Assisted Living Concepts sold for $278M to TPG
Assisted Living Concepts to be acquired by investment firm TPG in $278 million deal
Associated PressAssociated Press – 1 hour 43 minutes ago
Symbol Price Change
ALC 11.85 2.15
MENOMONEE FALLS, Wis. (AP) -- Senior living facility operator Assisted Living Concepts Inc. said Tuesday it agreed to by acquired by private investment firm TPG for about $280 million.
Assisted Living Concepts said TPG agreed to buy it for $12 per Class A share and $12.90 per Class B share. That comes to approximately $278.3 million in cash based on the company's most recent share count. ALC said its board has unanimously approved the sale, and so has the special committee that was reviewing the company's strategy.
Shares of Assisted Living Concepts jumped $2.18, or 22.5 percent, to $11.88 in midday trading. The stock is down 45 percent since May 10, when the company said it would delay is first-quarter report because it had found possible irregularities related to leases.
Assisted Living Concepts runs 210 facilities in 20 states. The company has been reviewing its strategy and is trying to address operational problems that have hurt its admissions. It fired CEO Laurie Bebo at the end of May and hired Dr. Charles H. "Chip" Roadman II, a former surgeon general of the U.S. Air Force, as its interim CEO.
The company also took a loss over the first nine months of the year because of legal and regulatory costs, lease termination costs, and other charges. Its revenue fell 2 percent to $171.4 million over that period.
These guys r one of my big accounts in the Pac NW...
Wish u luck
Big news?! I haven't followed ALC for a couple of months as I have a sizable investment in SRZ.
HERE IT COMES TOO...! HUGE NEWS
Looking at the 3-year performance, this baby was at $60 before the big stock tumble.
Lots of headroom.
Nice comeback from the low of the day.
looking set up here too bro!
still priced right here SSB, imo
the trend is starting to look great for a nice reversal!
Form 8-K for ASSISTED LIVING CONCEPTS INC
Change in Directors or Principal Officers
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. Director Option/SAR Grants
On May 5, 2008, the board of directors of Assisted Living Concepts, Inc. (the "Company") granted awards of tandem non-qualified stock options and stock appreciation rights ("Options/SARs") to the Company's non-management directors (Alan Bell, Jesse Brotz, Derek H.L. Buntain, David J. Hennigar, Malen S. Ng, Mel Rhinelander, Charles H. Roadman II, MD, and Michael J. Spector) pursuant to the 2006 Omnibus Incentive Compensation Plan (the "2006 Omnibus Plan"). Each non-management director was granted 20,000 Options/SARs. The aggregate number of Options/SARs granted was 160,000.
The Options/SARs become exercisable in one-third increments on the first, second and third anniversaries of the grant date. Once exercisable, awards may be exercised either by purchasing shares of the Company's Class A common stock at the exercise price or exercising the stock appreciation right. The Committee has sole discretion to determine whether stock appreciation rights are settled in shares of Class A common stock, cash or a combination of shares of Class A common stock and cash. The Options/SARs have an exercise price of $6.42 per share, the closing price of the Company's Class A common stock on the New York Stock Exchange on May 7, 2008, the second business day following the Company's public release of quarterly financial results, and expire five years from the date of grant.
This summary does not purport to be complete and is subject to and qualified in its entirety by reference to the text of the 2006 Omnibus Plan and the form of Tandem Stock Option/Stock Appreciation Rights Award Agreement, which are filed as Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on Form 8-K and incorporated herein by reference. Executive Retirement Plan
On May 5, 2008, the board of directors of the Company approved amendments to the Company's Executive Retirement Plan to conform the Executive Retirement Plan to the requirements of Internal Revenue Code Section 409A. Under the Executive Retirement Plan, the Company makes a book entry to an account each month equal to 10% of the participant's base monthly salary. Participants are not allowed to make contributions to the Executive Retirement Plan. A participant's account is credited with deemed earnings as if it were invested in investment funds designated by the participant from a list of funds determined by the plan administrator. Participants' interests in the accounts vest according to the number of years of employment with the Company as follows: 20% after two years; 40% after three years; 70% after four years; and 100% after five years. A participant's interest in an account also vests upon the death or disability of the participant. During employment amounts are payable from an executive's account only in the case of financial hardship due to unforeseen emergency. Following a participant's separation from the Company for any reason, the participant's vested interest in the account is paid to the participant (or the participant's beneficiary in the event of the participant's death) either in a lump sum or in five, ten or twenty annual installments, as elected by the participant. Payments for reasons other than death or disability are not started until at least six months after separation. Each of the Company's executive officers participates in the Executive Retirement Plan. As of May 5, 2008, the executive officers were vested in their accounts as follows: Ms. Bebo, 100%; Mr. Buono, 0%; Mr. Fonstad, 0%; and Mr. Levonowich, 100%.
This summary does not purport to be complete and is subject to and qualified in its entirety by reference to the text of the Executive Retirement Plan, as amended, which is filed as Exhibit 10.3 to this Current Report on Form 8-K and incorporated herein by reference.
Deferred Compensation Plan
On May 5, 2008, the board of directors of the Company approved amendments to the Company's Deferred Compensation Plan to conform the Deferred Compensation Plan to the requirements of Internal Revenue Code Section 409A. Under the Deferred Compensation Plan, designated key employees, including each of the Company's executive officers, may elect annually to defer up to 10% of their base salaries. Compensation deferred is retained by the Company and credited to participants' deferral accounts. The Company credits certain participants' (including each of the executive officers') accounts with matching contributions equal to 50% of participants' elective deferrals. Participants are fully vested in their deferral accounts as to amounts they elect to defer. Participants' interests in amounts the Company credits to their accounts as matching contributions vest according to the number of years of employment with the Company as follows: 20% after two years; 40% after three years; 70% after four years; and 100% after five years. The deferral and matching accounts are credited with interest at the prime rate. During employment amounts are payable from an executive's account only in the case of financial hardship due to unforeseen emergency. Following a participant's separation from the Company for any reason, the participant's vested interest in the account is paid to the participant (or the participant's beneficiary in the event of the participant's death) either in a lump sum or in five, ten or twenty annual installments, as elected by the participant. Payments for reasons other than death or disability are not started until at least six months after separation.
This summary does not purport to be complete and is subject to and qualified in its entirety by reference to the text of the Deferred Compensation Plan, as amended, which is filed as Exhibit 10.4 to this Current Report on Form 8-K and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
10.1 2006 Omnibus Incentive Compensation Plan (incorporated by reference to
Exhibit 10.4 to Current Report of Assisted Living Concepts, Inc. on Form
8-K dated November 10, 2006, File No. 001-13498)
10.2 Form of Director Tandem Stock Option/Stock Appreciation Rights Award
10.3 Executive Retirement Program, as amended May 5, 2008
10.4 Deferred Compensation Plan, as amended May 5, 2008
Sector Wrap: Assisted living center operators
Friday May 9, 3:08 pm ET
Housing slump, weak economy pressuring occupancy rates at assisted living center operators
NEW YORK (AP) -- Shares of most senior housing operators declined Friday, as analysts said a protracted slowdown in the residential market threatens to continue slowing growth in the sector.
As housing prices continue to fall and sales stagnate, many retirees are choosing to remain in their homes rather than sell for a meager profit or even at a loss. This has meant fewer aging baby boomers are moving into assisted living communities.
Seattle-based Emeritus Corp., which provides assisted living and Alzheimers and related dementia care services, late Thursday reported a first-quarter loss that more than doubled to $26 million, or 67 cents per share, on revenue of $186.5 million.
Analysts had expected a smaller loss of 55 cents per share on higher revenue of $191 million. The company also lowered its revenue outlook for 2008 to a range of $760 million to $775 million from prior estimates of $780 million to $795 million.
Stifel Nicolaus analyst Jerry Doctrow said Emeritus warned that move-ins remain flat in the second quarter and that expansions and development will drag on occupancy. Shares of the Seattle-based company fell $1.92, or 8 percent, to $22.10 in afternoon trading on triple average volume.
Meanwhile, Jefferies analyst Frank G. Morgan thinks Sunrise Senior Living Inc.'s preliminary quarterly results were "quite impressive," given recent industry headwinds and weak reports from other senior living providers.
"While strong rate growth was largely responsible for the increase in the top-line, occupancy was relatively stable in what has been a tough quarter for the company's peers," Morgan wrote. Sunrise said Thursday it has not seen any impact on move-in activity or attrition related to the economic slowdown, and indicated that it currently has 40 development projects under construction and another 100 under contract.
Shares of McLean, Va.-based Sunrise slipped 9 cents to $23.07.
Goldman analyst Jonathan Habermann said Brookdale Senior Living posted solid quarterly results Wednesday despite soft housing markets. But he maintained a "Neutral" rating and $24 price target on the stock, believing that Brookdale's cash flow growth may moderate slightly in the near-term due to the slowing economy and higher integration expenses in the first half of the year.
"That said, the supply and demand dynamics for senior housing remain favorable longer-term in our view and we believe that BKD is well-positioned as the largest senior housing operator," Habermann wrote in a note to clients.
Jefferies' Morgan also said Brookdale generated better-than-expected revenue in the first quarter even though occupancy remains challenging in this economic environment. With management affirming expectations for improving occupancy in the second half of the year, Morgan thinks the stock is undervalued.
He maintained a "Buy" rating and $34.50 price target. Chicago-based Brookdale Senior Living Inc. shares fell 69 cents, or 2.7 percent, to $25.17.
Dallas-based Capital Senior Living Corp. on Tuesday reported quarterly results which missed Wall Street's earnings per share forecast by a penny. The company said occupancy is seeing continued modest pressure from the broader housing market and economy, and Stifel's Doctrow notes that rents continue to increase at a higher rate than expenses.
Doctrow thinks the biggest issue for Capital Senior investors is the status of the company's pursuit of strategic alternatives now that it has agreed to add two independent directors to its board and consider a possible sale.
shares rose 12 cents to $7.89.
Shares of Menomonee Falls, Wis.-based Assisted Living Concepts Inc. fell 4 cents to $6.47, continuing a downward run sparked by the company's earnings report Monday. Assisted Living met Wall Street profit estimates for the quarter, but said occupied private pay units declined 3.2 percent from the end of the fourth quarter, and occupied Medicaid units declined 15.4 percent.
The company said it believes more and more private pay residents are now moving out of its facilities to be cared for at home by relatives due to the weaker economy, which is spurring layoffs and concerns about family budgets, rather than from a desire by private pay residents to preserve the option of switching to Medicaid in the future.
Stifel's Doctrow says Assisted Living is intentionally reducing its Medicaid census but has not yet shown the ability to refill these units with private-pay residents, a key part of the company's strategy. He kept a "Hold" rating on the stock.
Form 10-Q for ASSISTED LIVING CONCEPTS INC
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. Forward-looking statements are subject to risks, uncertainties and assumptions which could cause actual results to differ materially from those projected, including those risks, uncertainties and assumptions described or referred to in Item 1A - Risk Factors in Part I of the Company's Annual Report on Form 10-K for the year ended December 31, 2007, and in Part II, Item 5 - Other Information - Forward-Looking Statements and Cautionary Factors in this report.
The following discussion should be read in conjunction with our condensed consolidated financial statements and the related notes to the condensed consolidated financial statements in Part I, Item 1 of this report. Executive Overview
In the first quarter of 2008 we increased our average private pay occupancy by 412 units over the first quarter of 2007. The increase in occupied private pay units resulted from acquiring 481 occupied private pay units in the January 1, 2008 acquisition of the operations of BBLRG, LLC doing business as Cara Vita (the "Cara Vita Acquisition") and 85 occupied private pay units from the July 20, 2007 acquisition of a newly built residence in Dubuque, Iowa (the "Dubuque Acquisition" and together with the Cara Vita Acquisition, the "Acquisitions"), partially offset by a reduction in our same residence portfolio of 154 occupied private pay units. Compared to the fourth quarter of 2007, our private pay occupancy increased by 315 units of which 481 were attributable to the Cara Vita Acquisition, partially offset by a reduction in our same residence portfolio of 166 private pay units.
In the first quarter of 2008, we continued to reduce the number of units available to Medicaid residents. As compared to the first quarter of 2007 we reduced our occupied Medicaid units by 868 units. We exited Medicaid contracts at an accelerated pace in 2007, primarily in response to actions by the State of Texas to initiate a managed Medicaid system. Had the State of Texas not initiated managed Medicaid service agreements through third parties, we would not have allowed our traditional Medicaid contracts to lapse during the first half of 2007. Although the accelerated phase of our exit from Medicaid contracts in Texas is complete, our Medicaid census continues to decline because we no longer accept new Medicaid residents and only allow private pay residents to rollover into the Medicaid program in a very limited number of residences. Compared to the fourth quarter of 2007, our number of units occupied by Medicaid residents was reduced by 159 units.
We believe our strategy to reduce the number of units available to Medicaid residents has also impacted our private pay population. As discussed above, in the first quarter of 2008 we had a reduction of 154 private pay occupied units on a same residence basis. We believe this reduction largely represents private pay residents who resided in our residences with the intention of rolling into Medicaid programs. We believe our strategy to no longer allow Medicaid rollovers resulted in their accelerated move out as they relocated into residences that accept rollovers to Medicaid programs. Comparing the first quarter of 2008 to the first quarter of 2007, 186 of the reduction in private pay units occurred at residences with Medicaid contracts or where we recently ended Medicaid contracts. Over that same time period, our private pay occupancy at residences that do not accept Medicaid increased by 32 units. The reduction from these circumstances is referred to in this report as the "Private Pay Impact".
Looking at the 166 private pay unit reduction in the first quarter of 2008 as compared to the fourth quarter of 2007, the Private Pay Impact moderated with 97 of the reduction in private pay units occurring at residences with Medicaid contracts or residences where we recently ended Medicaid contracts. Over that same time period, our private pay occupancy at residences that do not accept Medicaid decreased by 69 units. During this period we continued to experience a high level of private pay resident move outs without the corresponding expected number of move-ins.
To the extent we have not been able to immediately fill vacancies with private pay residents, reducing the Medicaid population has resulted in reductions to our overall occupancy. We believe it is a necessary part of our long-term strategy to improve the overall revenue base. In the first quarters of 2008 and 2007, the average occupancy rate for all of our residences was 71.7% and 83.7%, respectively, and private pay revenues as a percent of total revenues were 90.6% and 81.4%, respectively.
We plan to grow our revenue and operating income by:
† increasing the overall size of our portfolio through additions to existing residences and acquisitions;
† increasing our occupancy rate and the percentage of revenue derived from private pay sources; and
Tuesday, May 6, 2008 - 2:56 PM CDT
Assisted Living posts higher revenue
The Business Journal of Milwaukee
Assisted Living Concepts Inc. reported that its net income declined in the first quarter, but its revenue increased due to the acquisition of eight assisted living centers.
The Menomonee Falls assisted living center operator said net income for the quarter was $4.1 million, or 6 cents per share, compared with $4.7 million, or 7 cents per share, for the same period a year ago. Revenue increased 5 percent to $60.2 million from $57.5 million.
Net income declined because of higher amortization and depreciation expense and other expenses. Occupancy rates declined to an average of 71 percent in the first quarter, compared with 84 percent in the same period last year. However, the percentage of its revenue coming from private payers -- a more profitable resident as opposed to those covered by Medicaid -- rose to 90 percent, the firm said.
Overall revenue growth was largely driven by the acquisition of eight assisted living residences doing business as Cara Vita. The residences were 90 percent occupied with all private pay residents at the time of the $14.5 million acquisition.
As of March 31, Assisted Living Concepts (NYSE: ALC) operated 216 assisted living residences representing 9,076 units.
Assisted Living Concepts, Inc. Announces 2008 First Quarter Results; Reports Improved Mix and Margins
Monday May 5, 4:01 pm ET
MENOMONEE FALLS, WI--(MARKET WIRE)--May 5, 2008 --
-- Private pay mix as a percent of revenue exceeds 90%
-- Adjusted EBITDAR as a percent of revenue exceeds 30%
-- Expansion program construction begins -- on target for fourth quarter
Assisted Living Concepts, Inc. ("ALC") (NYSE:ALC - News) reported net income of $4.1 million in the 2008 first quarter as compared to net income of $4.7 million in the 2007 first quarter.
Diluted earnings per common share for the first quarter of 2008 were $0.06 per share as compared to $0.07 per share for the first quarter of 2007.
"Despite lower same store overall occupancy, we improved revenues and adjusted EBITDAR through strategic acquisitions and cost reductions due to lower Medicaid occupancy," commented Laurie Bebo, President and Chief Executive Officer of Assisted Living Concepts, Inc. "In addition, we are excited to announce we are in the construction phase of our expansion program and expect to begin occupying new additions by the fourth quarter of 2008. To date, costs are in line with our original estimates."
Effective January 1, 2008, ALC completed the acquisition of the operations of BBLRG, LLC doing business as Cara Vita, consisting of eight assisted living residences and a total of 541 leased residences for a purchase price (including expenses) of $14.5 million. On January 1, 2008, the Cara Vita residences had 481 occupied units, all private pay. The properties associated with the residences are leased with an initial term expiring in March 2015 with three five-year renewal options. Results of the operations of the Cara Vita residences are included in the 2008 financial data beginning January 1, 2008. ALC does not anticipate making significant operational changes at the Cara Vita residences; however, certain general and administrative expenses are expected to be managed at reduced cost.
Certain non-GAAP financial measures are used in the discussions in this release in evaluating the performance of the business. See attached tables for definitions of adjusted EBITDA and adjusted EBITDAR, reconciliations of net income to adjusted EBITDA and adjusted EBITDAR, calculations of adjusted EBITDA and adjusted EBITDAR as a percentage of total revenues and non-GAAP reconciliation information.
As of March 31, 2008, ALC operated 216 assisted living residences representing 9,076 units.
Quarters ended March 31, 2008, December 31, 2007, March 31, 2007
Revenues of $60.2 million in the first quarter ended March 31, 2008,
-- increased $3.7 million or 6.6% from $56.5 million in the fourth
quarter of 2007 and
-- increased $2.7 million or 4.7% from $57.5 million in the first quarter
Adjusted EBITDA for the first quarter of 2008 was $13.3 million, 22.1% of revenues and
-- increased $0.9 million (6.8%) from $12.5 million and 22.1% of revenues
in the fourth quarter of 2007 and
-- increased $0.3 million (1.9%) from $13.1 million and decreased from
22.7% of revenues in the first quarter of 2007.
Adjusted EBITDAR for the first quarter of 2008 was $18.2 million, 30.3% of revenues and
-- increased $2.2 million (13.7%) from $16.0 million and 28.4% of
revenues in the fourth quarter of 2007 and
-- increased $1.5 million (8.7%) from $16.8 million and 29.2% of revenues
in the first quarter of 2007
Form 8-K for ASSISTED LIVING CONCEPTS INC
Change in Directors or Principal Officers
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Modifications to Employment Agreements with Executive Officers On April 15, 2008, Assisted Living Concepts, Inc. (the "Company") entered into new employment agreements with the executive officers of the Company: Laurie A. Bebo, President and Chief Executive Officer; John Buono, Senior Vice President, Chief Financial Officer and Treasurer; Eric B. Fonstad, Senior Vice President, General Counsel and Corporate Secretary; and Walter A. Levonowich, Vice President and Controller. The agreements were entered into at the direction of the Compensation/Nomination/Governance Committee (the "Committee") of the board of directors of the Company. On March 29, 2008, the Committee authorized the payment of discretionary bonuses to the executive officers of the Company conditioned upon the agreement of the executive officers to modifications to the terms of their employment agreements. In general, the modifications: (i) expand the "good cause" provision for employee termination to include "fraud, dishonesty and misconduct affecting job performance," "willful violation of any material company policy," and breach of, negligence with respect to, or the failure or refusal by the executive officer to perform and discharge his or her duties, responsibilities or obligations under the agreement or as defined by the Company as reasonably determined by the board of directors in its discretion, where such breach, neglect, failure or refusal is not corrected within 30 days following written notice to the executive officer as reasonably determined by the board of directors in its discretion; (ii) change the basis under which an executive officer would have "good reason" to terminate the agreement to be either if the corporate office moves more than 50 miles or if the executive officer's base salary is reduced by 5% or more, in either instance, if the executive officer notifies the Company in writing within 30 days of the change that he or she objects to the change and the Company does not rescind the change within 30 days of receiving the executive officer's notice; and (iii) change the termination benefits that would be paid so that they would be paid to the executive officer on a salary continuance basis for 12 months (24 months in the case of the Chief Executive Officer) instead of a lump sum payout and so that one year's base salary (two years' base salary in the case of the Chief Executive Officer) and 150% (300% in the case of the Chief Executive Officer) of maximum cash bonus would be paid along with other benefits the executive officer would have received in the year (car allowance, deferred compensation, executive retirement plan, etc.)(two years in the case of the Chief Executive Officer) following termination of employment. Additionally, COBRA payments for insurance would be reimbursed to the executive officer for one year (the equivalent of two years in the case of the Chief Executive Officer) unless he or she is able to enroll in a separate group health plan under new employment.
The foregoing description of the modifications to the employment agreements is qualified in its entirety by reference to the text of the employment agreements, which are included as Exhibits 10.1, 10.2, 10.3 and 10.4 to this Current Report and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
CC coming may 5th FYI!
Assisted Living Concepts, Inc. Announces Call-In Information for Annual Shareholders Meeting and Schedules First Quarter Financial Results Conference Call
Wednesday April 16, 3:16 pm ET
MENOMONEE FALLS, WI--(MARKET WIRE)--Apr 16, 2008 -- Assisted Living Concepts, Inc. (NYSE:ALC - News) announced that shareholders and other interested persons who are unable to attend ALC's Annual Meeting of Shareholders to be held at 4:00 p.m. (CT) on Monday, May 5, 2008 will be able to listen to the meeting. The toll-free number to call and listen is 800-230-1085 and the conference name is "Assisted Living Concepts Annual Shareholders Meeting." A taped rebroadcast of the shareholders meeting will be available approximately three hours following the live call on May 5, 2008, until midnight on June 5, 2008, by dialing toll free 800-475-6701, or international 320-365-3844; the access code is 918642.
ALC also announced that it plans to release its 2008 first quarter financial results after the New York Stock Exchange closes on Monday, May 5, 2008. The release will be posted on ALC's website at www.alcco.com. ALC has scheduled a conference call on Tuesday, May 6, 2008 at 10:00 a.m. (ET) to discuss its financial results for the first quarter. The toll-free number for the live call is 800-230-1085, or international 612-288-0340. A taped rebroadcast of the conference call will be available approximately three hours following the live call on May 6, 2008, until midnight on June 6, 2008, by dialing toll free 800-475-6701, or international 320-365-3844; the access code is 918641.
Assisted Living Concepts, Inc. and its subsidiaries operate 216 assisted living residences with capacity for over 9,000 residents in 20 states in the United States. ALC's assisted living residences typically consist of 35 to 60 units and offer residents a supportive, home-like setting and assistance with activities of daily living. ALC employs approximately 4,400 people.
For further information, contact:
Assisted Living Concepts, Inc.
Sr. Vice President and Chief Financial Officer
Phone: (262) 257-8999
Email: Email Contact
Visit ALC's Website @ http://www.alcco.com
agreed! love the charts btw!
yes, pps looking attractive at these prices, imo...
your opinion please
thnx, GL and ttys,