Five Star Senior Living Inc. Announces Fourth Quarter 2020 Results
Five Star Senior Living Inc. (Nasdaq: FVE) today announced its financial results for the quarter ended December 31, 2020.
Katherine Potter, President and Chief Executive Officer, made the following statement regarding the fourth quarter 2020 results:
"Five Star took a significant step toward recovery from the impact of COVID-19 on December 19, 2020, when we began hosting vaccination clinics in our communities for eligible residents and team members. As of February 20, 2021, Five Star has hosted vaccination clinics in 249 of our 252 communities, and 25,319 Five Star residents and team members have received at least one dose of a vaccine, which is an average of more than 630 vaccinations per day. By the end of the first quarter, we expect to have completed vaccination clinics at substantially all our communities, including administering second doses to residents and team members.
"Sales leads, which have been an historic leading indicator of move-in activity and a key component in driving occupancy, are 83% higher so far in 2021, when compared with the rolling four-week average sales leads at the beginning of the fourth quarter. We find this encouraging and believe it is a direct result of our efforts to make the vaccine available in our communities and the growing confidence in our ability to provide an exceptional resident experience.
"During the fourth quarter, Five Star continued to generate net income, despite the ongoing impact of COVID-19 on the senior living industry. Our rehabilitation and wellness services segment generated $20.3 million in revenues for the fourth quarter, which is now 38% of our total management and operating revenues, an increase from 33% of our overall management and operating revenue from the previous year pro forma results. Our liquidity remains strong with $84.4 million of unrestricted cash on our balance sheet and no amounts outstanding on our $65.0 million revolving credit facility, and we generated positive Adjusted EBITDA in every quarter of 2020, including during the COVID-19 pandemic."
Fourth Quarter Highlights:
- On December 19, 2020, eligible residents and team members at certain of our communities and clinics started receiving a COVID-19 vaccine. As of February 20, 2021, approximately 249 communities have held a vaccination clinic for the initial dose of a COVID-19 vaccine, and approximately 183 communities have also held a vaccination clinic for the second dose of a COVID-19 vaccine. As a result, as of that date 87.2% of our residents and 42.5% of our team members have received their initial dose of a COVID-19 vaccine and 52.7% of our residents and 26.9% of our team members have received the second dose of a COVID-19 vaccine. We expect our residents and team members will continue to get vaccinated through the first quarter of 2021.
- At December 31, 2020, 89% of our senior living communities were accepting new residents in at least one service line of business (independent living, assisted living, skilled nursing or memory care), which has increased to 98% as of February 20, 2021. Combined senior living revenues and management fees, including those for communities FVE leased from Diversified Healthcare Trust, or DHC, prior to January 1, 2020, and now manages on behalf of DHC, for the fourth quarter of 2020 decreased to $32.7 million from $253.8 million for the same period in 2019, primarily due to the conversion of the formerly leased senior living communities to managed communities as a result of the Restructuring Transactions, as described in the Selected Pro Forma Condensed Consolidated Financial Information and Other Data in the Supplemental Information of this press release. Average occupancy during the fourth quarter of 2020 declined 320 basis points at the communities FVE owns and operates and 300 basis points at the communities FVE manages on behalf of DHC compared to the third quarter of 2020. As of December 31, 2020, occupancy at FVE's owned and leased communities was 69.7%, and was 70.8% at the communities FVE manages on behalf of DHC. FVE continued to experience declines in average monthly senior living revenue per available unit (RevPAR) throughout the fourth quarter due to the continued occupancy challenges resulting from the impact of the COVID-19 pandemic.
- Rehabilitation and wellness services revenues for the fourth quarter of 2020 increased to $20.3 million from $14.0 million for the same period in 2019, primarily due to the impact of $4.6 million of inpatient rehabilitation clinic revenue at communities FVE previously leased from DHC during the fourth quarter of 2019, which was previously eliminated in consolidation accounting prior to the Restructuring Transactions, as well as the impact resulting from the opening of 34 net new outpatient clinics since October 1, 2019. As compared to the fourth quarter of 2019 pro forma results, revenues increased $1.7 million due to the impact of growth in new clinics throughout the fourth quarter of 2019 and 2020.
- Net income for the fourth quarter of 2020 was $2.9 million, or $0.09 per diluted share, compared to net income of $16.1 million, or $3.15 per diluted share for the fourth quarter of 2019, which included $14.9 million of one-time benefits related to the Restructuring Transactions. Net income decreased by $2.9 million, or 50.3%, compared to the fourth quarter of 2019 pro forma net income of $5.8 million, or $0.18 per diluted share. Net income for the fourth quarter of 2020 was impacted by $1.9 million of Provider Relief Funds received and recognized under the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, related to our independent and assisted living communities and rehabilitation and wellness clinics, which continued to experience a reduction of revenues and increased expenses related to decreased occupancy and other impacts of the COVID-19 pandemic.
- Earnings before interest, taxes, depreciation and amortization, or EBITDA, for the fourth quarter of 2020 was $5.8 million compared to $10.6 million for the fourth quarter of 2019 pro forma results. Adjusted EBITDA, as described further below, was $5.2 million for the fourth quarter of 2020 compared to $10.3 million for the fourth quarter of 2019 pro forma results. EBITDA and Adjusted EBITDA are non-GAAP financial measures. Reconciliations of net income determined in accordance with GAAP to EBITDA and Adjusted EBITDA, both actual and pro forma results, for the fourth quarters of 2020 and 2019 are presented later in this press release.
- As of December 31, 2020, FVE had unrestricted cash and cash equivalents of $84.4 million. In addition, FVE had no amounts outstanding on its $65.0 million revolving credit facility.
Conference Call:
At 1:00 p.m. Eastern Time on February 25, 2021, President and Chief Executive Officer, Katherine Potter, Executive Vice President, Chief Financial Officer and Treasurer, Jeffrey Leer, and Executive Vice President and Chief Operating Officer, Margaret Wigglesworth will host a conference call to discuss FVE's fourth quarter 2020 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 March 4, 2021. To hear the replay, dial (412) 317-0088. The replay pass code is 10150786.
A live audio webcast of the conference call will also be available in a listen-only mode on FVE’s website, www.fivestarseniorliving.com. Participants wanting to access the webcast should visit FVE's website about five minutes before the call. The archived webcast will be available for replay on FVE's website following the call for about a week. The transcription, recording and retransmission in any way of FVE’s fourth quarter ended December 31, 2020 financial results conference call are strictly prohibited without the prior written consent of FVE. FVE’s website is not incorporated as part of this press release.
About Five Star Senior Living Inc.:
FVE is a senior living and rehabilitation and wellness services company. As of December 31, 2020, FVE operated 252 senior living communities (29,271 living units) located in 31 states, including 228 communities (26,969 living units) that it managed and 24 communities (2,302 living units) that it owned or leased. FVE operates communities that include independent living, assisted living, memory care, continuing care retirement communities and skilled nursing facilities. Additionally, FVE's rehabilitation and wellness services segment includes Ageility Physical Therapy SolutionsTM, or Ageility, a division of FVE, which provides rehabilitation and wellness services within FVE communities as well as to external customers. As of December 31, 2020, Ageility operated 207 outpatient rehabilitation clinics and 37 inpatient rehabilitation clinics in 28 states. FVE is headquartered in Newton, Massachusetts.
|
Five Star Senior Living Inc. |
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Condensed Consolidated Statements of Operations |
||||||||||||||||
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(amounts in thousands, except per share amounts) |
||||||||||||||||
|
(unaudited) |
||||||||||||||||
|
|
|
|
|
|
||||||||||||
|
|
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
|
REVENUES |
|
|
|
|
|
|
|
|
||||||||
|
Senior living |
|
$ |
17,903 |
|
|
$ |
249,727 |
|
|
$ |
77,015 |
|
|
$ |
1,036,498 |
|
|
Management fees |
|
14,822 |
|
|
4,109 |
|
|
62,880 |
|
|
16,169 |
|
||||
|
Rehabilitation and wellness services |
|
20,256 |
|
|
13,978 |
|
|
82,032 |
|
|
48,685 |
|
||||
|
Total management and operating revenues |
|
52,981 |
|
|
267,814 |
|
|
221,927 |
|
|
1,101,352 |
|
||||
|
Reimbursed community-level costs incurred on behalf of managed communities |
|
226,264 |
|
|
81,059 |
|
|
916,167 |
|
|
313,792 |
|
||||
|
Other reimbursed expenses |
|
6,645 |
|
|
— |
|
|
25,648 |
|
|
— |
|
||||
|
Total revenues |
|
285,890 |
|
|
348,873 |
|
|
1,163,742 |
|
|
1,415,144 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Other operating income |
|
1,936 |
|
|
— |
|
|
3,435 |
|
|
— |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
||||||||
|
Senior living wages and benefits |
|
11,186 |
|
|
127,378 |
|
|
41,819 |
|
|
538,931 |
|
||||
|
Other senior living operating expenses |
|
7,180 |
|
|
68,748 |
|
|
25,470 |
|
|
292,644 |
|
||||
|
Rehabilitation and wellness services expenses |
|
15,901 |
|
|
11,872 |
|
|
64,496 |
|
|
39,903 |
|
||||
|
Community-level costs incurred on behalf of managed communities |
|
226,264 |
|
|
81,059 |
|
|
916,167 |
|
|
313,792 |
|
||||
|
General and administrative |
|
20,820 |
|
|
20,740 |
|
|
87,168 |
|
|
87,884 |
|
||||
|
Rent |
|
1,281 |
|
|
20,513 |
|
|
5,118 |
|
|
141,486 |
|
||||
|
Depreciation and amortization |
|
2,913 |
|
|
2,716 |
|
|
10,997 |
|
|
16,640 |
|
||||
|
Loss on sale of senior living communities |
|
— |
|
|
6 |
|
|
— |
|
|
856 |
|
||||
|
Long-lived asset impairment |
|
— |
|
|
4 |
|
|
— |
|
|
3,282 |
|
||||
|
Total operating expenses |
|
285,545 |
|
|
333,036 |
|
|
1,151,235 |
|
|
1,435,418 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Operating income (loss) |
|
2,281 |
|
|
15,837 |
|
|
15,942 |
|
|
(20,274 |
) |
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Interest, dividend and other income |
|
132 |
|
|
379 |
|
|
757 |
|
|
1,364 |
|
||||
|
Interest and other expense |
|
(461 |
) |
|
(419 |
) |
|
(1,631 |
) |
|
(2,615 |
) |
||||
|
Unrealized gain on equity investments |
|
640 |
|
|
306 |
|
|
480 |
|
|
782 |
|
||||
|
Realized gain on sale of debt and equity investments |
|
3 |
|
|
2 |
|
|
425 |
|
|
229 |
|
||||
|
Loss on termination of leases |
|
— |
|
|
— |
|
|
(22,899 |
) |
|
— |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Income (loss) before income taxes and (loss) equity in earnings of an investee |
|
2,595 |
|
|
16,105 |
|
|
(6,926 |
) |
|
(20,514 |
) |
||||
|
Benefit (provision) for income taxes |
|
308 |
|
|
42 |
|
|
(663 |
) |
|
(56 |
) |
||||
|
(Loss) equity in earnings of an investee |
|
— |
|
|
(42 |
) |
|
— |
|
|
575 |
|
||||
|
Net income (loss) |
|
$ |
2,903 |
|
|
$ |
16,105 |
|
|
$ |
(7,589 |
) |
|
$ |
(19,995 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted average shares outstanding—basic |
|
31,495 |
|
|
5,002 |
|
|
31,471 |
|
|
5,006 |
|
||||
|
Weighted average shares outstanding—diluted |
|
31,612 |
|
|
5,119 |
|
|
31,471 |
|
|
5,006 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net income (loss) per share—basic |
|
$ |
0.09 |
|
|
$ |
3.22 |
|
|
$ |
(0.24 |
) |
|
$ |
(3.99 |
) |
|
Net income (loss) per share—diluted |
|
$ |
0.09 |
|
|
$ |
3.15 |
|
|
$ |
(0.24 |
) |
|
$ |
(3.99 |
) |
|
Five Star Senior Living 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 U.S. generally accepted accounting principles, or GAAP. FVE believes the non-GAAP financial measures presented in the table below are meaningful supplemental disclosures because they may help investors better understand changes in FVE’s operating results and its ability to meet FVE's financial obligations or service debt, make capital expenditures and expand its business. These non-GAAP financial measures may also help investors make comparisons between FVE and other companies on both a GAAP and non-GAAP basis. FVE believes that EBITDA and Adjusted EBITDA are meaningful financial measures that may help investors better understand its financial performance, including by allowing investors to compare FVE's performance between periods and to the performance of other companies. FVE management uses EBITDA and Adjusted EBITDA to evaluate FVE’s financial performance and compare FVE’s performance over time and to the performance of other companies. FVE calculates EBITDA and Adjusted EBITDA as shown below. These measures should not be considered as alternatives to net income (loss) or operating income (loss), as indicators of FVE’s operating performance or as measures of FVE’s liquidity. Also, EBITDA and Adjusted EBITDA as presented may not be comparable to similarly titled amounts calculated by other companies. |
| |
|
FVE believes that net income (loss) is the most directly comparable financial measure, determined according to GAAP, to FVE’s presentation of EBITDA and Adjusted EBITDA. The following table presents the reconciliation of these non-GAAP financial measures from net income (loss) for each of the three months and years ended December 31, 2020 and 2019. |
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
|
Net income (loss) |
|
$ |
2,903 |
|
|
$ |
16,105 |
|
|
$ |
(7,589 |
) |
|
$ |
(19,995 |
) |
|
Add (less): |
|
|
|
|
|
|
|
|
||||||||
|
Interest and other expense |
|
461 |
|
|
419 |
|
|
1,631 |
|
|
2,615 |
|
||||
|
Interest, dividend and other income |
|
(132 |
) |
|
(379 |
) |
|
(757 |
) |
|
(1,364 |
) |
||||
|
(Benefit) provision for income taxes |
|
(308 |
) |
|
(42 |
) |
|
663 |
|
|
56 |
|
||||
|
Depreciation and amortization |
|
2,913 |
|
|
2,716 |
|
|
10,997 |
|
|
16,640 |
|
||||
|
EBITDA |
|
5,837 |
|
|
18,819 |
|
|
4,945 |
|
|
(2,048 |
) |
||||
|
Add (less): |
|
|
|
|
|
|
|
|
||||||||
|
Long-lived asset impairment |
|
— |
|
|
4 |
|
|
— |
|
|
3,282 |
|
||||
|
Loss on sale of senior living communities |
|
— |
|
|
6 |
|
|
— |
|
|
856 |
|
||||
|
Severance (1) |
|
— |
|
|
— |
|
|
282 |
|
|
393 |
|
||||
|
Litigation settlement (2) |
|
— |
|
|
— |
|
|
2,473 |
|
|
— |
|
||||
|
Unrealized gain on equity investments |
|
(640 |
) |
|
(306 |
) |
|
(480 |
) |
|
(782 |
) |
||||
|
Loss on termination of leases (3) |
|
— |
|
|
— |
|
|
22,899 |
|
|
— |
|
||||
|
Transaction costs (4) |
|
36 |
|
|
1,814 |
|
|
1,448 |
|
|
11,952 |
|
||||
|
Lease inducement (5) |
|
— |
|
|
(12,423 |
) |
|
— |
|
|
(12,423 |
) |
||||
|
Deferred resident fees and deposits (6) |
|
— |
|
|
(4,242 |
) |
|
— |
|
|
(4,242 |
) |
||||
|
Adjusted EBITDA |
|
$ |
5,233 |
|
|
$ |
3,672 |
|
|
$ |
31,567 |
|
|
$ |
(3,012 |
) |
|
(1) |
Costs incurred in 2019 represent those related to the retirement or separation of former executives of FVE. Costs incurred during 2020 represent those related to a reduction in workforce as a result of the impact of the COVID-19 pandemic. |
|
(2) |
Represents costs incurred related to the settlement of a lawsuit and is included in other senior living operating expenses in our condensed consolidated statements of operations. The settlement was approved by the court, and FVE is awaiting the court's entry of a final judgment on record. Payment is expected to be made in the first half of 2021. |
|
(3) |
Represents the excess of the fair value of the Share Issuances of $97,899 compared to the consideration of $75,000 paid by DHC, as described in the Selected Pro Forma Condensed Consolidated Financial Information and Other Data in the Supplemental Information of this press release. |
|
(4) |
Includes costs incurred related to the Restructuring Transactions as described in the Selected Pro Forma Condensed Consolidated Financial Information and Other Data in the Supplemental Information of this press release. |
|
(5) |
Lease inducement related to the rent reduction recognized for the applicable period in 2019 as a result of the completion of the Restructuring Transactions. |
|
(6) |
Deferred resident fees and deposits recognized related to senior living communities FVE previously leased from, and now manages, for the account of DHC, as a result of those leases being terminated in connection with the Restructuring Transactions. |
|
Five Star Senior Living Inc. |
||||||||
|
Condensed Consolidated Balance Sheets |
||||||||
|
(dollars in thousands, except per share amounts) |
||||||||
|
(unaudited) |
||||||||
|
|
|
|
||||||
|
|
|
December 31, |
||||||
|
|
|
2020 |
|
2019 |
||||
|
ASSETS |
|
|
|
|
||||
|
Current assets: |
|
|
|
|
||||
|
Cash and cash equivalents |
|
$ |
84,351 |
|
|
$ |
31,740 |
|
|
Restricted cash and cash equivalents |
|
23,877 |
|
|
23,995 |
|
||
|
Accounts receivable, net of allowance |
|
9,104 |
|
|
34,190 |
|
||
|
Due from related person |
|
96,357 |
|
|
5,533 |
|
||
|
Debt and equity investments |
|
19,961 |
|
|
21,070 |
|
||
|
Prepaid expenses and other current assets |
|
28,658 |
|
|
17,286 |
|
||
|
Assets held for sale |
|
— |
|
|
9,554 |
|
||
|
Total current assets |
|
262,308 |
|
|
143,368 |
|
||
|
|
|
|
|
|
||||
|
Property and equipment, net |
|
159,251 |
|
|
167,247 |
|
||
|
Operating lease right-of-use assets |
|
18,030 |
|
|
20,855 |
|
||
|
Finance lease right-of-use assets |
|
4,493 |
|
|
— |
|
||
|
Restricted cash and cash equivalents |
|
1,369 |
|
|
1,244 |
|
||
|
Restricted debt and equity investments |
|
4,788 |
|
|
7,105 |
|
||
|
Equity investment of an investee, net |
|
11 |
|
|
298 |
|
||
|
Other long-term assets |
|
3,956 |
|
|
5,676 |
|
||
|
Total assets |
|
$ |
454,206 |
|
|
$ |
345,793 |
|
|
|
|
|
|
|
||||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
||||
|
Current liabilities: |
|
|
|
|
||||
|
Accounts payable |
|
$ |
23,454 |
|
|
$ |
30,440 |
|
|
Accrued expenses and other current liabilities |
|
41,843 |
|
|
55,981 |
|
||
|
Accrued compensation and benefits |
|
70,543 |
|
|
35,629 |
|
||
|
Accrued self-insurance obligations |
|
31,355 |
|
|
23,791 |
|
||
|
Operating lease liabilities |
|
2,567 |
|
|
2,872 |
|
||
|
Finance lease liabilities |
|
808 |
|
|
— |
|
||
|
Due to related persons |
|
6,585 |
|
|
2,247 |
|
||
|
Mortgage note payable |
|
388 |
|
|
362 |
|
||
|
Security deposits and current portion of continuing care contracts |
|
365 |
|
|
434 |
|
||
|
Liabilities held for sale |
|
— |
|
|
12,544 |
|
||
|
Total current liabilities |
|
177,908 |
|
|
164,300 |
|
||
|
|
|
|
|
|
||||
|
Long-term liabilities: |
|
|
|
|
||||
|
Accrued self-insurance obligations |
|
37,420 |
|
|
33,872 |
|
||
|
Operating lease liabilities |
|
17,104 |
|
|
19,671 |
|
||
|
Finance lease liabilities |
|
3,921 |
|
|
— |
|
||
|
Mortgage note payable |
|
6,783 |
|
|
7,171 |
|
||
|
Other long-term liabilities |
|
538 |
|
|
798 |
|
||
|
Total long term liabilities |
|
65,766 |
|
|
61,512 |
|
||
|
|
|
|
|
|
||||
|
Shareholders’ equity: |
|
|
|
|
||||
|
Common stock, par value $0.01 |
|
317 |
|
|
52 |
|
||
|
Additional paid-in-capital |
|
460,038 |
|
|
362,450 |
|
||
|
Accumulated deficit |
|
(251,139 |
) |
|
(245,184 |
) |
||
|
Accumulated other comprehensive income |
|
1,316 |
|
|
2,663 |
|
||
|
Total shareholders’ equity |
|
210,532 |
|
|
119,981 |
|
||
|
Total liabilities and shareholders' equity |
|
$ |
454,206 |
|
|
$ |
345,793 |
|
|
Five Star Senior Living Inc. |
||||||||||||||||
|
Supplemental Financial Data |
||||||||||||||||
|
(dollars in thousands) |
||||||||||||||||
|
(unaudited) |
||||||||||||||||
|
Management and Operating Revenues by Product Type |
||||||||||||||||
|
|
Three Months Ended December 31, 2020 |
|||||||||||||||
|
Management and Operating Revenues by Product Type: |
Senior |
|
Management |
|
Rehabilitation |
|
Total |
|||||||||
|
Independent and assisted living community revenues |
$ |
17,903 |
|
|
$ |
8,515 |
|
|
$ |
— |
|
|
$ |
26,418 |
|
|
|
Continuing care retirement community revenues |
— |
|
|
5,272 |
|
|
— |
|
|
5,272 |
|
|||||
|
Skilled nursing facility revenues |
— |
|
|
1,035 |
|
|
— |
|
|
1,035 |
|
|||||
|
Rehabilitation and wellness services revenues |
— |
|
|
— |
|
|
20,256 |
|
|
20,256 |
|
|||||
|
Total management and operating revenues |
$ |
17,903 |
|
|
$ |
14,822 |
|
|
$ |
20,256 |
|
|
$ |
52,981 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Three Months Ended December 31, 2019 |
|||||||||||||||
|
Management and Operating Revenues by Product Type: |
Senior |
|
Management |
|
Rehabilitation |
|
Total |
|||||||||
|
Independent and assisted living community revenues |
$ |
128,061 |
|
|
$ |
3,221 |
|
|
$ |
— |
|
|
$ |
131,282 |
|
|
|
Continuing care retirement community revenues |
99,069 |
|
|
888 |
|
|
— |
|
|
99,957 |
|
|||||
|
Skilled nursing facility revenues |
22,597 |
|
|
— |
|
|
— |
|
|
22,597 |
|
|||||
|
Rehabilitation and wellness services revenues |
— |
|
|
— |
|
|
13,978 |
|
|
13,978 |
|
|||||
|
Total management and operating revenues |
$ |
249,727 |
|
|
$ |
4,109 |
|
|
$ |
13,978 |
|
|
$ |
267,814 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Year Ended December 31, 2020 |
|||||||||||||||
|
Management and Operating Revenues by Product Type: |
Senior |
|
Management |
|
Rehabilitation |
|
Total |
|||||||||
|
Independent and assisted living community revenues |
$ |
77,015 |
|
|
$ |
35,917 |
|
|
$ |
— |
|
|
$ |
112,932 |
|
|
|
Continuing care retirement community revenues |
— |
|
|
22,545 |
|
|
— |
|
|
22,545 |
|
|||||
|
Skilled nursing facility revenues |
— |
|
|
4,418 |
|
|
— |
|
|
4,418 |
|
|||||
|
Rehabilitation and wellness services revenues |
— |
|
|
— |
|
|
82,032 |
|
|
82,032 |
|
|||||
|
Total management and operating revenues |
$ |
77,015 |
|
|
$ |
62,880 |
|
|
$ |
82,032 |
|
|
$ |
221,927 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Year Ended December 31, 2019 |
|||||||||||||||
|
Management and Operating Revenues by Product Type: |
Senior |
|
Management |
|
Rehabilitation |
|
Total |
|||||||||
|
Independent and assisted living community revenues |
$ |
508,800 |
|
|
$ |
12,704 |
|
|
$ |
— |
|
|
$ |
521,504 |
|
|
|
Continuing care retirement community revenues |
389,496 |
|
|
3,465 |
|
|
— |
|
|
392,961 |
|
|||||
|
Skilled nursing facility revenues |
138,202 |
|
|
— |
|
|
— |
|
|
138,202 |
|
|||||
|
Rehabilitation and wellness services revenues |
— |
|
|
— |
|
|
48,685 |
|
|
48,685 |
|
|||||
|
Total management and operating revenues |
$ |
1,036,498 |
|
|
$ |
16,169 |
|
|
$ |
48,685 |
|
|
$ |
1,101,352 |
|
|
|
Five Star Senior Living Inc. |
||||||||||||||||
|
Supplemental Financial Data |
||||||||||||||||
|
(dollars in thousands) |
||||||||||||||||
|
(unaudited) |
||||||||||||||||
|
|
|
|
||||||||||||||
|
Comparable Management and Operating Revenues by Product Type (1) |
||||||||||||||||
|
|
|
|
||||||||||||||
|
|
|
Three Months Ended December 31, 2020 |
||||||||||||||
|
Management and Operating Revenues by Product Type: |
Senior |
|
Management |
|
Rehabilitation |
|
Total |
|||||||||
|
Independent and assisted living community revenues |
$ |
17,957 |
|
|
$ |
3,705 |
|
|
$ |
— |
|
|
$ |
21,662 |
|
|
|
Continuing care retirement community revenues |
— |
|
|
1,111 |
|
|
— |
|
|
1,111 |
|
|||||
|
Rehabilitation and wellness services revenues |
— |
|
|
— |
|
|
17,823 |
|
|
17,823 |
|
|||||
|
Total management and operating revenues |
$ |
17,957 |
|
|
$ |
4,816 |
|
|
$ |
17,823 |
|
|
$ |
40,596 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Three Months Ended December 31, 2019 |
|||||||||||||||
|
Management and Operating Revenues by Product Type: |
Senior |
|
Management |
|
Rehabilitation |
|
Total |
|||||||||
|
Independent and assisted living community revenues |
$ |
20,410 |
|
|
$ |
3,158 |
|
|
$ |
— |
|
|
$ |
23,568 |
|
|
|
Continuing care retirement community revenues |
— |
|
|
772 |
|
|
— |
|
|
772 |
|
|||||
|
Rehabilitation and wellness services revenues |
— |
|
|
— |
|
|
12,948 |
|
|
12,948 |
|
|||||
|
Total management and operating revenues |
$ |
20,410 |
|
|
$ |
3,930 |
|
|
$ |
12,948 |
|
|
$ |
37,288 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Year Ended December 31, 2020 |
|||||||||||||||
|
Management and Operating Revenues by Product Type: |
Senior |
|
Management |
|
Rehabilitation |
|
Total |
|||||||||
|
Independent and assisted living community revenues |
$ |
76,293 |
|
|
$ |
15,119 |
|
|
$ |
— |
|
|
$ |
91,412 |
|
|
|
Continuing care retirement community revenues |
— |
|
|
4,417 |
|
|
— |
|
|
4,417 |
|
|||||
|
Rehabilitation and wellness services revenues |
— |
|
|
— |
|
|
60,048 |
|
|
60,048 |
|
|||||
|
Total management and operating revenues |
$ |
76,293 |
|
|
$ |
19,536 |
|
|
$ |
60,048 |
|
|
$ |
155,877 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Year Ended December 31, 2019 |
|||||||||||||||
|
Management and Operating Revenues by Product Type: |
Senior |
|
Management |
|
Rehabilitation |
|
Total |
|||||||||
|
Independent and assisted living community revenues |
$ |
82,154 |
|
|
$ |
12,098 |
|
|
$ |
— |
|
|
$ |
94,252 |
|
|
|
Continuing care retirement community revenues |
— |
|
|
2,993 |
|
|
— |
|
|
2,993 |
|
|||||
|
Rehabilitation and wellness services revenues |
— |
|
|
— |
|
|
41,064 |
|
|
41,064 |
|
|||||
|
Total management and operating revenues |
$ |
82,154 |
|
|
$ |
15,091 |
|
|
$ |
41,064 |
|
|
$ |
138,309 |
|
|
|
(1) |
The tables for the three months ended December 31, 2020 and 2019 include data for 24 owned and leased senior living communities, 75 managed senior living communities and 203 rehabilitation clinics that FVE has continuously owned, continuously leased or continuously managed since October 1, 2019. The tables for the years ended December 31, 2020 and 2019 include data for 24 owned and leased senior living communities, 74 managed senior living communities and 158 rehabilitation clinics that FVE has continuously owned, continuously leased or continuously managed since January 1, 2019. |
|
Five Star Senior Living Inc. |
||||||||||||||||||||
|
Senior Living Segment Data |
||||||||||||||||||||
|
(dollars in thousands, except per unit amounts) |
||||||||||||||||||||
|
(unaudited) |
||||||||||||||||||||
|
|
|
|
||||||||||||||||||
|
|
|
Three Months Ended |
||||||||||||||||||
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
||||||||||
|
|
|
2020 |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Owned and Leased Communities |
|
|
|
|
|
|
|
|
|
|||||||||||
|
Independent and assisted living communities: |
|
|
|
|
|
|
|
|
|
|||||||||||
|
Revenues |
$ |
17,903 |
|
|
$ |
18,525 |
|
|
$ |
19,590 |
|
|
$ |
20,997 |
|
|
$ |
249,727 |
|
|
|
Other operating income (1) |
1,715 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||||
|
Operating expenses |
21,181 |
|
|
19,661 |
|
|
20,165 |
|
|
17,470 |
|
|
220,390 |
|
||||||
|
Operating (loss) income |
(1,563 |
) |
|
(1,136 |
) |
|
(575 |
) |
|
3,527 |
|
|
29,337 |
|
||||||
|
Operating margin |
(8.0 |
)% |
|
(6.1 |
)% |
|
(2.9 |
)% |
|
16.8 |
% |
|
11.7 |
% |
||||||
|
Number of communities (end of period) |
24 |
|
|
24 |
|
|
24 |
|
|
24 |
|
|
190 |
|
||||||
|
Number of living units (end of period) (2) |
2,302 |
|
|
2,312 |
|
|
2,312 |
|
|
2,312 |
|
|
20,948 |
|
||||||
|
Average occupancy |
71.5 |
% |
|
74.7 |
% |
|
78.3 |
% |
|
81.3 |
% |
|
82.9 |
% |
||||||
|
Spot occupancy |
69.7 |
% |
|
73.0 |
% |
|
76.3 |
% |
|
80.3 |
% |
|
82.7 |
% |
||||||
|
RevPAR (3) |
$ |
2,596 |
|
|
$ |
2,665 |
|
|
$ |
2,813 |
|
|
$ |
2,930 |
|
|
$ |
3,974 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Managed Communities (4) |
|
|
|
|
|
|
|
|
|
|||||||||||
|
Independent and assisted living communities: |
|
|
|
|
|
|
|
|
|
|||||||||||
|
Management fees |
$ |
8,515 |
|
|
$ |
8,751 |
|
|
$ |
9,088 |
|
|
$ |
9,563 |
|
|
$ |
3,221 |
|
|
|
Community-level revenues |
157,267 |
|
|
167,436 |
|
|
174,634 |
|
|
185,516 |
|
|
81,188 |
|
||||||
|
Other operating income (1) |
1,677 |
|
|
— |
|
|
14 |
|
|
— |
|
|
— |
|
||||||
|
Community-level expenses |
139,623 |
|
|
145,399 |
|
|
139,175 |
|
|
143,608 |
|
|
65,899 |
|
||||||
|
Community operating income |
19,321 |
|
|
22,037 |
|
|
35,473 |
|
|
41,908 |
|
|
15,289 |
|
||||||
|
Community operating margin |
12.2 |
% |
|
13.2 |
% |
|
20.3 |
% |
|
22.6 |
% |
|
18.8 |
% |
||||||
|
Number of communities (end of period) (5) |
182 |
|
|
189 |
|
|
191 |
|
|
193 |
|
|
69 |
|
||||||
|
Number of living units (end of period) (2)(5) |
17,440 |
|
|
18,032 |
|
|
18,148 |
|
|
18,395 |
|
|
8,106 |
|
||||||
|
Average occupancy |
72.5 |
% |
|
75.5 |
% |
|
79.1 |
% |
|
82.9 |
% |
|
84.0 |
% |
||||||
|
Spot occupancy |
71.1 |
% |
|
74.1 |
% |
|
77.7 |
% |
|
82.2 |
% |
|
83.4 |
% |
||||||
|
RevPAR (3) |
$ |
2,969 |
|
|
$ |
3,088 |
|
|
$ |
3,207 |
|
|
$ |
3,360 |
|
|
$ |
3,401 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Continuing care retirement communities: |
|
|
|
|
|
|
|
|
|
|||||||||||
|
Management fees |
$ |
5,272 |
|
|
$ |
5,451 |
|
|
$ |
5,485 |
|
|
$ |
6,337 |
|
|
$ |
888 |
|
|
|
Community-level revenues |
100,781 |
|
|
100,765 |
|
|
106,937 |
|
|
123,498 |
|
|
27,502 |
|
||||||
|
Other operating income (1) |
7,997 |
|
|
— |
|
|
3,792 |
|
|
— |
|
|
— |
|
||||||
|
Community-level expenses |
98,221 |
|
|
102,103 |
|
|
99,071 |
|
|
103,946 |
|
|
24,998 |
|
||||||
|
Community operating income |
10,557 |
|
|
(1,338 |
) |
|
11,658 |
|
|
19,552 |
|
|
2,504 |
|
||||||
|
Community operating margin |
9.7 |
% |
|
(1.3 |
)% |
|
10.5 |
% |
|
15.8 |
% |
|
9.1 |
% |
||||||
|
Number of communities (end of period) |
37 |
|
|
39 |
|
|
39 |
|
|
40 |
|
|
9 |
|
||||||
|
Number of living units (end of period) (2)(6) |
8,574 |
|
|
8,936 |
|
|
8,936 |
|
|
9,301 |
|
|
2,231 |
|
||||||
|
Average occupancy |
72.8 |
% |
|
75.6 |
% |
|
79.1 |
% |
|
83.4 |
% |
|
83.5 |
% |
||||||
|
Spot occupancy |
71.2 |
% |
|
74.4 |
% |
|
78.3 |
% |
|
81.3 |
% |
|
83.6 |
% |
||||||
|
RevPAR (3) |
$ |
3,813 |
|
|
$ |
3,759 |
|
|
$ |
3,989 |
|
|
$ |
4,426 |
|
|
$ |
4,109 |
|
|
|
Skilled nursing facilities (7): |
|
|
|
|
|
|
|
|
|
|||||||||||
|
Management fees |
$ |
1,035 |
|
|
$ |
1,100 |
|
|
$ |
1,132 |
|
|
$ |
1,151 |
|
|
$ |
— |
|
|
|
Community-level revenues |
20,589 |
|
|
21,900 |
|
|
22,532 |
|
|
22,956 |
|
|
— |
|
||||||
|
Other operating income (1) |
2,846 |
|
|
— |
|
|
2,022 |
|
|
— |
|
|
— |
|
||||||
|
Community-level expenses |
23,834 |
|
|
22,831 |
|
|
22,009 |
|
|
21,854 |
|
|
— |
|
||||||
|
Community operating (loss) income |
(399 |
) |
|
(931 |
) |
|
2,545 |
|
|
1,102 |
|
|
— |
|
||||||
|
Community operating margin |
(1.7 |
)% |
|
(4.3 |
)% |
|
10.4 |
% |
|
4.8 |
% |
|
— |
% |
||||||
|
Number of communities (end of period) |
9 |
|
|
11 |
|
|
11 |
|
|
11 |
|
|
— |
|
||||||
|
Number of living units (end of period) (2)(8) |
955 |
|
|
1,264 |
|
|
1,264 |
|
|
1,264 |
|
|
— |
|
||||||
|
Average occupancy |
64.2 |
% |
|
68.8 |
% |
|
70.1 |
% |
|
73.3 |
% |
|
— |
% |
||||||
|
Spot occupancy |
60.3 |
% |
|
69.2 |
% |
|
68.5 |
% |
|
72.6 |
% |
|
— |
% |
||||||
|
RevPAR (3) |
$ |
5,655 |
|
|
$ |
5,775 |
|
|
$ |
5,942 |
|
|
$ |
6,054 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total managed communities: |
|
|
|
|
|
|
|
|
|
|||||||||||
|
Management fees |
$ |
14,822 |
|
|
$ |
15,302 |
|
|
$ |
15,705 |
|
|
$ |
17,051 |
|
|
$ |
4,109 |
|
|
|
Community-level revenues |
278,637 |
|
|
290,101 |
|
|
304,103 |
|
|
331,970 |
|
|
108,690 |
|
||||||
|
Other operating income (1) |
12,520 |
|
|
— |
|
|
5,828 |
|
|
— |
|
|
— |
|
||||||
|
Community-level expenses |
261,678 |
|
|
270,333 |
|
|
260,255 |
|
|
269,408 |
|
|
90,897 |
|
||||||
|
Community operating income |
29,479 |
|
|
19,768 |
|
|
49,676 |
|
|
62,562 |
|
|
17,793 |
|
||||||
|
Community operating margin |
10.1 |
% |
|
6.8 |
% |
|
16.0 |
% |
|
18.8 |
% |
|
16.4 |
% |
||||||
|
Number of communities (end of period) |
228 |
|
|
239 |
|
|
241 |
|
|
244 |
|
|
78 |
|
||||||
|
Number of living units (end of period) (2) |
26,969 |
|
|
28,232 |
|
|
28,348 |
|
|
28,960 |
|
|
10,337 |
|
||||||
|
Average occupancy |
72.2 |
% |
|
75.2 |
% |
|
78.7 |
% |
|
82.6 |
% |
|
83.9 |
% |
||||||
|
Spot occupancy |
70.8 |
% |
|
74.0 |
% |
|
77.5 |
% |
|
81.5 |
% |
|
83.5 |
% |
||||||
|
RevPAR (3) |
$ |
3,355 |
|
|
$ |
3,420 |
|
|
$ |
3,576 |
|
|
$ |
3,820 |
|
|
$ |
3,556 |
|
|
|
(1) |
Other operating income represents income recognized for funds received under the Provider Relief Fund of the CARES Act and other governmental 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 FVE as resident fee revenues for the corresponding portfolio for the period divided by the average number of available units for the period, divided by the number of months in the period. Data for the three months ended June 30, 2020 and December 31, 2020 exclude income received by communities under the CARES Act and other governmental grants. Data for the three months ended December 31, 2019, excludes approximately $4,200 of deferred resident fees and deposits recognized related to senior living communities FVE previously leased from, and now manages, for the account of DHC, as a result of those leases being terminated in connection with the Restructuring Transactions. |
|
(4) |
Managed communities, other than FVE's management fees, represents financial data of communities FVE manages for the account of DHC and does not represent financial results of FVE. Managed communities' data is included to provide supplemental information regarding the operating results and financial condition of the communities from which FVE earns management fees. |
|
(5) |
Includes one active adult community with 167 units. |
|
(6) |
Includes 2,055 skilled nursing units in communities where assisted living and independent living services are the predominant services provided. |
|
(7) |
FVE did not manage skilled nursing facilities prior to January 1, 2020. |
|
(8) |
Includes 53 assisted living and independent living units in communities where skilled nursing services are the predominant services provided. |
|
Five Star Senior Living Inc. |
||||||||||||||||||||
|
Comparable Communities Senior Living Segment Data |
||||||||||||||||||||
|
(dollars in thousands, except per unit amounts) |
||||||||||||||||||||
|
(unaudited) |
||||||||||||||||||||
|
|
|
|
||||||||||||||||||
|
|
|
Three Months Ended |
||||||||||||||||||
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
||||||||||
|
|
|
2020 |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
||||||||||
|
Owned and Leased Communities (1): |
|
|
|
|
|
|
|
|
|
|||||||||||
|
Number of communities (end of period) |
24 |
|
|
24 |
|
|
24 |
|
|
24 |
|
|
24 |
|
||||||
|
Number of living units (end of period) (2) |
2,302 |
|
|
2,312 |
|
|
2,312 |
|
|
2,312 |
|
|
2,312 |
|
||||||
|
Average occupancy |
71.5 |
% |
|
74.7 |
% |
|
78.3 |
% |
|
81.3 |
% |
|
81.4 |
% |
||||||
|
RevPAR (3) |
$ |
2,596 |
|
|
$ |
2,665 |
|
|
$ |
2,813 |
|
|
$ |
2,930 |
|
|
$ |
2,941 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Managed Communities (1)(4): |
|
|
|
|
|
|
|
|
|
|||||||||||
|
Number of communities (end of period) |
75 |
|
|
75 |
|
|
75 |
|
|
75 |
|
|
75 |
|
||||||
|
Number of living units (end of period) (2) |
9,620 |
|
|
9,689 |
|
|
9,689 |
|
|
9,697 |
|
|
9,700 |
|
||||||
|
Average occupancy |
73.7 |
% |
|
76.7 |
% |
|
80.1 |
% |
|
83.9 |
% |
|
84.5 |
% |
||||||
|
RevPAR (3) |
$ |
3,120 |
|
|
$ |
3,084 |
|
|
$ |
3,340 |
|
|
$ |
3,548 |
|
|
$ |
3,559 |
|
|
|
(1) |
Includes data for senior living communities that FVE has continuously owned, continuously leased or continuously managed since October 1, 2019. |
|
(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 sale of senior living communities. |
|
(3) |
RevPAR is defined by FVE as resident fee revenues for the corresponding portfolio for the period divided by the average number of available units for the period, divided by the number of months in the period. Data for the three months ended June 30, 2020 and December 31, 2020 exclude income received by communities under the CARES Act and other governmental grants. |
|
(4) |
Senior living segment data for comparable managed communities represents financial data of communities FVE manages for the account of DHC and does not represent financial results of FVE. Managed communities' data is included to provide supplemental information regarding the operating results and financial condition of the communities from which FVE earns management fees. |
|
Five Star Senior Living Inc. |
||||||||||||||||||||
|
Rehabilitation and Wellness Services Segment Data |
||||||||||||||||||||
|
(dollars in thousands) |
||||||||||||||||||||
|
(unaudited) |
||||||||||||||||||||
|
|
|
|
||||||||||||||||||
|
|
|
Three Months Ended |
||||||||||||||||||
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
||||||||||
|
|
|
2020 |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
||||||||||
|
Rehabilitation and Wellness Services (1): |
|
|
|
|
|
|
|
|
|
|||||||||||
|
Revenues (2) |
$ |
20,256 |
|
|
$ |
21,124 |
|
|
$ |
19,268 |
|
|
$ |
21,384 |
|
|
$ |
13,978 |
|
|
|
Other operating income (3) |
221 |
|
|
— |
|
|
1,499 |
|
|
— |
|
|
— |
|
||||||
|
Operating expenses |
16,613 |
|
|
16,833 |
|
|
16,259 |
|
|
17,616 |
|
|
12,384 |
|
||||||
|
Operating income |
3,864 |
|
|
4,291 |
|
|
4,508 |
|
|
3,768 |
|
|
1,594 |
|
||||||
|
Operating margin |
18.9 |
% |
|
20.3 |
% |
|
21.7 |
% |
|
17.6 |
% |
|
11.4 |
% |
||||||
|
Number of inpatient clinics (end of period) |
37 |
|
|
40 |
|
|
40 |
|
|
41 |
|
|
41 |
|
||||||
|
Number of outpatient clinics (end of period) |
207 |
|
|
209 |
|
|
206 |
|
|
203 |
|
|
190 |
|
||||||
|
(1) |
Includes Ageility clinics and home health operations. |
|
(2) |
Prior to January 1, 2020, which was the effective date of the Transaction Agreement (as defined below), revenue related to inpatient clinics at communities we previously leased from DHC was eliminated in consolidation pursuant to GAAP. |
|
(3) |
Other operating income represents income recognized for funds received under the Provider Relief Fund of the CARES Act, and other governmental grants. |
|
Five Star Senior Living Inc. |
||||||||||||||||||||
|
Comparable Rehabilitation and Wellness Services Segment Data |
||||||||||||||||||||
|
(dollars in thousands) |
||||||||||||||||||||
|
(unaudited) |
||||||||||||||||||||
|
|
|
|
||||||||||||||||||
|
|
|
Three Months Ended |
||||||||||||||||||
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
||||||||||
|
|
|
2020 |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
||||||||||
|
Rehabilitation and Wellness Services (1): |
|
|
|
|
|
|
|
|
|
|||||||||||
|
Revenues (2) |
$ |
17,823 |
|
|
$ |
18,553 |
|
|
$ |
17,412 |
|
|
$ |
19,326 |
|
|
$ |
12,948 |
|
|
|
Other operating income (3) |
252 |
|
|
— |
|
|
1,285 |
|
|
— |
|
|
— |
|
||||||
|
Operating expenses |
14,637 |
|
|
14,807 |
|
|
14,602 |
|
|
15,725 |
|
|
11,309 |
|
||||||
|
Operating income |
3,438 |
|
|
3,746 |
|
|
4,095 |
|
|
3,601 |
|
|
1,639 |
|
||||||
|
Operating margin |
19.0 |
% |
|
20.2 |
% |
|
21.9 |
% |
|
18.6 |
% |
|
12.7 |
% |
||||||
|
Number of inpatient clinics (end of period) |
37 |
|
|
37 |
|
|
37 |
|
|
37 |
|
|
37 |
|
||||||
|
Number of outpatient clinics (end of period) |
166 |
|
|
166 |
|
|
166 |
|
|
166 |
|
|
166 |
|
||||||
|
(1) |
Includes Ageility clinics and home health operations. |
|
(2) |
Prior to January 1, 2020, which was the effective date of the Transaction Agreement (as defined below), revenue related to inpatient clinics at communities we previously leased from DHC was eliminated in consolidation pursuant to GAAP. |
|
(3) |
Other operating income represents income recognized for funds received under the Provider Relief Fund of the CARES Act, and other governmental grants. |
|
Five Star Senior Living Inc. |
||||||||||||||||||||||||
|
Owned Senior Living Communities as of and for the Three Months Ended December 31, 2020 |
||||||||||||||||||||||||
|
(dollars in thousands) |
||||||||||||||||||||||||
|
(unaudited) |
||||||||||||||||||||||||
|
No. |
|
Community Name |
|
State |
|
Property |
|
Living |
|
Senior Living |
|
Gross |
|
Net Carrying |
|
Date Acquired |
|
Year Built or |
||||||
|
1 |
|
Morningside of Decatur (2) |
|
Alabama |
|
AL |
|
49 |
|
$ |
318 |
|
|
$ |
3,668 |
|
|
$ |
2,149 |
|
|
11/19/2004 |
|
1999 |
|
2 |
|
Morningside of Auburn |
|
Alabama |
|
AL |
|
42 |
|
360 |
|
|
2,341 |
|
|
1,560 |
|
|
11/19/2004 |
|
1997 |
|||
|
3 |
|
The Palms of Fort Myers (2) |
|
Florida |
|
IL |
|
218 |
|
1,587 |
|
|
30,938 |
|
|
14,914 |
|
|
4/1/2002 |
|
1988 |
|||
|
4 |
|
Five Star Residences of Banta Pointe (3) |
|
Indiana |
|
AL |
|
121 |
|
719 |
|
|
18,328 |
|
|
12,666 |
|
|
9/29/2011 |
|
2006 |
|||
|
5 |
|
Five Star Residences of Fort Wayne (2) |
|
Indiana |
|
AL |
|
154 |
|
1,102 |
|
|
25,806 |
|
|
17,704 |
|
|
9/29/2011 |
|
1998 |
|||
|
6 |
|
Five Star Residences of Clearwater |
|
Indiana |
|
AL |
|
88 |
|
384 |
|
|
9,793 |
|
|
5,511 |
|
|
6/1/2011 |
|
1999 |
|||
|
7 |
|
Five Star Residences of Lafayette (2) |
|
Indiana |
|
AL |
|
109 |
|
498 |
|
|
15,880 |
|
|
10,833 |
|
|
6/1/2011 |
|
2000 |
|||
|
8 |
|
Five Star Residences of Noblesville (2) |
|
Indiana |
|
AL |
|
151 |
|
1,209 |
|
|
25,214 |
|
|
17,596 |
|
|
7/1/2011 |
|
2005 |
|||
|
9 |
|
The Villa at Riverwood (2) |
|
Missouri |
|
IL |
|
110 |
|
624 |
|
|
6,972 |
|
|
3,236 |
|
|
4/1/2002 |
|
1986 |
|||
|
10 |
|
Voorhees Senior Living (2) |
|
New Jersey |
|
AL |
|
104 |
|
1,069 |
|
|
10,290 |
|
|
6,067 |
|
|
7/1/2008 |
|
1999 |
|||
|
11 |
|
Washington Township Senior Living (2) |
|
New Jersey |
|
AL |
|
93 |
|
918 |
|
|
10,261 |
|
|
6,093 |
|
|
7/1/2008 |
|
1998 |
|||
|
12 |
|
Carriage House Senior Living |
|
North Carolina |
|
AL |
|
98 |
|
980 |
|
|
8,436 |
|
|
5,324 |
|
|
12/1/2008 |
|
1997 |
|||
|
13 |
|
Forest Heights Senior Living |
|
North Carolina |
|
AL |
|
111 |
|
866 |
|
|
13,656 |
|
|
8,896 |
|
|
12/1/2008 |
|
1998 |
|||
|
14 |
|
Fox Hollow Senior Living (2) |
|
North Carolina |
|
AL |
|
77 |
|
839 |
|
|
11,061 |
|
|
7,213 |
|
|
7/1/2000 |
|
1999 |
|||
|
15 |
|
Legacy Heights Senior Living (2) |
|
North Carolina |
|
AL |
|
116 |
|
1,418 |
|
|
12,677 |
|
|
8,065 |
|
|
12/1/2008 |
|
1997 |
|||
|
16 |
|
Morningside at Irving Park |
|
North Carolina |
|
AL |
|
91 |
|
818 |
|
|
6,983 |
|
|
3,857 |
|
|
11/19/2004 |
|
1997 |
|||
|
17 |
|
The Devon Senior Living |
|
Pennsylvania |
|
AL |
|
84 |
|
633 |
|
|
6,890 |
|
|
3,807 |
|
|
7/1/2008 |
|
1985 |
|||
|
18 |
|
The Legacy of Anderson |
|
South Carolina |
|
IL |
|
101 |
|
550 |
|
|
1,387 |
|
|
455 |
|
|
12/1/2008 |
|
2003 |
|||
|
19 |
|
Morningside of Springfield (2) |
|
Tennessee |
|
AL |
|
54 |
|
410 |
|
|
3,704 |
|
|
1,740 |
|
|
11/19/2004 |
|
1984 |
|||
|
20 |
|
Huntington Place |
|
Wisconsin |
|
AL |
|
127 |
|
766 |
|
|
17,545 |
|
|
11,200 |
|
|
7/15/2010 |
|
1999 |
|||
|
|
|
Total |
|
|
|
|
|
2,098 |
|
$ |
16,068 |
|
|
$ |
241,830 |
|
|
$ |
148,886 |
|
|
|
|
|
|
(1) |
AL is primarily an assisted living community and IL is primarily an independent living community. |
|
(2) |
Encumbered property under our $65,000 revolving credit facility. |
|
(3) |
Encumbered property under our $7,171 mortgage note. |
|
(4) |
Excludes funds received under the Provider Relief Fund of the CARES Act and other governmental grants recognized as other income. |
Selected Pro Forma Condensed Consolidated Financial Information and Other Data
As previously announced, FVE entered into a transaction agreement, or the Transaction Agreement, with DHC to restructure our business arrangements pursuant to which, effective January 1, 2020:
- FVE’s then existing five master leases with DHC as well as FVE’s existing management and pooling agreements with DHC were terminated and replaced with new management agreements for all of these senior living communities, together with a related omnibus agreement, the New Management Agreements;
- FVE issued 10,268,158 of its common shares to DHC and an aggregate of 16,118,849 of its common shares to DHC's shareholders of record as of December 13, 2019, or together, the Share Issuances; and
- as consideration for the Share Issuances, DHC provided to FVE $75.0 million by assuming certain of FVE's working capital liabilities and through cash payments. The fair value of this consideration was $97.9 million. Such consideration, the New Management Agreements and the Share Issuances are collectively referred to as the Restructuring Transactions.
The following is a summary of selected financial and other data presented on a pro forma basis after giving effect to the completion of the Restructuring Transactions. The unaudited pro forma condensed consolidated statement of operations includes adjustments related to the Restructuring Transactions described above, and assumes that the Restructuring Transactions occurred as of January 1, 2019. In the opinion of management, all adjustments necessary to reflect the effects of the Restructuring Transactions have been included. The unaudited pro forma condensed consolidated statement of operations and the selected financial and other data are primarily based on, and should be read in conjunction with, FVE’s audited consolidated financial statements and accompanying notes included in FVE’s Annual Reports on Form 10-K for the years ended December 31, 2020 and December 31, 2019.
The historical consolidated financial information for FVE included in the unaudited condensed consolidated pro forma statement of operations and selected financial and other data has been adjusted to give effect to pro forma events that are (1) directly attributable to the Restructuring Transactions, (2) factually supportable and (3) expected to have a continuing impact on FVE’s results of operations. The unaudited pro forma condensed consolidated statement of operations and pro forma selected financial and other data should be read in conjunction with the accompanying notes. The unaudited pro forma condensed consolidated statement of operations and other selected financial and other data are provided for informational purposes only.
|
Five Star Senior Living Inc. |
||||||||
|
Condensed Consolidated Statement of Operations |
||||||||
|
(amounts in thousands, except per share amounts) |
||||||||
|
(unaudited) |
||||||||
|
|
Three Months Ended December 31, |
|||||||
|
|
2020 |
|
Pro Forma 2019 (1) |
|||||
|
REVENUES |
|
|
|
|||||
|
Senior living |
$ |
17,903 |
|
|
$ |
20,411 |
|
|
|
Management fees |
14,822 |
|
|
17,489 |
|
|||
|
Rehabilitation and wellness services |
20,256 |
|
|
18,551 |
|
|||
|
Total management and operating revenues |
52,981 |
|
|
56,451 |
|
|||
|
Reimbursed community-level costs incurred on behalf of managed communities |
226,264 |
|
|
250,993 |
|
|||
|
Other reimbursed expenses |
6,645 |
|
|
— |
|
|||
|
Total revenues |
285,890 |
|
|
307,444 |
|
|||
|
|
|
|
|
|||||
|
Other operating income (2) |
1,936 |
|
|
— |
|
|||
|
|
|
|
|
|||||
|
OPERATING EXPENSES |
|
|
|
|||||
|
Senior living wages and benefits |
11,186 |
|
|
9,053 |
|
|||
|
Other senior living operating expenses |
7,180 |
|
|
5,267 |
|
|||
|
Rehabilitation and wellness services expenses |
15,901 |
|
|
16,445 |
|
|||
|
Community-level costs incurred on behalf of managed communities |
226,264 |
|
|
250,993 |
|
|||
|
General and administrative |
20,820 |
|
|
14,247 |
|
|||
|
Rent |
1,281 |
|
|
1,133 |
|
|||
|
Depreciation and amortization |
2,913 |
|
|
2,710 |
|
|||
|
Total operating expenses |
285,545 |
|
|
299,848 |
|
|||
|
|
|
|
|
|||||
|
Operating income |
2,281 |
|
|
7,596 |
|
|||
|
|
|
|
|
|||||
|
Interest, dividend and other income |
132 |
|
|
379 |
|
|||
|
Interest and other expense |
(461 |
) |
|
(330 |
) |
|||
|
Unrealized gain on equity investments |
640 |
|
|
306 |
|
|||
|
Realized gain on sale of debt and equity investments |
3 |
|
|
2 |
|
|||
|
|
|
|
|
|||||
|
Income before income taxes and equity in earnings of an investee |
2,595 |
|
|
7,953 |
|
|||
|
Benefit (provision) for income taxes |
308 |
|
|
(2,065 |
) |
|||
|
Equity (loss) in earnings of an investee |
— |
|
|
(42 |
) |
|||
|
Net income |
$ |
2,903 |
|
|
$ |
5,846 |
|
|
|
Add (less): |
|
|
|
|||||
|
Interest and other expense |
$ |
461 |
|
|
$ |
330 |
|
|
|
Interest, dividend and other income |
(132 |
) |
|
(379 |
) |
|||
|
(Benefit) provision for income taxes |
(308 |
) |
|
2,065 |
|
|||
|
Depreciation and amortization |
2,913 |
|
|
2,710 |
|
|||
|
EBITDA |
$ |
5,837 |
|
|
$ |
10,572 |
|
|
|
Add (less): |
|
|
|
|||||
|
Unrealized gain on equity investments |
$ |
(640 |
) |
|
$ |
(306 |
) |
|
|
Transaction costs |
36 |
|
|
— |
|
|||
|
Adjusted EBITDA |
$ |
5,233 |
|
|
$ |
10,266 |
|
|
|
|
|
|
|
|||||
|
Weighted average shares outstanding—basic |
31,495 |
|
|
31,389 |
|
|||
|
Weighted average shares outstanding—diluted |
31,612 |
|
|
31,623 |
|
|||
|
Net income per share—basic |
$ |
0.09 |
|
|
$ |
0.19 |
|
|
|
Net income per share—diluted |
$ |
0.09 |
|
|
$ |
0.18 |
|
|
|
(1) |
See following reconciliation. |
|
(2) |
Other operating income represents income recognized for funds received under the Provider Relief Fund of the CARES Act and other governmental grants. |
|
Five Star Senior Living Inc. |
||||||||||||||
|
Pro Forma Condensed Consolidated Statement of Operations |
||||||||||||||
|
(amounts in thousands, except per share amounts) |
||||||||||||||
|
(unaudited) |
||||||||||||||
|
|
|
|
||||||||||||
|
|
|
Three Months Ended December 31, 2019 |
||||||||||||
|
|
|
As Reported |
|
Restructuring |
|
Note |
|
Pro Forma |
||||||
|
REVENUES |
|
|
|
|
|
|
|
|
||||||
|
Senior living |
|
$ |
249,727 |
|
|
$ |
(229,316 |
) |
|
2(a) |
|
$ |
20,411 |
|
|
Management fees |
|
4,109 |
|
|
13,380 |
|
|
2(b) |
|
17,489 |
|
|||
|
Rehabilitation and wellness services |
|
13,978 |
|
|
4,573 |
|
|
2(c) |
|
18,551 |
|
|||
|
Reimbursed community-level costs incurred on behalf of managed communities |
|
81,059 |
|
|
169,934 |
|
|
2(d) |
|
250,993 |
|
|||
|
Total revenues |
|
348,873 |
|
|
(41,429 |
) |
|
|
|
307,444 |
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
||||||
|
Senior living wages and benefits |
|
127,378 |
|
|
(118,325 |
) |
|
2(e) |
|
9,053 |
|
|||
|
Other senior living operating expenses |
|
68,748 |
|
|
(63,481 |
) |
|
2(f) |
|
5,267 |
|
|||
|
Rehabilitation and wellness services expenses |
|
11,872 |
|
|
4,573 |
|
|
2(c) |
|
16,445 |
|
|||
|
Community-level costs incurred on behalf of managed communities |
|
81,059 |
|
|
169,934 |
|
|
2(d) |
|
250,993 |
|
|||
|
General and administrative |
|
20,740 |
|
|
(6,493 |
) |
|
2(g) |
|
14,247 |
|
|||
|
Rent |
|
20,513 |
|
|
(19,380 |
) |
|
2(h) |
|
1,133 |
|
|||
|
Depreciation and amortization |
|
2,716 |
|
|
(6 |
) |
|
2(i) |
|
2,710 |
|
|||
|
Loss on sale of senior living communities |
|
6 |
|
|
(6 |
) |
|
|
|
— |
|
|||
|
Long-lived asset impairment |
|
4 |
|
|
(4 |
) |
|
|
|
— |
|
|||
|
Total operating expenses |
|
333,036 |
|
|
(33,188 |
) |
|
|
|
299,848 |
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
|
Operating income (loss) |
|
15,837 |
|
|
(8,241 |
) |
|
|
|
7,596 |
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
|
Interest, dividend and other income |
|
379 |
|
|
— |
|
|
|
|
379 |
|
|||
|
Interest and other expense |
|
(419 |
) |
|
89 |
|
|
2(j) |
|
(330 |
) |
|||
|
Unrealized gain on equity investments |
|
306 |
|
|
— |
|
|
|
|
306 |
|
|||
|
Realized gain on sale of debt and equity investments |
|
2 |
|
|
— |
|
|
|
|
2 |
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
|
Income (loss) before income taxes and equity in earnings of an investee |
|
16,105 |
|
|
(8,152 |
) |
|
|
|
7,953 |
|
|||
|
Benefit (provision) for income taxes |
|
42 |
|
|
(2,107 |
) |
|
2(k) |
|
(2,065 |
) |
|||
|
Loss in earnings of an investee |
|
(42 |
) |
|
— |
|
|
|
|
(42 |
) |
|||
|
Net income (loss) |
|
$ |
16,105 |
|
|
$ |
(10,259 |
) |
|
|
|
$ |
5,846 |
|
|
Add (less): |
|
|
|
|
|
|
|
|
||||||
|
Interest and other expense |
|
$ |
419 |
|
|
$ |
(89 |
) |
|
|
|
$ |
330 |
|
|
Interest, dividend and other income |
|
(379 |
) |
|
— |
|
|
|
|
(379 |
) |
|||
|
(Benefit) provision for income taxes |
|
(42 |
) |
|
2,107 |
|
|
|
|
2,065 |
|
|||
|
Depreciation and amortization |
|
2,716 |
|
|
(6 |
) |
|
|
|
2,710 |
|
|||
|
EBITDA |
|
$ |
18,819 |
|
|
$ |
(8,247 |
) |
|
|
|
$ |
10,572 |
|
|
Add (less): |
|
|
|
|
|
|
|
|
||||||
|
Loss on sale of senior living communities |
|
$ |
6 |
|
|
$ |
(6 |
) |
|
|
|
$ |
— |
|
|
Long-lived asset impairment |
|
4 |
|
|
(4 |
) |
|
|
|
— |
|
|||
|
Unrealized gain on equity investments |
|
(306 |
) |
|
— |
|
|
|
|
(306 |
) |
|||
|
Lease inducement |
|
(12,423 |
) |
|
12,423 |
|
|
|
|
— |
|
|||
|
Deferred resident fees and deposits |
|
(4,242 |
) |
|
4,242 |
|
|
|
|
— |
|
|||
|
Transaction costs |
|
1,814 |
|
|
(1,814 |
) |
|
|
|
— |
|
|||
|
Adjusted EBITDA |
|
$ |
3,672 |
|
|
$ |
6,594 |
|
|
|
|
$ |
10,266 |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Weighted average shares outstanding—basic |
|
5,002 |
|
|
26,387 |
|
|
2(l) |
|
31,389 |
|
|||
|
Weighted average shares outstanding—diluted |
|
5,119 |
|
|
26,504 |
|
|
2(l) |
|
31,623 |
|
|||
|
Net income per share—basic |
|
$ |
3.22 |
|
|
|
|
|
|
$ |
0.19 |
|
||
|
Net income per share—diluted |
|
$ |
3.15 |
|
|
|
|
|
|
$ |
0.18 |
|
||
See accompanying notes.
Five Star Senior Living Inc.
Notes to Pro Forma Condensed Consolidated Statement of Operations
(in thousands, except per share amounts)
(unaudited)
Note 1. Basis of Presentation
The unaudited pro forma condensed consolidated statement of operations was derived from FVE’s historical financial statements prepared in accordance with GAAP, and should be read in conjunction with the audited consolidated financial statements and notes thereto included in FVE’s Annual Reports on Form 10-K for the years ended December 31, 2020 and December 31, 2019.
The unaudited pro forma condensed consolidated statement of operations is presented for informational purposes only and is not necessarily indicative of what FVE’s actual results of operations would have been had the Restructuring Transactions described herein been completed as of the assumed dates, or of FVE’s expected results of operations for any future period. Differences could result from many factors, including future changes in FVE’s capital structure, operating expenses, revenues and cash flows.
Note 2. Pro Forma Restructuring Transactions Adjustments
The unaudited pro forma condensed consolidated statement of operations includes adjustments related to the Restructuring Transactions described herein, including the conversion of all of FVE’s then existing leases and management arrangements with DHC to the New Management Agreements and the Share Issuances.
FVE’s historical consolidated financial information has been adjusted in the pro forma condensed consolidated statement of operations to give effect to events that are (1) directly attributable to the Restructuring Transactions, (2) factually supportable and (3) expected to have a continuing impact on the results of operations.
Pro Forma Condensed Consolidated Statement of Operations
a. Senior living revenues
The adjustment to senior living revenues is related to the termination and conversion of the then existing master leases to the New Management Agreements. The resulting revenues earned will be recognized and reported as management fee revenues in FVE's consolidated statements of operations.
b. Management fees
Adjustments to management fee revenues are comprised as follows:
|
|
|
Three Months Ended |
||
|
Adjustment to increase management fee revenues for then existing management agreements from 3% to 5% per the New Management Agreements |
|
$ |
1,607 |
|
|
5% management fee relating to the termination and conversion of the then existing master leases to the New Management Agreements |
|
11,254 |
|
|
|
3% construction management fee relating to the termination and conversion of the then existing master leases to the New Management Agreements |
|
519 |
|
|
|
Net adjustment to management fee revenues |
|
$ |
13,380 |
|
c. Rehabilitation and wellness services revenues and rehabilitation and wellness services expenses
Adjustments to rehabilitation and wellness services revenues and expenses are attributable to Ageility inpatient clinics at communities where FVE leased and operated the business and where revenues and expenses were previously considered to be intercompany revenues and expenses and hence were eliminated pursuant to consolidation accounting. Upon the consummation of the Restructuring Transactions, and consistent with the existing managed communities, the revenues and expenses at these inpatient clinics no longer constitute intercompany revenues and expenses and thus are not eliminated in consolidation and are now recognized and reported as rehabilitation and wellness services revenue and rehabilitation and wellness services expenses in FVE's consolidated statements of operations.
d. Reimbursed community-level costs incurred on behalf of managed communities and community-level costs incurred on behalf of managed communities
Adjustments to both reimbursed community-level costs incurred on behalf of managed communities and community-level costs incurred on behalf of managed communities were related to the conversion of FVE's master leases with DHC to the New Management Agreements, which provide for reimbursement of FVE's direct costs and expenses related to such communities, inclusive of certain costs that are directly attributable to managing the communities, including personnel-related costs.
e. Senior living wages and benefits
The adjustment to senior living wages and benefits is related to the conversion of all FVE's leases with DHC to the New Management Agreements. Certain of these expenses were recognized and reported as community-level costs incurred on behalf of managed communities in FVE's consolidated statements of operations (with an offsetting reimbursement from DHC recognized as revenues in the consolidated statements of operations). See 2.d above.
f. Other senior living operating expenses
Adjustments to other senior living operating expenses are related to the conversion of all of FVE's leases with DHC to the New Management Agreements and include, but are not limited to, utilities, housekeeping, dietary, repairs and maintenance, insurance and community-level administrative costs. These costs were reimbursable costs and treated as described in 2.d above.
g. General and administrative
Adjustments to general and administrative expenses are comprised as follows:
|
|
|
Three Months Ended |
||
|
Adjustment of certain reimbursable costs to directly support managed communities |
|
$ |
(4,706 |
) |
|
Adjustment to remove non-recurring transaction costs we previously incurred relating to the Restructuring Transactions |
|
(1,814 |
) |
|
|
Increase in management fee to The RMR Group LLC due to increase in Ageility revenue |
|
27 |
|
|
|
Net adjustment to general and administrative expenses |
|
$ |
(6,493 |
) |
h. Rent
The reduction to rent expense is for rent under the then existing master leases converted to the New Management Agreements.
i. Depreciation and amortization
In connection with the Transaction Agreement, on April 1, 2019, we sold $49,200 of assets to DHC. Prior to that sale, we recorded depreciation and amortization expense with respect to those assets in operating expenses in our consolidated statements of operations. Adjustments to depreciation and amortization expense reflect the amounts previously recognized during the periods presented for depreciation and amortization expense with respect to those assets.
j. Interest and other expense
Interest and other expense has been adjusted to give effect to the assumed repayment of our outstanding borrowings under our credit facility.
k. Provision for income taxes
Adjustments to provision for income taxes reflect the income tax effect of the pro forma adjustments based on the estimated effective tax rate of approximately 26.1% for the three months ended December 31, 2019.
l. Weighted average common shares outstanding - basic and diluted
The increase in FVE's basic and diluted weighted average common shares outstanding is a result of the issuance of 10,268,158 and 16,118,849 common shares to DHC and to the applicable DHC shareholders, respectively, in connection with the completion of the Restructuring Transactions. FVE's diluted weighted average common shares outstanding is also impacted by the potentially dilutive restricted unvested common shares of 116,710 for the three months ended December 31, 2019. This diluted share impact is directly related to FVE's 2014 Equity Compensation Plan and was originally excluded from the as reported numbers because to include them would be antidilutive.
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 Five Star Senior Living Inc. uses words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, "will", “may” and negatives or derivatives of these or similar expressions, FVE is making forward-looking statements. These forward-looking statements are based upon FVE’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 FVE’s forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond FVE's control. For example:
- Ms. Potter states that FVE expects to have completed vaccination clinics at substantially all of its communities by the end of the first quarter. However, FVE may not be able to accomplish this goal due to factors outside of its control, including the capacity of vaccine manufacturers and federal, state and local governments to manufacture and distribute a vaccine in sufficient quantities. Completing vaccination clinics may imply that all residents and team members have been vaccinated but that is not the case. In addition, Ms. Potter refers to FVE's belief that its vaccination clinics are a significant step towards its recovery from the COVID-19 pandemic. However, even if its vaccination clinics are successful, the adverse impacts from the COVID-19 pandemic on the senior living industry and FVE's business may continue for various reasons, including reduced demand of older adults for its services.
- Ms. Potter states that sales leads are increasing as compared to the fourth quarter, that they have historically been a leading indicator of move-in activity and a key component in driving occupancy and that FVE finds this encouraging. However, sales leads may not result in increased occupancy. Occupancy at our senior living communities has experienced declines during the COVID-19 pandemic and we expect continuing declines over a sustained period. In addition, we may be required, or we may determine, to place holds on the admission of new residents at certain of our communities due to the COVID-19 pandemic.
- Ms. Potter states in this press release that FVE continued to generate net income in the fourth quarter, despite the ongoing impact of COVID-19 on the senior living industry. Ms. Potter also references increases in the revenues of FVE's rehabilitation and wellness services division and the increased proportion of that division's revenues to certain of FVE's revenues. This may imply that this division will continue to grow and increasingly become a larger part of FVE's business. However, FVE's rehabilitation and wellness services division is subject to various risks, including the COVID-19 pandemic, and its revenues may not grow and it may not increase in proportion of FVE's business and operating results and it could realize declines.
- Ms. Potter's statement that FVE's liquidity remains strong with $84.4 million of unrestricted cash on hand and no borrowings outstanding on its revolving credit facility may imply that FVE will continue to have adequate liquidity; however, FVE's business remains subject to various risks, some of which are beyond FVE's control, including the disruption of the COVID-19 pandemic and economic downturn. In addition, FVE's ability to borrow under its revolving credit facility is subject to it satisfying certain conditions and limited to the amount of qualified collateral; the maximum borrowing capacity was $42.1 million as of December 30, 2020 and may be lower in amount or not available in the future.
The information contained in FVE’s filings with the Securities and Exchange Commission, or SEC, including under “Risk Factors” in FVE’s periodic reports, or incorporated therein, identifies other important factors that could cause FVE’s actual results to differ materially from those stated in or implied by FVE’s forward-looking statements. FVE’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, FVE 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/20210224006054/en/