Assisted Living Concepts (NYSE:ALC) posted a $4 million loss in the third quarter ended Sept. 30, 2012, compared to a net income of $5.8 million one year previously.
Were it not for a slew of One Time Items in the quarter and the nine months ended Sept. 30, ALC’s third-quarter net loss would have been $0.9 million, with a net income of about $11 million in the first nine months of 2012.
Third quarter revenues totaled $55.6 million, down 5.1% compared to last year’s revenues of $58.6 million. Occupancy also declined by more than 370 units to 5,251 units.
Despite the losses, the troubled assisted living provider believes it’s on the path to recovery. Part of that includes appointing a Special Committee of the Board that will continue a strategic review process to “explore corporate alternatives with a view to enhancing shareholder value.”
“I am pleased to report significant progress in the regulatory arena,” commented Dr. Charles “Chip” Roadman, President and Chief Executive Officer. “The Company has rehired a number of key former and experienced new employees which has resulted in enhanced services to our residents positioning the Company for future operating growth. These operating changes at the residence levels have resulted in a positive upward trend in occupancy levels starting in mid-September.”
As part of an operational review of some of Assisted Living Concepts’ communities, the company has decided to begin divesting itself of seven owned residences in New Jersey. If those residences are divested, ALC intends to use the proceeds primarily to pay down debt. The Board of Directors expects the process will be completed in the first quarter of 2013 in a transaction that will be accretive to earnings.
The New Jersey residences in question had revenues of $2.7 million and a pre-tax loss of $1.1 million through the first three quarters of 2012.
Click here to view ALC’s One-Time Items, which include charges related to purchasing 12 properties from Ventas Realty that were previously leased and the write-off of construction costs associated with expansion projects that management has determined will not be completed.
Written by Alyssa Gerace