Five Star Quality Care Q1 Profits Up, Occupancy Down

Five Star Quality Care (NYSE AMEX: FVE) announced last week its first quarter 2009 highlights that showed and increase in revenue by 14% over last year’s quarter to $295 million. The company posted $25.4 million of net income that was primarily composed of a $3.5 million unrealized gain on holdings of auction rate securities; a $2.9 million loss due to the impairment of investments in certain marketable securities held by the company’s captive insurance companies; a $25.1 million gain due to early extinguishment of debt; and a $3.5 million loss on the company’s UBS put right related to certain auction rate securities.

The company reported occupancy in its senior living communities decreased from 89.6% in first quarter 2008 to 86.5% during the first quarter of 2009.  Five Star noted that the average daily rates increased by 3% from a year earlier and showed an increase in its revenues from private sources of 3%.   Without the purchase and retirement of the company’s debt, the quarter would have been fairly lackluster.