RevPAR
Owned
$
2,801
$
2,560
$
2,354
Managed
$
3,200
$
3,077
$
2,941
Quarter End Occupancy
Owned
78.4
%
75.5
%
72.9
%
Managed
77.0
%
75.4
%
74.6
%
Operating Margin (3):
Owned
(15.9
)%
(20.1
)%
(24.4
)%
Managed
4.7
%
8.4
%
7.1
%
As of and for the Three Months
Ended
September 30, 2022
June 30, 2022
September 30, 2021
Lifestyle Services Segment:
Ageility:
Number of Clinics and Locations
(4)
Inpatient clinics
8
10
10
Outpatient locations
203
202
223
Number of Visits (in thousands)
Inpatient clinics
21
23
20
Outpatient locations
156
153
147
Comparable Outpatient Locations
(5):
Caseload as a % of occupancy (6)
24.6
%
24.3
%
24.6
%
Operating margin (3)
(1.2
)%
(0.6
)%
10.0
%
___________________________
(1)
The three months ended September 30, 2021
includes four leased communities with approximately 200 living
units previously leased from HealthPeak Properties, Inc., or
HealthPeak. The lease with HealthPeak was terminated on September
30, 2021.
(2)
Comparable Communities includes financial
data for 20 owned senior living communities and 120 managed senior
living communities that ALR continuously owned or managed and
operated through its Five Star brand since July 1, 2021, exclusive
of 59 skilled nursing facility, or SNF, living units that have been
closed in one former Continuing Care Retirement Community, or
CCRC.
(3)
Operating margin is defined as operating
revenue less operating expenses divided by operating revenue in
each case for the business segment. For the Residential segment, it
is inclusive of 59 SNF living units, which have been closed in one
former CCRC. It is exclusive of Provider Relief Funds from the
Coronavirus Aid, Relief, and Economic Security Act, or the CARES
Act, and other government grants recognized as other operating
income. In addition, it excludes restructuring expenses for the
three months ended September 30, 2021 of $0.2 million for the
comparable managed communities. Managed operating margin does not
represent ALR's operating margin and is included to provide
supplemental information regarding the operating results of the
Five Star senior living communities from which ALR earns
residential management fees.
(4)
During the three months ended September
30, 2022, ALR opened six outpatient locations, closed five
outpatient locations and closed two inpatient clinics.
(5)
Comparable outpatient locations includes
financial data for 185 outpatient rehabilitation locations that ALR
continuously operated since July 1, 2021.
(6)
Represents the average number of Ageility
customers divided by average total occupancy at each of the senior
living communities where ALR operates Ageility outpatient
rehabilitation locations. Occupancy is defined as the average total
number of residents residing at the senior living communities.
Operational Review
During the quarter ended June 30, 2022, ALR engaged the
healthcare consulting arm of A&M to provide a comprehensive
operational review of ALR's business and make recommendations to
ALR's Board of Directors. The recommendations made by A&M
included general and administrative cost reductions, a corporate
reorganization that is designed to enhance accountability and
certain operational changes to support team members to ensure the
delivery of high-quality experiences to residents and customers and
to increase occupancy at ALR's senior living communities, as
further described below:
- Reduce costs annually by a target of approximately $2.0
million, net of investments to be made of approximately $3.3
million as described below, by:
- Streamlining redundant business processes and reducing
investments in non-core functions,
- rationalizing information technology systems to those that
directly support core business functions, ensuring their optimal
utilization, and
- continually assessing general and administrative expenses to
identify cost savings opportunities.
- Invest approximately $3.3 million to refocus on ALR's core
business and invest strategically in projects, processes and
systems that will enhance ALR's ability to successfully operate
ALR's residential and lifestyle services businesses, including:
- Enhancing the executive leadership team with a Chief Operating
Officer to oversee field and national operations and a Chief
Financial Officer,
- investing in a scalable and agile national operations
infrastructure to drive operational excellence and results,
and
- establishing a centralized sales function with reinstituted
regional sales support to focus on both sales and marketing
efforts.
Based on A&M's operational review, on August 3, 2022, ALR
announced a restructuring plan which includes the elimination of
certain positions in its corporate team. ALR expects to complete
this restructuring by the middle of 2023. As of the date of this
press release, ALR made the following progress with respect to the
restructuring plan:
- Aligned several functions, including sales, marketing, clinical
and resident programming, under the national operations support
function;
- Deployed sales support functions to directly support community
level sales directors to focus on improved tour to move-in
conversion rate;
- Appointed a Chief Financial Officer, effective September 19,
2022, and a Chief Operating Officer, effective October 17, 2022. In
addition, ALR continues to invest in the sales and marketing
function, including hiring a Vice President of Marketing, effective
October 3, 2022, and five sales directors; and
- Implemented approximately $2.6 million of labor and non-labor
annual cost savings, net of approximately $1.8 million in labor
investments.
In addition to the restructuring plan, ALR achieved further cost
savings of $4.9 million from the elimination of certain unfilled
positions.
In connection with implementing its restructuring plan, ALR
expects to incur non-recurring cash expenses of up to $3.0 million.
These expenses are expected to include up to $0.4 million of
retention payments, up to $2.0 million of severance, benefits and
transition expenses and up to $0.6 million of other restructuring
expenses. For the three months ended September 30, 2022, ALR
recognized $1.6 million of expenses related to the restructuring
plan, including $0.1 million of retention payments, $1.4 million of
severance, benefits and transition expenses, and $0.1 million of
other restructuring expenses, which was recorded in restructuring
expenses in ALR's condensed consolidated statements of operations.
Additionally, ALR recognized costs of $0.6 million related to the
implementation of the A&M operational review for the three
months ended September 30, 2022, which are recorded in general and
administrative expenses in ALR's condensed consolidated statements
of operations.
Summary of Senior Living Communities and Outpatient
Rehabilitation Locations
Presented below is a summary of the communities, units, average
occupancy, quarter end occupancy, revenues and residential
management fees for the Five Star senior living communities ALR
manages for DHC, as of and for the three months ended September 30,
2022 (dollars in thousands):
Total
Communities
Units
Average Occupancy
Quarter End Occupancy
Community Revenues (1)
Management Fees
Independent and assisted living
communities
120
17,889
75.3%
77.0%
$
171,684
$
9,477
___________________________
(1)
Managed senior living communities'
revenues do not represent ALR's revenues and are included to
provide supplemental information regarding the operating results of
the Five Star senior living communities from which ALR earns
residential management fees.
Presented below is a summary of the Ageility outpatient
rehabilitation locations ALR operated as of and for the three
months ended September 30, 2022 (dollars in thousands):
As of and for the
Three Months Ended September
30, 2022
Number of Locations
Total Revenue (1)(2)
Caseload as a % of occupancy
(3)
EBITDA Margin (4)
Outpatient Locations in DHC Owned
Communities Managed by Five Star
94
$
7,789
25.9
%
(0.2
)%
Outpatient Locations at ALR Owned
Communities
15
868
29.9
%
4.6
%
Outpatient Locations at Other Communities
(5)
94
4,124
21.7
%
(8.3
)%
Total Outpatient Locations
203
$
12,781
24.3
%
(2.5
)%
___________________________
(1)
Excludes revenue of $1,590 earned during
the three months ended September 30, 2022 for ten Ageility
inpatient rehabilitation clinics (inclusive of two inpatient
rehabilitation clinics that were closed during the three months
ended September 30, 2022).
(2)
Total Ageility revenue includes fitness
revenue. Total Ageility revenue excludes home health care services,
which is part of the lifestyle services segment.
(3)
Represents the average number of Ageility
customers divided by average total occupancy at each of the senior
living communities where ALR operates Ageility outpatient
rehabilitation locations. Occupancy is defined as the average total
number of residents residing at the senior living communities.
(4)
EBITDA Margin is a non-GAAP financial
measure and represents rehabilitation locations that are in service
as of September 30, 2022. A reconciliation of EBITDA Margin is
presented later in this press release.
(5)
Other communities includes outpatient
rehabilitation locations at senior living communities not owned or
managed by ALR.
Conference Call Information:
At 1:00 p.m. Eastern Time on November 3, 2022, ALR's President
and Chief Executive Officer, Jeffrey Leer, and Senior Vice
President, Chief Financial Officer and Treasurer, Heather Pereira,
will host a conference call to discuss ALR's third quarter 2022
financial results.
The conference call telephone number is (877) 329-4332.
Participants calling from outside the United States and Canada
should dial (412) 317-5436. No pass code is necessary to access the
call from either number. Participants should dial in about 15
minutes prior to the scheduled start of the call. A replay of the
conference call will be available through 11:59 p.m. Eastern Time
on November 10, 2022. To hear the replay, dial (412) 317-0088. The
replay pass code is 3979235.
A live audio webcast of the conference call will also be
available in a listen-only mode on ALR’s website,
www.alerislife.com. Participants wanting to access the webcast
should visit ALR’s website about five minutes before the call. The
archived webcast will be available for replay on ALR’s website
following the call for about a week. The transcription,
recording and retransmission in any way of ALR's third
quarter ended September 30, 2022 financial results
conference call are strictly prohibited without the
prior written consent of ALR. ALR’s website is not incorporated
as part of this press release.
About AlerisLife:
AlerisLife enriches and inspires the lives of its older adult
customers across the United States by delivering an exceptional and
enhanced resident experience to senior living residents, while also
offering lifestyle services to the younger choice-based consumer.
The Company is headquartered in Newton, Massachusetts. For more
information, visit www.alerislife.com.
AlerisLife Inc.
Condensed Consolidated
Statements of Operations
(amounts in thousands, except
per share amounts)
(unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
REVENUES
Lifestyle services
$
14,546
$
15,382
$
43,330
$
52,388
Residential
17,514
16,320
48,994
49,755
Residential management fees
9,477
11,220
27,380
37,997
Total management and operating
revenues
41,537
42,922
119,704
140,140
Reimbursed community-level costs incurred
on behalf of managed communities
137,768
177,231
396,352
585,662
Other reimbursed expenses
3,354
5,678
10,869
27,750
Total revenues
182,659
225,831
526,925
753,552
Other operating income
2
—
44
7,795
OPERATING EXPENSES
Lifestyle services expenses
14,562
13,536
42,112
45,414
Residential wages and benefits
10,156
8,547
27,942
30,456
Other residential operating expenses
5,804
7,184
18,126
22,418
Community-level costs incurred on behalf
of managed communities
137,768
177,231
396,352
585,662
General and administrative
17,015
21,817
53,205
66,956
Restructuring expenses
1,570
1,220
1,944
16,859
Depreciation and amortization
3,088
2,983
9,535
8,912
Total operating expenses
189,963
232,518
549,216
776,677
Operating loss
(7,302
)
(6,687
)
(22,247
)
(15,330
)
Interest, dividend and other income
225
84
434
244
Interest and other expense
(1,474
)
(507
)
(3,757
)
(1,379
)
Unrealized (loss) gain on equity
investments
(1,997
)
22
(3,679
)
555
Realized gain on sale of debt and equity
investments
1,573
—
1,528
193
Gain (loss) on termination of lease
498
(3,277
)
777
(3,277
)
Loss before income taxes
(8,477
)
(10,365
)
(26,944
)
(18,994
)
(Provision) benefit for income taxes
(31
)
164
(99
)
(194
)
Net loss
$
(8,508
)
$
(10,201
)
$
(27,043
)
$
(19,188
)
Weighted average shares outstanding—basic
and diluted
31,875
31,618
31,825
31,567
Net loss per share—basic and diluted
$
(0.27
)
$
(0.32
)
$
(0.85
)
$
(0.61
)
AlerisLife Inc. Reconciliation of
Non-GAAP Financial Measures (dollars in thousands)
(unaudited)
Non-GAAP financial measures are financial measures that are not
determined in accordance with GAAP. ALR believes the non-GAAP
financial measures presented in the tables below are meaningful
supplemental disclosures because they may help investors better
understand changes in ALR’s operating results and its ability to
meet financial obligations or service debt, make capital
expenditures and expand its business. ALR believes that EBITDA,
Adjusted EBITDA, EBITDA Margin and Net Income (Loss) Margin also
may help investors better understand its financial performance,
including by allowing investors to compare ALR's performance
between periods and against the performance of other companies on
both a GAAP and non-GAAP basis. ALR management uses EBITDA,
Adjusted EBITDA, EBITDA Margin and Net Income (Loss) Margin to
evaluate ALR’s financial performance and compare ALR’s performance
over time and to the performance of other companies. ALR calculates
EBITDA, Adjusted EBITDA, EBITDA Margin and Net Income (Loss) Margin
as shown below or later in this press release. These measures
should not be considered as alternatives to net income (loss) or
operating income (loss), as indicators of ALR’s operating
performance or as measures of ALR’s liquidity. Also, EBITDA,
Adjusted EBITDA, EBITDA Margin and Net Income (Loss) Margin as
presented may not be comparable to similarly titled amounts
calculated by other companies.
ALR believes that net income (loss) is the most directly
comparable financial measure, determined according to GAAP, to
ALR’s presentation of EBITDA and Adjusted EBITDA. The following
table presents the reconciliation of these non-GAAP financial
measures to net income (loss) for the three and nine months ended
September 30, 2022 and 2021.
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Net loss
$
(8,508
)
$
(10,201
)
$
(27,043
)
$
(19,188
)
Add (less):
Interest and other expense
1,474
507
3,757
1,379
Interest, dividend and other income
(225
)
(84
)
(434
)
(244
)
Provision (benefit) for income taxes
31
(164
)
99
194
Depreciation and amortization
3,088
2,983
9,535
8,912
EBITDA
(4,140
)
(6,959
)
(14,086
)
(8,947
)
Add (less):
Separation costs (1)
—
—
1,319
—
Unrealized loss (gain) on equity
investments
1,997
(22
)
3,679
(555
)
(Gain) loss on termination of leases
(498
)
3,277
(777
)
3,277
Transaction costs (2)
574
—
1,278
—
Net restructuring expenses (3)
1,568
407
1,468
4,515
Long-lived asset impairment (4)
—
—
—
890
Adjusted EBITDA
$
(499
)
$
(3,297
)
$
(7,119
)
$
(820
)
___________________________
(1)
Costs incurred for the nine months ended
September 30, 2022 represent those related to the separation of our
former President and Chief Executive Officer during the second
quarter of 2022.
(2)
The three and nine months ended September
30, 2022 includes costs incurred related to the comprehensive
operational review by A&M and are included in general and
administrative expenses in the condensed consolidated statements of
operations.
(3)
The three and nine months ended September
30, 2022 and 2021 includes (i) costs incurred related to the
repositioning of ALR's residential service offerings, which are
reported net of reimbursed expenses received from DHC of $2 and
$476, respectively, for the three and nine months ended September
30, 2022, and $813 and $12,344, respectively, for the three and
nine months ended September 30, 2021, and (ii) costs incurred
related to the restructuring plan executed as a part of A&M's
operational review. All of these costs are included in
restructuring expenses in the condensed consolidated statements of
operations.
(4)
The nine months ended September 30, 2021
represents one previously leased community that had a fire on April
4, 2021.
AlerisLife Inc. Reconciliation of
Non-GAAP Financial Measures (dollars in thousands)
(unaudited)
ALR believes that net income (loss) is the most directly
comparable financial measure, determined according to GAAP, to
ALR’s presentation of EBITDA, Net Income (Loss) Margin and EBITDA
Margin. The following table presents the reconciliation of these
non-GAAP financial measures to net income (loss) for the three
months ended September 30, 2022 for Ageility.
Three Months Ended September
30, 2022
Lifestyle
services:
Revenue
$
14,546
Less: Home health services
175
Less: Inpatient rehabilitation clinics
(1)
1,590
Total Ageility revenue (2)
$
12,781
Ageility:
Net loss
$
(413
)
Add: Depreciation
98
EBITDA
$
(315
)
Net Loss Margin (3)
(3.2
)%
EBITDA Margin (4)
(2.5
)%
___________________________
(1)
Revenue for ten Ageility inpatient
rehabilitation clinics that were operated by Ageility during the
three months ended September 30, 2022 (inclusive of two inpatient
rehabilitation clinics that were closed during the three months
ended September 30, 2022).
(2)
Total Ageility revenue includes revenue
from outpatient rehabilitation locations and fitness.
(3)
Net Loss Margin is defined by ALR as net
loss for the period divided by total revenue for the period.
(4)
EBITDA Margin is defined by ALR as EBITDA
for the period divided by total revenue for the period.
AlerisLife Inc.
Condensed Consolidated Balance
Sheets
(dollars in thousands, except
per share amounts)
(unaudited)
September 30,
December 31,
2022
2021
ASSETS
Current assets:
Cash and cash equivalents
$
79,126
$
66,987
Restricted cash and cash equivalents
21,317
24,970
Accounts receivable, net
9,676
9,244
Due from related person
56,497
41,664
Debt and equity investments, of which
$7,100 and $7,609 are restricted, respectively
10,890
19,535
Prepaid expenses and other current
assets
21,817
24,433
Total current assets
199,323
186,833
Property and equipment, net
162,785
159,843
Operating lease right-of-use assets
5,796
9,197
Finance lease right-of-use assets
2,773
3,467
Restricted cash and cash equivalents
991
982
Restricted debt and equity investments
2,715
3,873
Other long-term assets
8,155
12,082
Total assets
$
382,538
$
376,277
LIABILITIES AND SHAREHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
16,367
$
37,516
Accrued expenses and other current
liabilities
44,861
31,488
Accrued compensation and benefits
33,413
34,295
Accrued self-insurance obligations
26,701
31,739
Operating lease liabilities
501
699
Finance lease liabilities
1,351
872
Due to related persons
2,500
3,879
Current portion of debt
437
419
Total current liabilities
126,131
140,907
Long-term liabilities:
Accrued self-insurance obligations
27,007
34,744
Operating lease liabilities
5,331
9,366
Finance lease liabilities
2,351
3,050
Long-term debt
67,161
6,364
Other long-term liabilities
227
256
Total long-term liabilities
102,077
53,780
Commitments and contingencies
Shareholders’ equity:
Common stock, par value $0.01: 75,000,000
shares authorized, 32,609,009 and 32,662,649 shares issued and
outstanding, respectively
326
327
Additional paid-in-capital
462,144
461,298
Accumulated deficit
(308,107
)
(281,064
)
Accumulated other comprehensive (loss)
income
(33
)
1,029
Total shareholders’ equity
154,330
181,590
Total liabilities and shareholders'
equity
$
382,538
$
376,277
AlerisLife Inc.
Residential Segment
Data
(dollars in thousands, except
per unit amounts)
(unaudited)
Three Months Ended
September 30,
June 30,
March 31,
December 31,
September 30,
2022
2022
2022
2021
2021
Owned and Leased
Senior Living Communities
Revenues
$
17,514
$
16,094
$
15,386
$
14,883
$
16,320
Other operating income (1)
2
—
42
—
—
Operating expenses
20,182
18,861
19,371
18,574
17,895
Operating loss
(2,666
)
(2,767
)
(3,943
)
(3,691
)
(1,575
)
Operating margin
(15.2
)%
(17.2
)%
(25.6
)%
(24.8
)%
(9.7
)%
Number of communities (end of period)
20
20
20
20
20
Number of living units (end of period)
(2)
2,084
2,087
2,100
2,100
2,099
Average occupancy
76.0
%
72.5
%
71.0
%
72.0
%
69.9
%
Quarter end occupancy
78.4
%
75.5
%
72.1
%
72.7
%
72.9
%
RevPAR (3)
$
2,801
$
2,560
$
2,443
$
2,349
$
2,411
RevPOR (4)
$
3,604
$
3,492
$
3,444
$
3,192
$
3,375
Managed Senior
Living Communities (5):
Residential management fees
$
9,477
$
8,971
$
8,932
$
9,482
$
11,220
Community-level revenues
171,684
165,179
162,552
161,907
210,160
Other operating income (1)
125
75
199
602
786
Community-level expenses (6)
164,044
151,906
152,892
159,329
203,756
Community operating income
7,765
13,348
9,859
3,180
7,190
Community operating margin
4.5
%
8.1
%
6.1
%
2.0
%
3.4
%
Number of communities (end of period)
120
120
120
121
159
Number of living units (end of period)
(2)
17,889
17,886
17,899
18,005
20,669
Average occupancy
75.3
%
74.1
%
74.1
%
73.7
%
72.2
%
Quarter end occupancy
77.0
%
75.4
%
74.6
%
74.8
%
73.8
%
RevPAR (3)
$
3,200
$
3,077
$
3,027
$
2,919
$
3,046
RevPOR (4)
$
4,158
$
4,109
$
4,084
$
3,875
$
4,129
___________________________
(1)
Other operating income represents income
recognized for funds received under the CARES Act and other
government grants.
(2)
Includes living units categorized as in
service. As a result, the number of living units may vary from
period to period for reasons other than the acquisition or
disposition of senior living communities.
(3)
RevPAR is defined by ALR as resident fee
revenues for the corresponding portfolio for the period divided by
the average number of available units for the corresponding
portfolio for the period, divided by the number of months in the
period. Data for the three months ended September 30, 2022, June
30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021
exclude income received by senior living communities under the
CARES Act and other government grants.
(4)
RevPOR is defined by ALR as resident fee
revenues for the corresponding portfolio for the period divided by
the average number of occupied units for the corresponding
portfolio for the period, divided by the number of months in the
period. Data for the three months ended September 30, 2022, June
30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021
exclude income received by senior living communities under the
CARES Act and other government grants.
(5)
Managed senior living communities, other
than ALR's residential management fees, represents financial data
of senior living communities managed for DHC and does not represent
financial results of ALR. Managed senior living communities' data
is included to provide supplemental information regarding the
operating results of the senior living communities from which ALR
earns residential management fees.
(6)
The three months ended September 30, 2022,
June 30, 2022, December 31, 2021 and September 30, 2021 includes
restructuring expense of $2, $474, $966, and $813,
respectively.
AlerisLife Inc.
Comparable Communities
Residential Segment Data
(dollars in thousands, except
per unit amounts)
(unaudited)
Three Months Ended
September 30,
June 30,
March 31,
December 31,
September 30,
2022
2022
2022
2021
2021
Owned Senior
Living Communities (1):
Number of communities (end of period)
20
20
20
20
20
Number of living units (end of period)
(2)
2,084
2,087
2,100
2,100
2,099
Average occupancy
76.0
%
72.5
%
71.0
%
72.0
%
70.4
%
Quarter end occupancy
78.4
%
75.5
%
72.1
%
72.7
%
72.9
%
RevPAR (3)
$
2,801
$
2,560
$
2,443
$
2,349
$
2,354
RevPOR (4)
$
3,604
$
3,492
$
3,444
$
3,192
$
3,270
Managed Senior
Living Communities (1)(5):
Number of communities (end of period)
120
120
120
120
120
Number of living units (end of period)
(2)
17,889
17,886
17,899
17,899
17,899
Average occupancy
75.3
%
74.1
%
74.1
%
74.1
%
73.4
%
Quarter end occupancy
77.0
%
75.4
%
74.6
%
75.2
%
74.6
%
RevPAR (3)
$
3,200
$
3,077
$
3,027
$
2,900
$
2,941
RevPOR (4)
$
4,158
$
4,109
$
4,084
$
3,831
$
3,922
___________________________
(1)
Includes data for Five Star senior living
communities that ALR has continuously owned or managed since July
1, 2021. The summary of operations for comparable communities
excludes 59 SNF living units that have been closed in one former
CCRC that Five Star presently manages as an assisted living
community.
(2)
Includes living units categorized as in
service. As a result, the number of living units may vary from
period to period for reasons other than the acquisition or
disposition of senior living communities.
(3)
RevPAR is defined by ALR as resident fee
revenues for the corresponding portfolio for the period divided by
the average number of available units for the corresponding
portfolio for the period, divided by the number of months in the
period. Data for the three months ended September 30, 2022, June
30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021
exclude income received by senior living communities under the
CARES Act and other government grants.
(4)
RevPOR is defined by ALR as resident fee
revenues for the corresponding portfolio for the period divided by
the average number of occupied units for the corresponding
portfolio for the period, divided by the number of months in the
period. Data for the three months ended September 30, 2022, June
30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021
exclude income received by senior living communities under the
CARES Act and other government grants.
(5)
Residential segment data for comparable
managed senior living communities represents financial data of
senior living communities managed for DHC and does not represent
financial results of ALR. Managed senior living communities' data
is included to provide supplemental information regarding the
operating results of the senior living communities from which ALR
earns residential management fees.
AlerisLife Inc.
Lifestyle Services Segment
Data
(dollars in thousands)
(unaudited)
Three Months Ended
September 30,
June 30,
March 31,
December 31,
September 30,
2022
2022
2022
2021
2021
Lifestyle
Services (1):
Revenues
$
14,546
$
14,645
$
14,139
$
15,626
$
15,382
Outpatient
11,837
11,753
11,165
12,848
12,747
Fitness
944
941
881
890
853
Other
1,765
1,951
2,093
1,888
1,782
Operating expenses (2)
14,672
14,438
13,334
14,045
13,348
Operating (loss) income
(126
)
207
805
1,581
2,034
Operating margin (3)
(0.9
)%
1.4
%
5.7
%
10.1
%
13.2
%
Number of inpatient clinics (end of
period)
8
10
10
10
10
Number of outpatient locations (end of
period)
203
202
201
205
223
Number of fitness locations (end of
period)
67
76
73
60
61
___________________________
(1)
Includes Ageility rehabilitation locations
and fitness operations as well as home healthcare operations.
(2)
The three months ended December 31, 2021
and September 30, 2021 includes restructuring expenses of $23 and
$(310), respectively.
(3)
Operating margin is defined as operating
revenue less operating expenses divided by operating revenue in
each period.
AlerisLife Inc.
Comparable Lifestyle Services
Segment Data
(dollars in thousands)
(unaudited)
Three Months Ended
September 30,
June 30,
March 31,
December 31,
September 30,
2022
2022
2022
2021
2021
Lifestyle
Services (1)(2):
Revenues
$
12,183
$
12,057
$
11,533
$
12,892
$
12,823
Outpatient
11,091
10,944
10,520
11,825
11,754
Fitness
917
898
835
832
795
Other
175
215
178
235
274
Operating expenses
12,291
12,095
11,251
11,621
11,563
Operating (loss) income
(108
)
(38
)
282
1,271
1,260
Operating margin (3)
(0.9
)%
(0.3
)%
2.4
%
9.9
%
9.8
%
Number of outpatient locations (end of
period)
185
185
185
185
185
Number of fitness locations (end of
period)
62
73
73
51
57
___________________________
(1)
Includes Ageility outpatient
rehabilitation locations and fitness operations as well as home
healthcare operations that ALR has continuously operated since July
1, 2021.
(2)
Excludes eight Ageility inpatient
rehabilitation clinics.
(3)
Operating margin is defined as operating
revenue less operating expenses divided by operating revenue in
each period.
AlerisLife Inc. Owned Senior Living
Communities as of and for the Three Months Ended September 30,
2022 (dollars in thousands) (unaudited)
No.
Community Name
State
Property Type (1)
Living Units
Residential Revenues
(4)
Gross Carrying Value
Net Carrying Value
Date Acquired
Most Recent Renovation
1
Morningside of Decatur (2)
Alabama
AL
49
$
414
$
7,805
$
4,232
11/19/2004
2021
2
Morningside of Auburn (2)
Alabama
AL
42
415
2,339
1,119
11/19/2004
1997
3
The Palms of Fort Myers (2)
Florida
IL
218
1,965
7,452
3,912
4/1/2002
1988
4
Five Star Residences of Banta Pointe
(3)
Indiana
AL
121
859
12,052
7,235
9/29/2011
2006
5
Five Star Residences of Fort Wayne (2)
Indiana
AL
154
1,000
9,355
5,726
9/29/2011
1998
6
Five Star Residences of Clearwater
Indiana
AL
88
400
15,259
9,780
6/1/2011
1999
7
Five Star Residences of Lafayette
Indiana
AL
109
665
12,406
7,961
6/1/2011
2000
8
Five Star Residences of Noblesville
(2)
Indiana
AL
151
1,232
14,005
8,588
7/1/2011
2005
9
The Villa at Riverwood (2)
Missouri
IL
112
754
5,056
3,231
4/1/2002
1986
10
Voorhees Senior Living (2)
New Jersey
AL
91
909
20,591
13,883
7/1/2008
1999
11
Washington Township Senior Living
New Jersey
AL
93
994
26,586
17,178
7/1/2008
1998
12
Carriage House Senior Living (2)
North Carolina
AL
98
1,075
10,065
5,319
12/1/2008
1997
13
Forest Heights Senior Living (2)
North Carolina
AL
111
875
16,328
10,457
12/1/2008
1998
14
Fox Hollow Senior Living (2)
North Carolina
AL
74
1,253
26,639
17,816
7/1/2000
1999
15
Legacy Heights Senior Living (2)
North Carolina
AL
116
895
7,845
3,641
12/1/2008
1997
16
Morningside at Irving Park (2)
North Carolina
AL
91
869
3,848
1,565
11/19/2004
1997
17
The Devon Senior Living
Pennsylvania
AL
84
566
33,437
14,686
7/1/2008
1985
18
The Legacy of Anderson (2)
South Carolina
IL
101
662
11,840
6,994
12/1/2008
2003
19
Morningside of Springfield (2)
Tennessee
AL
54
565
19,114
11,633
11/19/2004
1984
20
Huntington Place
Wisconsin
AL
127
1,152
2,499
1,502
7/15/2010
1999
Total
2,084
$
17,519
$
264,521
$
156,458
___________________________
(1)
AL is primarily an assisted living
community and IL is primarily an independent living community.
(2)
Encumbered property under ALR's $95,000
Loan.
(3)
Encumbered property under ALR's mortgage
note having an aggregate principal amount outstanding of $6,659 as
of September 30, 2022.
(4)
Excludes funds received under the CARES
Act recognized as other operating income.
Warning Concerning Forward-Looking
Statements
This press release contains statements that constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 and other securities laws.
Also, whenever ALR uses words such as “believe”, “expect”,
“anticipate”, “intend”, “plan”, “estimate”, "will", “may” and
negatives or derivatives of these or similar expressions, ALR is
making forward-looking statements. These forward-looking statements
are based upon ALR’s present intent, beliefs or expectations, but
forward-looking statements are not guaranteed to occur and may not
occur. Actual results may differ materially from those contained in
or implied by ALR’s forward-looking statements. Forward-looking
statements involve known and unknown risks, uncertainties and other
factors, some of which are beyond ALR's control. For example:
- This press release includes statements regarding the
comprehensive operational review performed by A&M and the
restructuring plan ALR has implemented as a result and has begun to
execute. In addition, Mr. Leer notes the recent additions of ALR's
Chief Financial Officer and Chief Operating Officer. ALR may not be
able to successfully execute the restructuring plan on the timing
it expects or at all, the costs to implement the restructuring plan
may be more than it expects and it may not realize the benefits it
anticipates from the restructuring plan.
- Mr. Leer refers to the steady progress ALR has made in
implementing its plan to improve its operating results and drive
efficiencies in its organization throughout the third quarter of
2022, noting improvements in occupancy in both ALR's owned and
managed senior living communities. However, this progress may not
continue and its operating results may not improve and occupancy
could decline as a result of current economic conditions, including
inflation, high interest rates, geopolitical risks and possible
economic recession.
- Mr. Leer states that ALR ended the quarter with sufficient
liquidity to execute on the restructuring plan and that it has no
debt maturities until 2025. However, the costs to implement the
restructuring plan may be more than it anticipates, it may not
generate sufficient cash flow from its operations, and its current
liquidity may prove to be insufficient.
The information contained in ALR’s filings with the Securities
and Exchange Commission, or SEC, including under “Risk Factors” in
ALR’s periodic reports, or incorporated therein, identifies other
important factors that could cause ALR’s actual results to differ
materially from those stated in or implied by ALR’s forward-looking
statements. ALR’s filings with the SEC are available on the SEC’s
website at www.sec.gov.
You should not place undue reliance upon forward-looking
statements.
Except as required by law, ALR does not intend to update or
change any forward-looking statements as a result of new
information, future events or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221102005873/en/
Michael Kodesch, Director, Investor Relations (617) 796-8245
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