CAPITAL SENIOR LIVING CORPORATION REPORTS FOURTH QUARTER AND FULL YEAR 2019 RESULTS

Tuesday, 31. March 2020 12:00

Revenue and CFFO Stabilize in Fourth Quarter

Recent Lease Terminations and Transactions Strengthen Financial Foundation

Provides Business Update in Response to COVID-19

DALLAS, March 31, 2020 (GLOBE NEWSWIRE) -- Capital Senior Living Corporation (the “Company”) (NYSE: CSU), one of the nation’s largest operators of senior housing communities, announced today operating and financial results for the fourth quarter and full year ended December 31, 2019.

“During 2019, we put in place the operational discipline necessary to improve the business for the long term, and as a result, we are pleased to report that our operating performance stabilized in the fourth quarter,” said Kimberly S. Lody, President and Chief Executive Officer. “Specifically, we have improved the quality of our products and services, upgraded our management talent, improved our data and systems, and enhanced the efficiency and effectiveness of our operational processes. In addition, we have strengthened the Company’s financial foundation through the sale of non-core communities and the accretive early terminations of our master leases with Healthpeak, Ventas and Welltower. All of these actions will improve our operating performance going forward, reduce our debt and lease liabilities, and significantly enhance our financial flexibility and resilience.” 

Ms. Lody continued, “As the COVID-19 pandemic continues to unfold, we are relentlessly focused on the safety and wellbeing of our residents, employees and caregivers. This is, and will remain, our highest priority. We are taking all precautionary safety measures, following guidance from the CDC and other government authorities, and focusing on prevention and education to keep our communities safe. We are closely monitoring updates from federal, state, and local sources and will continue to evolve our response as we receive new information.”

COVID-19 Business Update

At the onset of the COVID-19 pandemic, the Company’s operations teams swiftly implemented comprehensive protocols and best-practices across the portfolio based on guidance from the Centers for Disease Control as well as federal, state and local authorities.  All communities have executed risk-mitigation actions, such as restricting access and assessing the health status of every person entering the communities, including the Company’s employees, all visitors, and all outside service providers.

Through mid-March 2020, the Company delivered results in line with its expectations. Although in-person community tours have now slowed, the Company is relying on its virtual tours, social media and other electronic means to continue engaging with prospective residents and their families. New residents continue to move in, but at a lower rate than in recent months, and the level of move-outs is also trending lower.  The Company expects to recognize increases in labor costs due to the need for premium labor to supplement staffing, and increases in costs for medical supplies.  To offset the COVID-related expenditures, the Company has reduced spending on non-essential supplies, travel costs and all other discretionary items, and has ceased all non-critical capital expenditure projects.  The Company will continue to monitor these trends and conditions while working to mitigate the potential impact on its revenues, expenses and liquidity.

The company is evaluating the CARES stimulus bill, and plans to apply relevant provisions of the bill to the fullest extent possible.

Recent Highlights

  • Revenue stabilized in the fourth quarter of 2019 at $108.7 million, consistent with the revenue contribution for like communities in the third quarter of 2019.
  • Adjusted CFFO was $(1.4) million in the fourth quarter of 2019 as compared to $(1.2) million in third quarter of 2019.
  • On October 1, the Company sold two non-core independent living communities for approximately $64.8 million, generating $14.8 million in net cash proceeds and eliminating $44.4 million of mortgage debt.
  • On October 22, the Company entered into an agreement with Healthpeak for the early termination of an underperforming nine-community master lease scheduled to mature in October 2020.
  • In the first quarter of 2020, the Company reached agreements with Healthpeak, Ventas, and Welltower for early terminations of its Master Leases. When the transitions are complete, the agreements are expected to improve the Company’s cash flow by approximately $22.0 million and all related lease liabilities, which were approximately $253.0 million at December 31, 2019, will be eliminated.
  • The Company announces that it expects to close today on the sale of a non-core community in Indiana that results in approximately $6.9 million in net cash proceeds.

Full Year Results

The Company reported net loss of $36.0 million for the year ended December 31, 2019. 

The Company’s Non-GAAP financial measures exclude two communities that are undergoing significant renovation and conversion (see “Non-GAAP Financial Measures” below).

Adjusted EBITDAR and Adjusted CFFO for full year 2019 were $121.4 million and $8.1 million, respectively. Adjusted CFFO for full year 2019 includes a negative net impact of $2.0 million related to the Company’s adoption of the new lease accounting standard (“ASC 842”) effective January 1, 2019. There was no impact on Adjusted EBITDAR related to the adoption of the new lease standard.

Financial Results - Fourth Quarter

For the fourth quarter of 2019, the Company reported revenue of $108.7 million, compared with revenue of $115.1 million in the fourth quarter of 2018.  The disposition of three communities during 2019 accounted for $3.2 million of the decrease.   Total occupancy in the fourth quarter of 2019 was 80.7%, a decrease of 250 basis points as compared to the fourth quarter of 2018, and monthly average rent was $3,662, an increase of 0.4% as compared to the fourth quarter of 2018.   

Operating expenses for the fourth quarter of 2019 were $78.7 million, an increase of $2.7 million, or 3.5%, from the fourth quarter of 2018.  The increase was mostly due to increases in advertising and promotion, repairs and maintenance, supplies, service contracts and employee vacation expense related to an adjustment to the Company’s paid time off accrual.  These increases were partially offset by a decrease in expenses of $1.8 million in the fourth quarter of 2019 due to the disposition of the three communities in 2019.  Also, the Company did not have any business interruption credits related to the Company’s two communities impacted by Hurricane Harvey in the fourth quarter of 2019 but had credits of $0.7 million in the fourth quarter of 2018.

General and administrative expenses for the fourth quarter of 2019 were $5.8 million versus $9.6 million in the fourth quarter of 2018. Excluding transaction and conversion costs in both periods (including $4.0 million in separation and placement costs in the fourth quarter of 2018 primarily associated with the Company’s former CEO), general and administrative expenses increased $0.8 million in the fourth quarter of 2019 versus the fourth quarter of 2018.  As a percentage of revenues under management, general and administrative expenses, excluding transaction and conversion costs, were 5.5% in the fourth quarter of 2019.

Loss from operations for the fourth quarter of 2019 was $8.8 million as compared to $3.1 million in the fourth quarter of 2018. Net income was $10.2 million for the fourth quarter of 2019, including a $38.8 million gain on the sale of two non-core communities.

The Company’s Non-GAAP financial measures exclude two communities that are undergoing significant renovation and conversion (see “Non-GAAP Financial Measures” below).

Adjusted EBITDAR for the fourth quarter of 2019 was $25.7 million and Adjusted CFFO was $(1.4) million. Adjusted CFFO for the fourth quarter of 2019 includes a negative net impact of $0.5 million related to the Company’s adoption of the new lease accounting standard (“ASC 842”) effective January 1, 2019.  There was no impact on Adjusted EBITDAR related to the adoption of the new lease standard.

Same Community Results

Same community results exclude two previously noted communities undergoing lease-up or significant renovation and conversion, the two Houston communities impacted by Hurricane Harvey which are also in lease-up, and the three communities the Company disposed of during 2019. Same-community results also exclude certain conversion costs.

Same-community revenue in the fourth quarter of 2019 decreased 3.6% versus the fourth quarter of 2018.  Same-community occupancy in the fourth quarter was 81.4%, a decrease of 290 basis points as compared to the fourth quarter of 2018 and average monthly rent was $3,664, a decrease of 0.2% as compared to the fourth quarter of 2018.

Same-community operating expenses increased 5.0% in the fourth quarter of 2019 versus the fourth quarter of 2018.  Same store labor costs, including benefits, increased 2.7%, food costs increased 1.9%, and utilities increased 0.7%. Advertising and promotion, repairs and maintenance, supplies, and service contracts also contributed to the overall increase in operating expenses.  Same-community net operating income decreased 19.8% in the fourth quarter of 2019 when compared with the fourth quarter of 2018.
                             
Sales of Senior Living Communities

As previously announced, the Company closed on the sale of two non-core communities located in Springfield, Missouri, and Peoria, Illinois, on October 1, 2019, at a purchase price of $64.8 million.  The transaction resulted in approximately $14.8 million in net cash proceeds.  The two communities consisted of 314 independent living units and had CFFO contribution of $2.5 million in 2019 prior to the sale. With the sale of these two communities, the Company also eliminated $44.4 million of mortgage debt and avoided significant near-term capital expenditures.

The Company announces that it expects to close today on the sale of an additional non-core community in Merrillville, Indiana, with expected net proceeds of approximately $6.9 million. The community consists of 213 assisted living and memory care units, and had CFFO contribution of approximately $0.2 million in 2019.

Balance Sheet and Liquidity

The Company ended the fourth quarter with $37.1 million of cash and cash equivalents, including restricted cash. As of December 31, 2019, the Company financed its owned communities with mortgages totaling $926.5 million, at interest rates averaging 4.8%. The majority of the Company’s debt is at fixed interest rates excluding three bridge loans totaling approximately $83.0 million, all with maturities in the fourth quarter of 2021, and approximately $50 million of long-term variable rate debt under the Company’s Master Credit Facility. The earliest maturity date for the Company’s fixed-rate debt is in 2022.

The Company has taken significant steps to strengthen its liquidity and currently expects its cash on hand and cash flow from operations to be sufficient for working capital and to fund the Company’s capital expenditures.

Q4 2019 Conference Call Information

The Company will host a conference call with senior management to discuss the Company’s 2019 fourth quarter and full year 2019 financial results on Tuesday, March 31, 2020, at 10:00 a.m. Eastern Time. To participate, dial 323-794-2093, and use confirmation code 3219928. A link to a simultaneous webcast of the teleconference will be available at www.capitalsenior.com.

For the convenience of the Company’s shareholders and the public, the conference call will be recorded and available for replay starting March 31, 2020 at 1:00 p.m. Eastern Time, until April 8, 2020 at 1:00 p.m. Eastern Time.  To access the conference call replay, call 719-457-0820, confirmation code 3219928.  The conference call will also be made available for playback via the Company’s corporate website at https://www.capitalsenior.com/investor-relations/conference-calls/.

Non-GAAP Financial Measures of Operating Performance

Adjusted EBITDAR is a financial valuation measure and Adjusted Net Income/(Loss) and Adjusted CFFO are financial performance measures that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). Non-GAAP financial measures may have material limitations in that they do not reflect all of the costs associated with our results of operations as determined in accordance with GAAP. As a result, these non-GAAP financial measures should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP.

Adjusted EBITDAR is a valuation measure commonly used by Company management, research analysts and investors to value companies in the senior living industry. Since Adjusted EBITDAR excludes interest expense and rent expense, it allows Company management, research analysts and investors to compare the enterprise values of different companies without regard to differences in capital structures and leasing arrangements.

The Company believes that Adjusted Net Income/(Loss) and Adjusted CFFO are useful as performance measures in identifying trends in day-to-day operations because they exclude the costs associated with acquisitions and conversions and other items that do not ordinarily reflect the ongoing operating results of our primary business.  Adjusted Net Income/(Loss) and Adjusted CFFO provide indicators to management of progress in achieving both consolidated and individual business unit operating performance and are used by research analysts and investors to evaluate the performance of companies in the senior living industry.

The Company strongly urges you to review the reconciliation of net loss to Adjusted EBITDAR and the reconciliation of net income/(loss) to Adjusted Net Income/(Loss) and Adjusted CFFO, along with the Company’s consolidated balance sheets, statements of operations, and statements of cash flows. This is included on the last page of this press release.

About the Company

Dallas-based Capital Senior Living Corporation is one of the nation’s largest operators of independent living, assisted living and memory care communities for senior adults. The Company’s 125 communities are home to more than 11,000 residents across 23 states and provide compassionate, resident-centric service and care as well as engaging programming.  Capital Senior Living offers seniors the freedom and opportunity to successfully, comfortably and happily age in place.  For more information, visit www.capitalsenior.com or connect with the Company on Facebook.

Safe Harbor

The forward-looking statements in this release are subject to certain risks and uncertainties that could cause the Company’s actual results and financial condition to differ materially, including, but not limited to, the Company’s ability to generate sufficient cash flows from operations, additional proceeds from debt refinancings, and proceeds from the sale of assets to satisfy its short and long-term debt and lease obligations and to fund the Company’s capital improvement projects to expand, redevelop, and/or reposition its senior living communities; the Company’s ability to obtain additional capital on terms acceptable to it; the Company’s ability to extend or refinance its existing debt as such debt matures; the Company’s compliance with its debt and lease agreements, including certain financial covenants, and the risk of cross-default in the event such non-compliance occurs; the Company’s ability to complete acquisitions and dispositions upon favorable terms or at all; the risk of oversupply and increased competition in the markets which the Company operates; the risk of increased competition for skilled workers due to wage pressure and changes in regulatory requirements; the departure of the Company’s key officers and personnel; the cost and difficulty of complying with applicable licensure, legislative oversight, or regulatory changes; the risks associated with a decline in economic conditions generally; the adequacy and continued availability of the Company’s insurance policies and the Company’s ability to recover any losses it sustains under such policies; changes in accounting principles and interpretations; and the other risks and factors identified from time to time in the Company’s reports filed with the Securities and Exchange Commission.

For information about Capital Senior Living, visit www.capitalsenior.com.

Investor Contact Carey P. Hendrickson, Chief Financial Officer, at 972-770-5600 or chendrickson@capitalsenior.com.

Press Contact Susan J. Turkell at 303-766-4343 or sturkell@capitalsenior.com.


  
CAPITAL SENIOR LIVING CORPORATION 
CONSOLIDATED BALANCE SHEETS 
(audited, in thousands, except per share data) 
      
  December 31, 
   2019   2018  
          
  (In thousands) 
ASSETS 
Current assets:     
Cash and cash equivalents $23,975  $31,309  
Restricted cash  13,088   13,011  
Accounts receivable, net  8,143   10,581  
Federal and state income taxes receivable  72   152  
Property tax and insurance deposits  12,627   13,173  
Prepaid expenses and other  5,308   5,232  
Total current assets  63,213   73,458  
Property and equipment, net  969,211   1,059,049  
Operating lease right-of-use assets, net  224,523     
Deferred taxes, net  76   152  
Other assets, net  10,673   16,485  
Total assets $1,267,696  $1,149,144  
      
LIABILITIES AND SHAREHOLDERS’ EQUITY 
Current liabilities:     
Accounts payable $10,382  $9,095  
Accrued expenses  46,227   41,880  
Current portion of notes payable, net of deferred loan costs  15,819   14,342  
Current portion of deferred income  7,201   14,892  
Current portion of financing obligations  1,741   3,113  
Current portion of lease liabilities  45,988     
Federal and state income taxes payable  420   406  
Customer deposits  1,247   1,302  
Total current liabilities  129,025   85,030  
Deferred income, net of current portion     8,151  
Financing obligations, net of current portion  9,688   45,647  
Lease liabilities, net of current portion  208,967     
Other long-term liabilities     15,643  
Notes payable, net of deferred loan costs and current portion  905,637   959,408  
Commitments and contingencies     
Shareholders’ equity:     
Preferred stock, $.01 par value:       
Authorized shares — 15,000; no shares issued or outstanding     
Common stock, $.01 par value:     
Authorized shares — 65,000; issued and outstanding shares 31,441 and 31,273 in 2019 and 2018, respectively  319   318  
Additional paid-in capital  190,386   187,879  
Retained deficit  (172,896)  (149,502) 
Treasury stock, at cost — 494 shares in 2019 and 2018  (3,430)  (3,430) 
Total shareholders’ equity  14,379   35,265  
Total liabilities and shareholders’ equity $1,267,696  $1,149,144  
      


 
CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(audited, in thousands, except per share data)
 
  Three Months Ended Year Ended
  December 31, December 31,
   2019   2018   2019   2018 
                 
  (In thousands, except per share data)
Revenues:        
Resident revenue $108,688  $115,098  $447,100  $460,018 
Expenses:        
Operating expenses (exclusive of facility lease expense and depreciation and amortization expense shown below)  78,739   76,052   306,786   294,661 
General and administrative expenses  5,752   9,638   27,518   26,961 
Facility lease expense  14,315   14,036   57,021   56,551 
Loss on facility lease termination            
Provision for bad debts  1,583   736   3,765   2,990 
Stock-based compensation expense  951   1,825   2,509   8,428 
Depreciation and amortization expense  16,105   15,933   64,190   62,824 
Total expenses  117,445   118,220   461,789   452,415 
Income (loss) from operations  (8,757)  (3,122)  (14,689)  7,603 
Other income (expense):        
Interest income  48   48   221   165 
Interest expense  (12,074)  (12,623)  (49,802)  (50,543)
Write-off of deferred loan costs and prepayment premiums  (4,746)  (12,772)  (4,843)  (12,623)
Long-lived asset impairment  (3,004)     (3,004)   
Gain (Loss) on disposition of assets, net  38,830   18   36,528   28 
Other income  (1)  1   7   3 
Loss before benefit (provision) for income taxes  10,296   (28,450)  (35,582)  (55,367)
Benefit (Provision) for income taxes  (77)  2,159   (448)  1,771 
Net income (loss) $10,219  $(26,291)  $(36,030)  $(53,596)
Per share data:        
Basic net income (loss) per share $0.34  $(0.88) $(1.19) $(1.80)
Diluted net income (loss) per share $0.34  $(0.88) $(1.19) $(1.80)
Weighted average shares outstanding — basic  30,342   29,908   30,263   29,812 
Weighted average shares outstanding — diluted  30,412   29,908   30,263   29,812 
Comprehensive income (loss) $10,219  $(26,291)  $(36,030)  $(53,596)
         


 
CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(unaudited, in thousands)
           
  Common Stock Additional Paid-In Retained Treasury  
  Shares Amount Capital Deficit Stock Total
             
  (In thousands)
Balance at January 1, 2017 30,012  305  171,599   (51,556)  (3,430)  116,918 
Restricted stock unit conversions 3    0         0 
Restricted stock awards 490  5  (4)        1 
Stock-based compensation     7,864   (182)     7,682 
Net loss        (44,168)     (44,168)
Balance at December 31, 2017 30,505  310  179,459   (95,906)  (3,430)  80,433 
Restricted stock awards 768  8  (8)         
Stock-based compensation     8,428         8,428 
Net loss        (53,596)     (53,596)
Balance at December 31, 2018 31,273  318  187,879   (149,502)  (3,430)  35,265 
Adoption of ASC 842        12,636      12,636 
Restricted stock awards 168  1  (2)        (1)
Stock-based compensation     2,509         2,509 
Net loss        (36,030)     (36,030)
Balance at December 31, 2019 31,441 $319 $190,386  $(172,896) $(3,430) $14,379 
             


 
CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(audited, in thousands, except per share data)
     
  Year Ended December 31,
   2019   2018 
         
  (in thousands)
Operating Activities    
Net loss $(36,030) $(53,596)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Depreciation and amortization  64,190   62,824 
Amortization of deferred financing charges  1,612   1,709 
Amortization of deferred lease costs and lease intangibles, net     849 
Amortization of lease incentives     (2,074)
Deferred income  1,078   (1,391)
Deferred taxes  157   (2,245)
Operating lease expense adjustment  (5,243)   
Lease incentives     3,376 
Write-off of deferred loan costs and prepayment premiums  4,843   12,623 
(Gain) Loss on disposition of assets, net  (36,528)  (28)
Long-lived assets impairment  3,004   0 
Provision for bad debts  3,765   2,990 
Stock-based compensation expense  2,509   8,428 
Changes in operating assets and liabilities:    
Accounts receivable  (1,326)  (3,173)
Property tax and insurance deposits  545   1,213 
Prepaid expenses and other  (1,013)  1,100 
Other assets  (500)  1,350 
Accounts payable  (715)  1,294 
Accrued expenses  4,343   1,129 
Federal and state income taxes receivable/payable  14   23 
Deferred resident revenue  579   561 
Customer deposits  (55)  (92)
Net cash provided by operating activities  5,229   36,870 
Investing Activities    
Capital expenditures  (20,306)  (21,965)
Proceeds from disposition of assets  68,084   57 
Net cash provided by (used in) investing activities  47,778   (21,908)
Financing Activities    
Proceeds from notes payable  37,499   208,841 
Repayments of notes payable  (95,077)  (204,093)
Cash payments for financing obligations  (1,516)  (3,151)
Deferred financing charges paid  (1,170)  (3,263)
Net cash provided by (used in) financing activities  (60,264)  (1,666)
Increase (Decrease) in cash and cash equivalents  (7,257)  13,296 
Cash and cash equivalents and restricted cash at beginning of year  44,320   31,024 
Cash and cash equivalents and restricted cash at end of year $37,063  $44,320 
Supplemental Disclosures    
Cash paid during the year for:    
Interest $47,614  $49,225 
Income taxes $505  $555 
     


               
Capital Senior Living Corporation          
Supplemental Information            
               
    Communities Average Resident Capacity Average Units
    Q4 19 Q4 18 Q4 19 Q4 18 Q4 19 Q4 18
Portfolio Data            
I. Community Ownership / Management           
 Consolidated communities           
  Owned 80  83  10,293  10,767  7,849  8,245 
  Leased 46  46  5,756  5,756  4,413  4,409 
  Total 126  129  16,049  16,523  12,262  12,654 
               
 Independent living     6,543  6,879  4,387  4,961 
 Assisted living     9,506  9,644  7,875  7,693 
 Memory Care     -  -  -  - 
  Total     16,049  16,523  12,262  12,654 
               
II. Percentage of Operating Portfolio           
 Consolidated communities           
  Owned 63.5% 64.3% 64.1% 65.2% 64.0% 65.2%
  Leased 36.5% 35.7% 35.9% 34.8% 36.0% 34.8%
  Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
               
 Independent living     40.8% 41.6% 35.8% 39.2%
 Assisted living     59.2% 58.4% 64.2% 60.8%
 Memory Care     0.0% 0.0% 0.0% 0.0%
  Total     100.0% 100.0% 100.0% 100.0%
                   


     
Capital Senior Living Corporation    
Supplemental Information (excludes four owned communities being repositioned/ leased up)   
       
Selected Operating Results Q4 19 Q4 18
I. Owned communities    
 Number of communities 76  79 
 Resident capacity 9,774  10,248 
 Unit capacity 7,405  7,801 
 Financial occupancy (1) 83.0% 86.1%
 Revenue (in millions) 65.9  71.4 
 Operating expenses (in millions) (2) 48.0  47.7 
 Operating margin 27% 33%
 Average monthly rent 3,572  3,546 
II. Leased communities    
 Number of communities 46  46 
 Resident capacity 5,756  5,756 
 Unit capacity 4,413  4,409 
 Financial occupancy (1) 78.8% 81.7%
 Revenue (in millions) 40.0  41.5 
 Operating expenses (in millions) (2) 26.8  25.4 
 Operating margin 33% 39%
 Average monthly rent 3,831  3,838 
III. Consolidated communities    
 Number of communities 122  125 
 Resident capacity 15,530  16,004 
 Unit capacity 11,818  12,210 
 Financial occupancy (1) 81.4% 84.5%
 Revenue (in millions) 105.8  112.9 
 Operating expenses (in millions) (2) 74.8  73.0 
 Operating margin 29% 35%
 Average monthly rent 3,666  3,648 
IV. Communities under management     
 Number of communities 122  125 
 Resident capacity 15,530  16,004 
 Unit capacity 11,818  12,210 
 Financial occupancy (1) 81.4% 84.5%
 Revenue (in millions) 105.8  112.9 
 Operating expenses (in millions) (2) 74.8  73.0 
 Operating margin 29% 35%
 Average monthly rent 3,666  3,648 
V. Same Store communities under management    
 Number of communities 122  122 
 Resident capacity 15,530  15,530 
 Unit capacity 11,818  11,817 
 Financial occupancy (1) 81.4% 84.3%
 Revenue (in millions) 105.8  109.7 
 Operating expenses (in millions) (2) 74.7  71.3 
 Operating margin 29% 35%
 Average monthly rent 3,664  3,670 
VI. General and Administrative expenses as a percent of Total Revenues under Management   
 Current Quarter (3)    
 Year to Date (3)    
VII. Consolidated Debt Information (in thousands, except for interest rates)    
  (Excludes insurance premium financing)    
 Total fixed rate debt    
 Weighted average interest rate    
       
(1) -Financial occupancy represents actual days occupied divided by total number of available days during the month of the quarter.
(2) -Excludes management fees & bad debt expense. Includes professional fees, taxes and insurance.   
(3) -Excludes transaction costs incurred by the Company.    
      


 
CAPITAL SENIOR LIVING CORPORATION
NON-GAAP RECONCILIATIONS
(In thousands, except per share data)
        
 Three months ended December 31, Twelve months ended December 31,
  2019   2018   2019   2018 
        
Adjusted EBITDAR       
Net loss 10,219   (26,291)  (36,030)  (53,596)
Depreciation and amortization expense 16,105   15,933   64,190   62,825 
Stock-based compensation expense 951   1,825   2,509   8,428 
Facility lease expense 14,316   14,035   57,022   56,551 
Provision for bad debts 1,583   736   3,765   2,990 
Interest income (48)  (48)  (221)  (165)
Interest expense 12,074   12,773   49,802   50,543 
Write-off of deferred loan costs and prepayment premiums 4,649   12,623   4,746   12,623 
Long-lived asset impairment 3,004     3,004   
Write down of asset held for sale -   -   -   - 
Gain on disposition of assets, net (38,830)  (18)  (36,528)  (28)
Other expense (income) -   (1)  (7)  (3)
Provision for income taxes 77   (2,159)  448   (1,771)
Casualty losses 883   1,184   2,868   1,951 
Transaction and conversion costs 311   635   2,657   1,866 
Employee placement and separation costs 487   4,091   3,073   4,745 
Employees benefit reserve adjustment (100)  (142)  (100)  548 
Communities excluded due to repositioning/lease-up 48   73   163   168 
Adjusted EBITDAR$ 25,729  $ 35,249  $ 121,361  $ 147,675 
Adjusted revenues       
Total revenues$108,688  $115,098  $447,100  $460,018 
Communities excluded due to repositioning/lease-up (1,538)  (1,332)  (5,441)  (5,581)
Adjusted revenues$ 107,150  $ 113,766  $ 441,659  $ 454,437 
Adjusted net loss and Adjusted net loss per share       
Net loss 10,219   (26,291)  (36,030)  (53,596)
Casualty losses 883   1,184   2,868   1,951 
Transaction and conversion costs 311   654   2,674   1,958 
Employee placement and separation costs 487   4,091   3,073   4,745 
Employees benefit reserve adjustment (100)  (142)  (100)  548 
Write-off of deferred loan costs and prepayment premiums 4,649   12,623   4,746   12,623 
Write down of asset held for sale -   -   -   - 
Gain on disposition of assets, net (38,830)  (18)  (36,528)  (28)
 Loss on facility lease termination 3,004   -   3,004   - 
Tax impact of Non-GAAP adjustments (25%) 7,374   (4,598)  5,041   (5,449)
Deferred tax asset valuation allowance (6,955)  3,287   3,821   9,543 
Communities excluded due to repositioning/lease-up 650   686   2,620   2,682 
Adjusted net loss$ (18,308) $ (8,524) $ (44,811) $ (25,023)
Diluted shares outstanding 30,412   29,908   30,263   29,812 
Adjusted net income (loss) per share$ (0.60) $ (0.29) $ (1.48) $ (0.84)
Adjusted CFFO       
Net loss 10,219   (26,291)  (36,030)  (53,596)
Non-cash charges, net (12,452)  28,165   39,516   83,684 
Operating lease payment adjustment to normalize lease commitments -   -   (910)  - 
Recurring capital expenditures (1,136)  (1,186)  (4,581)  (4,746)
Casualty losses 883   1,184   2,868   1,951 
Transaction and conversion costs 311   654   2,674   1,958 
Employee placement and separation costs 487   4,091   3,073   4,745 
Employee benefit reserve adjustments (100)  (142)  (100)  548 
Communities excluded due to repositioning/lease-up 412   441   1,623   1,570 
Adjusted CFFO$ (1,376) $ 6,916  $ 8,133  $ 36,114 
                

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