Five Star Quality Care (FVE) Tops Q4 EPS by 13c, Beats on Revenues

Note: EPS may not be comparable

Five Star Quality Care (NASDAQ: FVE) reported Q4 EPS of ($0.02), $0.13 better than the analyst estimate of ($0.15). Revenue for the quarter came in at $348.29 million versus the consensus estimate of $345.86 million.

Financial Results for the quarter ended December 31, 2017:

• Senior living revenue for the fourth quarter of 2017 decreased 0.6% to $279.2 million from $281.0 million for the same period in 2016, primarily due to an estimated $0.9 million revenue reserve recorded in the fourth quarter of 2017 in connection with the previously disclosed 2017 Medicare compliance assessment, or the 2017 Compliance Assessment, at one of Five Star's skilled nursing facilities, or SNFs, and a decrease in occupancy, partially offset by an increase in average monthly rates to residents who pay privately for services. Management fee revenue for the fourth quarter of 2017 increased 4.5% to $3.5 million from $3.4 million for the same period in 2016, primarily due to an increase in the number of managed communities compared to the same period in 2016.
• Net loss for the fourth quarter of 2017 was $1.0 million, or $0.02 per diluted share, compared to net loss of $5.6 million, or $0.11 per diluted share, for the same period in 2016. Net loss for the fourth quarter of 2017 included a gain on sale of senior living communities of $7.3 million, or $0.15 per diluted share, in connection with the sale of two senior living communities in December 2017 pursuant to a transaction agreement Five Star entered with Senior Housing Properties Trust (SNH), or the 2017 Transaction Agreement. Net loss for the fourth quarter of 2017 also included a benefit from income taxes of $3.2 million, or $0.07 per diluted share, resulting primarily from Five Star’s monetization of alternative minimum tax credits, $1.5 million, or $0.03 per diluted share, for estimated revenue reserve, penalties and fees related to the 2017 Compliance Assessment, and $1.6 million, or $0.03 per diluted share, related to long lived asset impairment Five Star recorded to reduce the carrying value of one senior living community classified as held for sale to its estimated fair value less costs to sell. Net loss for the fourth quarter of 2016 included a benefit from income taxes of $0.5 million, or $0.01 per diluted share, related to a reduction of previously accrued estimated state tax expense.
• Earnings from continuing operations before interest, taxes, depreciation and amortization, or EBITDA, for the fourth quarter of 2017 was $5.8 million compared to $3.5 million for the same period in 2016. EBITDA excluding certain items noted in the supplemental information provided below, or Adjusted EBITDA, was $2.1 million and $3.5 million for the fourth quarters of 2017 and 2016, respectively. A reconciliation of loss from continuing operations determined in accordance with U.S. generally accepted accounting principles, or GAAP, to EBITDA and Adjusted EBITDA for the quarters ended December 31, 2017 and 2016 appears later in this press release.

For earnings history and earnings-related data on Five Star Quality Care (FVE) click here.

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