Alerislife inc. announces third quarter 2022 results
Newton, mass.--(business wire)--alerislife inc. (nasdaq: alr) today announced its financial results for the three months ended september 30, 2022. “we continued to make steady progress implementing our plan to improve our operating results and drive efficiencies in our organization throughout the third quarter,” said jeff leer, president and chief executive officer. “owned and managed community occupancy increased 290 basis points and 160 basis points, respectively, or 180 basis points across all residential senior living communities, as we continue to enhance our sales and marketing strategies. we also rounded out our executive team with the addition of heather pereira as our new chief financial officer and philip benjamson as our new chief operating officer. we ended the quarter with sufficient liquidity to execute on our restructuring plan and, following approximately $3.8 million of capital improvements invested in our owned senior living communities in the third quarter, we had $79.1 million of cash at quarter-end and no debt maturities until 2025." third quarter summary of financial results: quarter-end occupancy in alr's owned senior living communities grew 290 basis points, or bps, relative to the end of the second quarter. quarter-end occupancy for the managed portfolio increased 160 bps relative to the end of the second quarter. net loss for the third quarter of 2022 was $8.5 million, or $0.27 per diluted share, which included $1.6 million of costs related to the restructuring plan implemented as a result of alvarez & marsal's, or a&m's, operational review, compared to a net loss of $8.8 million, or $0.28 per diluted share, for the second quarter of 2022, and a net loss of $10.2 million, or $0.32 per diluted share, for the third quarter of 2021, which included a $3.3 million loss from a termination of a lease and $1.2 million of restructuring expenses related to the repositioning of alr's residential service offerings, partially offset by $0.8 million which was reimbursed by diversified healthcare trust, or dhc. earnings before interest, taxes, depreciation and amortization, or ebitda, for the third quarter of 2022 was $(4.1) million compared to $(4.4) million for the second quarter of 2022 and $(7.0) million for the third quarter of 2021. adjusted ebitda, as described further below, was $(0.5) million for the third quarter of 2022 compared to $(1.3) million for the second quarter of 2022 and $(3.3) million for the third quarter of 2021. ebitda and adjusted ebitda are non-gaap financial measures. reconciliations of net loss determined in accordance with u.s. generally accepted accounting principles, or gaap, to ebitda and adjusted ebitda for the third quarter of 2022 and 2021 are presented later in this press release. the reconciliation of net loss to ebitda and adjusted ebitda for the second quarter of 2022 is presented in the form 8-k that alr furnished on august 3, 2022. revpar (resident fee revenues for the corresponding portfolio for the period divided by the average number of available units for the corresponding portfolio for the period, divided by the number of months in the period) for the comparable managed communities for the third quarter of 2022 was $3,200 compared to $3,077 for the second quarter of 2022 and $2,941 for the third quarter of 2021, an increase of 4.0% and 8.8%, respectively. revpar for the comparable owned communities for the third quarter of 2022 was $2,801 compared to $2,560 for the second quarter of 2022 and $2,354 for the third quarter of 2021, an increase of 9.4% and 19.0%, respectively. substantially all of alr's business is conducted by its two segments: (i) its residential segment through its five star senior living, or five star, brand and (ii) its lifestyle services segment primarily through its brands ageility physical therapy solutions and ageility fitness, or collectively ageility, and windsong home health. the following tables present data on the owned and leased and managed senior living communities that alr operates through its five star brand, including comparable community data, as well as data on the rehabilitation locations that alr operates through its ageility brand, including comparable outpatient location data. summary of operational results as of and for the three months ended september 30, 2022 june 30, 2022 september 30, 2021 residential segment: five star: number of living units (end of period) independent living 10,422 10,460 10,628 assisted living 7,734 7,696 9,402 memory care 1,817 1,817 2,454 skilled nursing — — 284 total living units 19,973 19,973 22,768 revpar owned and leased (1) $ 2,801 $ 2,560 $ 2,411 managed $ 3,200 $ 3,077 $ 3,046 quarter end occupancy owned and leased 78.4 % 75.5 % 72.9 % managed 77.0 % 75.4 % 73.8 % comparable communities (2): revpar owned $ 2,801 $ 2,560 $ 2,354 managed $ 3,200 $ 3,077 $ 2,941 quarter end occupancy owned 78.4 % 75.5 % 72.9 % managed 77.0 % 75.4 % 74.6 % operating margin (3): owned (15.9 )% (20.1 )% (24.4 )% managed 4.7 % 8.4 % 7.1 % as of and for the three months ended september 30, 2022 june 30, 2022 september 30, 2021 lifestyle services segment: ageility: number of clinics and locations (4) inpatient clinics 8 10 10 outpatient locations 203 202 223 number of visits (in thousands) inpatient clinics 21 23 20 outpatient locations 156 153 147 comparable outpatient locations (5): caseload as a % of occupancy (6) 24.6 % 24.3 % 24.6 % operating margin (3) (1.2 )% (0.6 )% 10.0 % ___________________________ (1) the three months ended september 30, 2021 includes four leased communities with approximately 200 living units previously leased from healthpeak properties, inc., or healthpeak. the lease with healthpeak was terminated on september 30, 2021. (2) comparable communities includes financial data for 20 owned senior living communities and 120 managed senior living communities that alr continuously owned or managed and operated through its five star brand since july 1, 2021, exclusive of 59 skilled nursing facility, or snf, living units that have been closed in one former continuing care retirement community, or ccrc. (3) operating margin is defined as operating revenue less operating expenses divided by operating revenue in each case for the business segment. for the residential segment, it is inclusive of 59 snf living units, which have been closed in one former ccrc. it is exclusive of provider relief funds from the coronavirus aid, relief, and economic security act, or the cares act, and other government grants recognized as other operating income. in addition, it excludes restructuring expenses for the three months ended september 30, 2021 of $0.2 million for the comparable managed communities. managed operating margin does not represent alr's operating margin and is included to provide supplemental information regarding the operating results of the five star senior living communities from which alr earns residential management fees. (4) during the three months ended september 30, 2022, alr opened six outpatient locations, closed five outpatient locations and closed two inpatient clinics. (5) comparable outpatient locations includes financial data for 185 outpatient rehabilitation locations that alr continuously operated since july 1, 2021. (6) represents the average number of ageility customers divided by average total occupancy at each of the senior living communities where alr operates ageility outpatient rehabilitation locations. occupancy is defined as the average total number of residents residing at the senior living communities. operational review during the quarter ended june 30, 2022, alr engaged the healthcare consulting arm of a&m to provide a comprehensive operational review of alr's business and make recommendations to alr's board of directors. the recommendations made by a&m included general and administrative cost reductions, a corporate reorganization that is designed to enhance accountability and certain operational changes to support team members to ensure the delivery of high-quality experiences to residents and customers and to increase occupancy at alr's senior living communities, as further described below: reduce costs annually by a target of approximately $2.0 million, net of investments to be made of approximately $3.3 million as described below, by: streamlining redundant business processes and reducing investments in non-core functions, rationalizing information technology systems to those that directly support core business functions, ensuring their optimal utilization, and continually assessing general and administrative expenses to identify cost savings opportunities. streamlining redundant business processes and reducing investments in non-core functions, rationalizing information technology systems to those that directly support core business functions, ensuring their optimal utilization, and continually assessing general and administrative expenses to identify cost savings opportunities. invest approximately $3.3 million to refocus on alr's core business and invest strategically in projects, processes and systems that will enhance alr's ability to successfully operate alr's residential and lifestyle services businesses, including: enhancing the executive leadership team with a chief operating officer to oversee field and national operations and a chief financial officer, investing in a scalable and agile national operations infrastructure to drive operational excellence and results, and establishing a centralized sales function with reinstituted regional sales support to focus on both sales and marketing efforts. enhancing the executive leadership team with a chief operating officer to oversee field and national operations and a chief financial officer, investing in a scalable and agile national operations infrastructure to drive operational excellence and results, and establishing a centralized sales function with reinstituted regional sales support to focus on both sales and marketing efforts. based on a&m's operational review, on august 3, 2022, alr announced a restructuring plan which includes the elimination of certain positions in its corporate team. alr expects to complete this restructuring by the middle of 2023. as of the date of this press release, alr made the following progress with respect to the restructuring plan: aligned several functions, including sales, marketing, clinical and resident programming, under the national operations support function; deployed sales support functions to directly support community level sales directors to focus on improved tour to move-in conversion rate; appointed a chief financial officer, effective september 19, 2022, and a chief operating officer, effective october 17, 2022. in addition, alr continues to invest in the sales and marketing function, including hiring a vice president of marketing, effective october 3, 2022, and five sales directors; and implemented approximately $2.6 million of labor and non-labor annual cost savings, net of approximately $1.8 million in labor investments. in addition to the restructuring plan, alr achieved further cost savings of $4.9 million from the elimination of certain unfilled positions. in connection with implementing its restructuring plan, alr expects to incur non-recurring cash expenses of up to $3.0 million. these expenses are expected to include up to $0.4 million of retention payments, up to $2.0 million of severance, benefits and transition expenses and up to $0.6 million of other restructuring expenses. for the three months ended september 30, 2022, alr recognized $1.6 million of expenses related to the restructuring plan, including $0.1 million of retention payments, $1.4 million of severance, benefits and transition expenses, and $0.1 million of other restructuring expenses, which was recorded in restructuring expenses in alr's condensed consolidated statements of operations. additionally, alr recognized costs of $0.6 million related to the implementation of the a&m operational review for the three months ended september 30, 2022, which are recorded in general and administrative expenses in alr's condensed consolidated statements of operations. summary of senior living communities and outpatient rehabilitation locations presented below is a summary of the communities, units, average occupancy, quarter end occupancy, revenues and residential management fees for the five star senior living communities alr manages for dhc, as of and for the three months ended september 30, 2022 (dollars in thousands): total communities units average occupancy quarter end occupancy community revenues (1) management fees independent and assisted living communities 120 17,889 75.3% 77.0% $ 171,684 $ 9,477 ___________________________ (1) managed senior living communities' revenues do not represent alr's revenues and are included to provide supplemental information regarding the operating results of the five star senior living communities from which alr earns residential management fees. presented below is a summary of the ageility outpatient rehabilitation locations alr operated as of and for the three months ended september 30, 2022 (dollars in thousands): as of and for the three months ended september 30, 2022 number of locations total revenue (1)(2) caseload as a % of occupancy (3) ebitda margin (4) outpatient locations in dhc owned communities managed by five star 94 $ 7,789 25.9 % (0.2 )% outpatient locations at alr owned communities 15 868 29.9 % 4.6 % outpatient locations at other communities (5) 94 4,124 21.7 % (8.3 )% total outpatient locations 203 $ 12,781 24.3 % (2.5 )% ___________________________ (1) excludes revenue of $1,590 earned during the three months ended september 30, 2022 for ten ageility inpatient rehabilitation clinics (inclusive of two inpatient rehabilitation clinics that were closed during the three months ended september 30, 2022). (2) total ageility revenue includes fitness revenue. total ageility revenue excludes home health care services, which is part of the lifestyle services segment. (3) represents the average number of ageility customers divided by average total occupancy at each of the senior living communities where alr operates ageility outpatient rehabilitation locations. occupancy is defined as the average total number of residents residing at the senior living communities. (4) ebitda margin is a non-gaap financial measure and represents rehabilitation locations that are in service as of september 30, 2022. a reconciliation of ebitda margin is presented later in this press release. (5) other communities includes outpatient rehabilitation locations at senior living communities not owned or managed by alr. conference call information: at 1:00 p.m. eastern time on november 3, 2022, alr's president and chief executive officer, jeffrey leer, and senior vice president, chief financial officer and treasurer, heather pereira, will host a conference call to discuss alr's third quarter 2022 financial results. the conference call telephone number is (877) 329-4332. participants calling from outside the united states and canada should dial (412) 317-5436. no pass code is necessary to access the call from either number. participants should dial in about 15 minutes prior to the scheduled start of the call. a replay of the conference call will be available through 11:59 p.m. eastern time on november 10, 2022. to hear the replay, dial (412) 317-0088. the replay pass code is 3979235. a live audio webcast of the conference call will also be available in a listen-only mode on alr’s website, www.alerislife.com. participants wanting to access the webcast should visit alr’s website about five minutes before the call. the archived webcast will be available for replay on alr’s website following the call for about a week. the transcription, recording and retransmission in any way of alr's third quarter ended september 30, 2022 financial results conference call are strictly prohibited without the prior written consent of alr. alr’s website is not incorporated as part of this press release. about alerislife: alerislife enriches and inspires the lives of its older adult customers across the united states by delivering an exceptional and enhanced resident experience to senior living residents, while also offering lifestyle services to the younger choice-based consumer. the company is headquartered in newton, massachusetts. for more information, visit www.alerislife.com. alerislife inc. condensed consolidated statements of operations (amounts in thousands, except per share amounts) (unaudited) three months ended september 30, nine months ended september 30, 2022 2021 2022 2021 revenues lifestyle services $ 14,546 $ 15,382 $ 43,330 $ 52,388 residential 17,514 16,320 48,994 49,755 residential management fees 9,477 11,220 27,380 37,997 total management and operating revenues 41,537 42,922 119,704 140,140 reimbursed community-level costs incurred on behalf of managed communities 137,768 177,231 396,352 585,662 other reimbursed expenses 3,354 5,678 10,869 27,750 total revenues 182,659 225,831 526,925 753,552 other operating income 2 — 44 7,795 operating expenses lifestyle services expenses 14,562 13,536 42,112 45,414 residential wages and benefits 10,156 8,547 27,942 30,456 other residential operating expenses 5,804 7,184 18,126 22,418 community-level costs incurred on behalf of managed communities 137,768 177,231 396,352 585,662 general and administrative 17,015 21,817 53,205 66,956 restructuring expenses 1,570 1,220 1,944 16,859 depreciation and amortization 3,088 2,983 9,535 8,912 total operating expenses 189,963 232,518 549,216 776,677 operating loss (7,302 ) (6,687 ) (22,247 ) (15,330 ) interest, dividend and other income 225 84 434 244 interest and other expense (1,474 ) (507 ) (3,757 ) (1,379 ) unrealized (loss) gain on equity investments (1,997 ) 22 (3,679 ) 555 realized gain on sale of debt and equity investments 1,573 — 1,528 193 gain (loss) on termination of lease 498 (3,277 ) 777 (3,277 ) loss before income taxes (8,477 ) (10,365 ) (26,944 ) (18,994 ) (provision) benefit for income taxes (31 ) 164 (99 ) (194 ) net loss $ (8,508 ) $ (10,201 ) $ (27,043 ) $ (19,188 ) weighted average shares outstanding—basic and diluted 31,875 31,618 31,825 31,567 net loss per share—basic and diluted $ (0.27 ) $ (0.32 ) $ (0.85 ) $ (0.61 ) alerislife inc. reconciliation of non-gaap financial measures (dollars in thousands) (unaudited) non-gaap financial measures are financial measures that are not determined in accordance with gaap. alr believes the non-gaap financial measures presented in the tables below are meaningful supplemental disclosures because they may help investors better understand changes in alr’s operating results and its ability to meet financial obligations or service debt, make capital expenditures and expand its business. alr believes that ebitda, adjusted ebitda, ebitda margin and net income (loss) margin also may help investors better understand its financial performance, including by allowing investors to compare alr's performance between periods and against the performance of other companies on both a gaap and non-gaap basis. alr management uses ebitda, adjusted ebitda, ebitda margin and net income (loss) margin to evaluate alr’s financial performance and compare alr’s performance over time and to the performance of other companies. alr calculates ebitda, adjusted ebitda, ebitda margin and net income (loss) margin as shown below or later in this press release. these measures should not be considered as alternatives to net income (loss) or operating income (loss), as indicators of alr’s operating performance or as measures of alr’s liquidity. also, ebitda, adjusted ebitda, ebitda margin and net income (loss) margin as presented may not be comparable to similarly titled amounts calculated by other companies. alr believes that net income (loss) is the most directly comparable financial measure, determined according to gaap, to alr’s presentation of ebitda and adjusted ebitda. the following table presents the reconciliation of these non-gaap financial measures to net income (loss) for the three and nine months ended september 30, 2022 and 2021. three months ended september 30, nine months ended september 30, 2022 2021 2022 2021 net loss $ (8,508 ) $ (10,201 ) $ (27,043 ) $ (19,188 ) add (less): interest and other expense 1,474 507 3,757 1,379 interest, dividend and other income (225 ) (84 ) (434 ) (244 ) provision (benefit) for income taxes 31 (164 ) 99 194 depreciation and amortization 3,088 2,983 9,535 8,912 ebitda (4,140 ) (6,959 ) (14,086 ) (8,947 ) add (less): separation costs (1) — — 1,319 — unrealized loss (gain) on equity investments 1,997 (22 ) 3,679 (555 ) (gain) loss on termination of leases (498 ) 3,277 (777 ) 3,277 transaction costs (2) 574 — 1,278 — net restructuring expenses (3) 1,568 407 1,468 4,515 long-lived asset impairment (4) — — — 890 adjusted ebitda $ (499 ) $ (3,297 ) $ (7,119 ) $ (820 ) ___________________________ (1) costs incurred for the nine months ended september 30, 2022 represent those related to the separation of our former president and chief executive officer during the second quarter of 2022. (2) the three and nine months ended september 30, 2022 includes costs incurred related to the comprehensive operational review by a&m and are included in general and administrative expenses in the condensed consolidated statements of operations. (3) the three and nine months ended september 30, 2022 and 2021 includes (i) costs incurred related to the repositioning of alr's residential service offerings, which are reported net of reimbursed expenses received from dhc of $2 and $476, respectively, for the three and nine months ended september 30, 2022, and $813 and $12,344, respectively, for the three and nine months ended september 30, 2021, and (ii) costs incurred related to the restructuring plan executed as a part of a&m's operational review. all of these costs are included in restructuring expenses in the condensed consolidated statements of operations. (4) the nine months ended september 30, 2021 represents one previously leased community that had a fire on april 4, 2021. alerislife inc. reconciliation of non-gaap financial measures (dollars in thousands) (unaudited) alr believes that net income (loss) is the most directly comparable financial measure, determined according to gaap, to alr’s presentation of ebitda, net income (loss) margin and ebitda margin. the following table presents the reconciliation of these non-gaap financial measures to net income (loss) for the three months ended september 30, 2022 for ageility. three months ended september 30, 2022 lifestyle services: revenue $ 14,546 less: home health services 175 less: inpatient rehabilitation clinics (1) 1,590 total ageility revenue (2) $ 12,781 ageility: net loss $ (413 ) add: depreciation 98 ebitda $ (315 ) net loss margin (3) (3.2 )% ebitda margin (4) (2.5 )% ___________________________ (1) revenue for ten ageility inpatient rehabilitation clinics that were operated by ageility during the three months ended september 30, 2022 (inclusive of two inpatient rehabilitation clinics that were closed during the three months ended september 30, 2022). (2) total ageility revenue includes revenue from outpatient rehabilitation locations and fitness. (3) net loss margin is defined by alr as net loss for the period divided by total revenue for the period. (4) ebitda margin is defined by alr as ebitda for the period divided by total revenue for the period. alerislife inc. condensed consolidated balance sheets (dollars in thousands, except per share amounts) (unaudited) september 30, december 31, 2022 2021 assets current assets: cash and cash equivalents $ 79,126 $ 66,987 restricted cash and cash equivalents 21,317 24,970 accounts receivable, net 9,676 9,244 due from related person 56,497 41,664 debt and equity investments, of which $7,100 and $7,609 are restricted, respectively 10,890 19,535 prepaid expenses and other current assets 21,817 24,433 total current assets 199,323 186,833 property and equipment, net 162,785 159,843 operating lease right-of-use assets 5,796 9,197 finance lease right-of-use assets 2,773 3,467 restricted cash and cash equivalents 991 982 restricted debt and equity investments 2,715 3,873 other long-term assets 8,155 12,082 total assets $ 382,538 $ 376,277 liabilities and shareholders’ equity current liabilities: accounts payable $ 16,367 $ 37,516 accrued expenses and other current liabilities 44,861 31,488 accrued compensation and benefits 33,413 34,295 accrued self-insurance obligations 26,701 31,739 operating lease liabilities 501 699 finance lease liabilities 1,351 872 due to related persons 2,500 3,879 current portion of debt 437 419 total current liabilities 126,131 140,907 long-term liabilities: accrued self-insurance obligations 27,007 34,744 operating lease liabilities 5,331 9,366 finance lease liabilities 2,351 3,050 long-term debt 67,161 6,364 other long-term liabilities 227 256 total long-term liabilities 102,077 53,780 commitments and contingencies shareholders’ equity: common stock, par value $0.01: 75,000,000 shares authorized, 32,609,009 and 32,662,649 shares issued and outstanding, respectively 326 327 additional paid-in-capital 462,144 461,298 accumulated deficit (308,107 ) (281,064 ) accumulated other comprehensive (loss) income (33 ) 1,029 total shareholders’ equity 154,330 181,590 total liabilities and shareholders' equity $ 382,538 $ 376,277 alerislife inc. residential segment data (dollars in thousands, except per unit amounts) (unaudited) three months ended september 30, june 30, march 31, december 31, september 30, 2022 2022 2022 2021 2021 owned and leased senior living communities revenues $ 17,514 $ 16,094 $ 15,386 $ 14,883 $ 16,320 other operating income (1) 2 — 42 — — operating expenses 20,182 18,861 19,371 18,574 17,895 operating loss (2,666 ) (2,767 ) (3,943 ) (3,691 ) (1,575 ) operating margin (15.2 )% (17.2 )% (25.6 )% (24.8 )% (9.7 )% number of communities (end of period) 20 20 20 20 20 number of living units (end of period) (2) 2,084 2,087 2,100 2,100 2,099 average occupancy 76.0 % 72.5 % 71.0 % 72.0 % 69.9 % quarter end occupancy 78.4 % 75.5 % 72.1 % 72.7 % 72.9 % revpar (3) $ 2,801 $ 2,560 $ 2,443 $ 2,349 $ 2,411 revpor (4) $ 3,604 $ 3,492 $ 3,444 $ 3,192 $ 3,375 managed senior living communities (5): residential management fees $ 9,477 $ 8,971 $ 8,932 $ 9,482 $ 11,220 community-level revenues 171,684 165,179 162,552 161,907 210,160 other operating income (1) 125 75 199 602 786 community-level expenses (6) 164,044 151,906 152,892 159,329 203,756 community operating income 7,765 13,348 9,859 3,180 7,190 community operating margin 4.5 % 8.1 % 6.1 % 2.0 % 3.4 % number of communities (end of period) 120 120 120 121 159 number of living units (end of period) (2) 17,889 17,886 17,899 18,005 20,669 average occupancy 75.3 % 74.1 % 74.1 % 73.7 % 72.2 % quarter end occupancy 77.0 % 75.4 % 74.6 % 74.8 % 73.8 % revpar (3) $ 3,200 $ 3,077 $ 3,027 $ 2,919 $ 3,046 revpor (4) $ 4,158 $ 4,109 $ 4,084 $ 3,875 $ 4,129 ___________________________ (1) other operating income represents income recognized for funds received under the cares act and other government grants. (2) includes living units categorized as in service. as a result, the number of living units may vary from period to period for reasons other than the acquisition or disposition of senior living communities. (3) revpar is defined by alr as resident fee revenues for the corresponding portfolio for the period divided by the average number of available units for the corresponding portfolio for the period, divided by the number of months in the period. data for the three months ended september 30, 2022, june 30, 2022, march 31, 2022, december 31, 2021 and september 30, 2021 exclude income received by senior living communities under the cares act and other government grants. (4) revpor is defined by alr as resident fee revenues for the corresponding portfolio for the period divided by the average number of occupied units for the corresponding portfolio for the period, divided by the number of months in the period. data for the three months ended september 30, 2022, june 30, 2022, march 31, 2022, december 31, 2021 and september 30, 2021 exclude income received by senior living communities under the cares act and other government grants. (5) managed senior living communities, other than alr's residential management fees, represents financial data of senior living communities managed for dhc and does not represent financial results of alr. managed senior living communities' data is included to provide supplemental information regarding the operating results of the senior living communities from which alr earns residential management fees. (6) the three months ended september 30, 2022, june 30, 2022, december 31, 2021 and september 30, 2021 includes restructuring expense of $2, $474, $966, and $813, respectively. alerislife inc. comparable communities residential segment data (dollars in thousands, except per unit amounts) (unaudited) three months ended september 30, june 30, march 31, december 31, september 30, 2022 2022 2022 2021 2021 owned senior living communities (1): number of communities (end of period) 20 20 20 20 20 number of living units (end of period) (2) 2,084 2,087 2,100 2,100 2,099 average occupancy 76.0 % 72.5 % 71.0 % 72.0 % 70.4 % quarter end occupancy 78.4 % 75.5 % 72.1 % 72.7 % 72.9 % revpar (3) $ 2,801 $ 2,560 $ 2,443 $ 2,349 $ 2,354 revpor (4) $ 3,604 $ 3,492 $ 3,444 $ 3,192 $ 3,270 managed senior living communities (1)(5): number of communities (end of period) 120 120 120 120 120 number of living units (end of period) (2) 17,889 17,886 17,899 17,899 17,899 average occupancy 75.3 % 74.1 % 74.1 % 74.1 % 73.4 % quarter end occupancy 77.0 % 75.4 % 74.6 % 75.2 % 74.6 % revpar (3) $ 3,200 $ 3,077 $ 3,027 $ 2,900 $ 2,941 revpor (4) $ 4,158 $ 4,109 $ 4,084 $ 3,831 $ 3,922 ___________________________ (1) includes data for five star senior living communities that alr has continuously owned or managed since july 1, 2021. the summary of operations for comparable communities excludes 59 snf living units that have been closed in one former ccrc that five star presently manages as an assisted living community. (2) includes living units categorized as in service. as a result, the number of living units may vary from period to period for reasons other than the acquisition or disposition of senior living communities. (3) revpar is defined by alr as resident fee revenues for the corresponding portfolio for the period divided by the average number of available units for the corresponding portfolio for the period, divided by the number of months in the period. data for the three months ended september 30, 2022, june 30, 2022, march 31, 2022, december 31, 2021 and september 30, 2021 exclude income received by senior living communities under the cares act and other government grants. (4) revpor is defined by alr as resident fee revenues for the corresponding portfolio for the period divided by the average number of occupied units for the corresponding portfolio for the period, divided by the number of months in the period. data for the three months ended september 30, 2022, june 30, 2022, march 31, 2022, december 31, 2021 and september 30, 2021 exclude income received by senior living communities under the cares act and other government grants. (5) residential segment data for comparable managed senior living communities represents financial data of senior living communities managed for dhc and does not represent financial results of alr. managed senior living communities' data is included to provide supplemental information regarding the operating results of the senior living communities from which alr earns residential management fees. alerislife inc. lifestyle services segment data (dollars in thousands) (unaudited) three months ended september 30, june 30, march 31, december 31, september 30, 2022 2022 2022 2021 2021 lifestyle services (1): revenues $ 14,546 $ 14,645 $ 14,139 $ 15,626 $ 15,382 outpatient 11,837 11,753 11,165 12,848 12,747 fitness 944 941 881 890 853 other 1,765 1,951 2,093 1,888 1,782 operating expenses (2) 14,672 14,438 13,334 14,045 13,348 operating (loss) income (126 ) 207 805 1,581 2,034 operating margin (3) (0.9 )% 1.4 % 5.7 % 10.1 % 13.2 % number of inpatient clinics (end of period) 8 10 10 10 10 number of outpatient locations (end of period) 203 202 201 205 223 number of fitness locations (end of period) 67 76 73 60 61 ___________________________ (1) includes ageility rehabilitation locations and fitness operations as well as home healthcare operations. (2) the three months ended december 31, 2021 and september 30, 2021 includes restructuring expenses of $23 and $(310), respectively. (3) operating margin is defined as operating revenue less operating expenses divided by operating revenue in each period. alerislife inc. comparable lifestyle services segment data (dollars in thousands) (unaudited) three months ended september 30, june 30, march 31, december 31, september 30, 2022 2022 2022 2021 2021 lifestyle services (1)(2): revenues $ 12,183 $ 12,057 $ 11,533 $ 12,892 $ 12,823 outpatient 11,091 10,944 10,520 11,825 11,754 fitness 917 898 835 832 795 other 175 215 178 235 274 operating expenses 12,291 12,095 11,251 11,621 11,563 operating (loss) income (108 ) (38 ) 282 1,271 1,260 operating margin (3) (0.9 )% (0.3 )% 2.4 % 9.9 % 9.8 % number of outpatient locations (end of period) 185 185 185 185 185 number of fitness locations (end of period) 62 73 73 51 57 ___________________________ (1) includes ageility outpatient rehabilitation locations and fitness operations as well as home healthcare operations that alr has continuously operated since july 1, 2021. (2) excludes eight ageility inpatient rehabilitation clinics. (3) operating margin is defined as operating revenue less operating expenses divided by operating revenue in each period. alerislife inc. owned senior living communities as of and for the three months ended september 30, 2022 (dollars in thousands) (unaudited) no. community name state property type (1) living units residential revenues (4) gross carrying value net carrying value date acquired most recent renovation 1 morningside of decatur (2) alabama al 49 $ 414 $ 7,805 $ 4,232 11/19/2004 2021 2 morningside of auburn (2) alabama al 42 415 2,339 1,119 11/19/2004 1997 3 the palms of fort myers (2) florida il 218 1,965 7,452 3,912 4/1/2002 1988 4 five star residences of banta pointe (3) indiana al 121 859 12,052 7,235 9/29/2011 2006 5 five star residences of fort wayne (2) indiana al 154 1,000 9,355 5,726 9/29/2011 1998 6 five star residences of clearwater indiana al 88 400 15,259 9,780 6/1/2011 1999 7 five star residences of lafayette indiana al 109 665 12,406 7,961 6/1/2011 2000 8 five star residences of noblesville (2) indiana al 151 1,232 14,005 8,588 7/1/2011 2005 9 the villa at riverwood (2) missouri il 112 754 5,056 3,231 4/1/2002 1986 10 voorhees senior living (2) new jersey al 91 909 20,591 13,883 7/1/2008 1999 11 washington township senior living new jersey al 93 994 26,586 17,178 7/1/2008 1998 12 carriage house senior living (2) north carolina al 98 1,075 10,065 5,319 12/1/2008 1997 13 forest heights senior living (2) north carolina al 111 875 16,328 10,457 12/1/2008 1998 14 fox hollow senior living (2) north carolina al 74 1,253 26,639 17,816 7/1/2000 1999 15 legacy heights senior living (2) north carolina al 116 895 7,845 3,641 12/1/2008 1997 16 morningside at irving park (2) north carolina al 91 869 3,848 1,565 11/19/2004 1997 17 the devon senior living pennsylvania al 84 566 33,437 14,686 7/1/2008 1985 18 the legacy of anderson (2) south carolina il 101 662 11,840 6,994 12/1/2008 2003 19 morningside of springfield (2) tennessee al 54 565 19,114 11,633 11/19/2004 1984 20 huntington place wisconsin al 127 1,152 2,499 1,502 7/15/2010 1999 total 2,084 $ 17,519 $ 264,521 $ 156,458 ___________________________ (1) al is primarily an assisted living community and il is primarily an independent living community. (2) encumbered property under alr's $95,000 loan. (3) encumbered property under alr's mortgage note having an aggregate principal amount outstanding of $6,659 as of september 30, 2022. (4) excludes funds received under the cares act recognized as other operating income. warning concerning forward-looking statements this press release contains statements that constitute forward-looking statements within the meaning of the private securities litigation reform act of 1995 and other securities laws. also, whenever alr uses words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, "will", “may” and negatives or derivatives of these or similar expressions, alr is making forward-looking statements. these forward-looking statements are based upon alr’s present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. actual results may differ materially from those contained in or implied by alr’s forward-looking statements. forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond alr's control. for example: this press release includes statements regarding the comprehensive operational review performed by a&m and the restructuring plan alr has implemented as a result and has begun to execute. in addition, mr. leer notes the recent additions of alr's chief financial officer and chief operating officer. alr may not be able to successfully execute the restructuring plan on the timing it expects or at all, the costs to implement the restructuring plan may be more than it expects and it may not realize the benefits it anticipates from the restructuring plan. mr. leer refers to the steady progress alr has made in implementing its plan to improve its operating results and drive efficiencies in its organization throughout the third quarter of 2022, noting improvements in occupancy in both alr's owned and managed senior living communities. however, this progress may not continue and its operating results may not improve and occupancy could decline as a result of current economic conditions, including inflation, high interest rates, geopolitical risks and possible economic recession. mr. leer states that alr ended the quarter with sufficient liquidity to execute on the restructuring plan and that it has no debt maturities until 2025. however, the costs to implement the restructuring plan may be more than it anticipates, it may not generate sufficient cash flow from its operations, and its current liquidity may prove to be insufficient. the information contained in alr’s filings with the securities and exchange commission, or sec, including under “risk factors” in alr’s periodic reports, or incorporated therein, identifies other important factors that could cause alr’s actual results to differ materially from those stated in or implied by alr’s forward-looking statements. alr’s filings with the sec are available on the sec’s website at www.sec.gov. you should not place undue reliance upon forward-looking statements. except as required by law, alr does not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.
