Emeritus Corporation (NYSE: ESC) reported this week its net loss attributable to common shareholders was $35.96 million, or $0.77 per diluted share, compared to the $21.72 million, or $0.49 per share, recorded in the same quarter last year.
The company’s cash from facility operations (CFFO) for the quarter was $18.8 million, or $0.40 per share, compared to $18.5 million, or $0.41 per share from the comparable period in 2012.
Net cash provided by operating activities was also down for the second quarter, reporting $28.33 million compared to $42.32 million from a year ago.
Total operating revenues increased to $475.9 million for the quarter, up 27% from the same period in 2012 when revenues were $375.8 million.
Emeritus attributed the revenue increase to the company’s lease and ownership acquisition of 142 communities in the fourth quarter of 2012 and first quarter of 2013 that the company previously managed for a joint venture, also known as the Blackstone JV Transaction.
During a second quarter earnings call, Emeritus executives also touched on a June 27 agreement to lease 38 senior living communities consisting of approximately 4,400 units currently owned by a joint venture between Health Care REIT and Merrill Gardens—a deal expected to close in the third quarter of 2013.
Additionally, the company said it continues to make progress with Nurse On Call and its corresponding entrance into home health care services initially in the state of Florida.
“The continued integration of home healthcare services into our communities through our Nurse On Call subsidiary is making solid progress, and we look forward to on-boarding 38 high quality communities and benefitting from their operating teams’ experience later in the quarter,” said CEO Granger Cobb.
The acquisition of the Blackstone JV communities and Nurse On Call led to an increase in operating expenses of $319.9 million in the second quarter, compared to the $213.6 million in the same period in 2012.
With regards to the PBS story featuring Emeritus that aired this week, Emeritus stressed its training programs, specifically how they have been developed between managers versus caregivers.
“The reporters resisted our attempts to connect them with the wonderful stories of compassion and nurturing that our 42,000 residents experience every day or with the thousands of family members that have expressed their extreme gratitude to us for the care and support that we provided to their loved ones and to them,” Cobb said.
In the segment, PBS featured an interview with an Emeritus employee who described an eight-hour training program for memory care staff.
Cobb responded that the woman describing Emeritus’ memory care training program in the PBS story was cut off before she could go into all of the components of it, Cobb said.
“We have a robust online training platform, augmented by in-person training and peer mentoring programs,” he said. “And we were able, through this, to track compliance and then measure the effectiveness and monitor the learning outcomes.”
The company has also enrolled close to 60 trainers across the country to interface with the various operations teams at the regional and divisional level, Cobb added.
“And we’ve significantly increased our overall focus on the training side so we’re even repositioning a few people’s kind of responsibilities to free them up to do more training and more mentoring,” he said.
Looking forward, Emeritus’ guidance forecasts community and management fee revenue to be in the range of $1.85 billion to $1.90 billion.
The company also forecasts routine capital expenditures in the range of $28 million to $30 million, and adjusted CFFO in the range of $2.10 to $2.20 per share.
“Our company’s growth over 20 years is a testament to the trust we earn each and every day from our residents and their families,” said Cobb. “Rest assured that our extremely dedicated and compassionate staff are working hard to provide an outstanding customer experience for our residents and families.”
Written by Jason Oliva
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