Capital Senior Living Corp. (CSU) filed Quarterly Report for the period ended 2009-09-30.
Capital Senior Living Corporation is one of the largest providers of senior living services in the United States. The Company currently owns interests in and/or operates 33 communities in 17 states with acapacity of approximately 5000 residents including 17 communities in which it owns interests 15 communities that it manages for third parties. The Company also operates one home health care agency. Capital Senior Living Corp. has a market cap of $132.9 million; its shares were traded at around $4.95 with a P/E ratio of 41.3 and P/S ratio of 0.8. Capital Senior Living Corp. had an annual average earning growth of 11.4% over the past 5 years.
Highlight of Business Operations:
In January 2006, the Company and GE Healthcare formed Midwest I to acquire five senior housing communities from a third party. Midwest I is owned approximately 89% by GE Healthcare and 11% by the Company. As of September 30, 2009, the Company has contributed $2.7 million for its interest in Midwest I. Midwest I paid approximately $46.9 million for the five communities. The five communities comprise 293 assisted living units with a resident capacity of 389. The Company manages the five acquired communities under long-term management agreements with Midwest I. The Company accounts for its investment in Midwest I under the equity method of accounting and the Company recognized earnings in the equity of Midwest I of $0.1 million in each of the nine months ended September 30, 2009 and 2008. In addition, the Company earned $0.4 million in management fees on the Midwest I communities in each of the nine months ended September 30, 2009 and 2008.
In August 2006, the Company and GE Healthcare formed Midwest II to acquire three senior housing communities from a third party. Midwest II is owned approximately 85% by GE Healthcare and 15% by the Company. As of September 30, 2009, the Company has contributed $1.6 million for its interest in Midwest II. Midwest II paid approximately $38.2 million for the three communities. The three communities comprise 300 assisted living and memory care units with a resident capacity of 319. The Company manages the three acquired communities under long-term management agreements with Midwest II. The Company accounts for its investment in Midwest II under the equity method of accounting and the Company recognized earnings (losses) in the equity of Midwest II of $0.1 million and ($0.1) million in the nine months ended September 30, 2009 and 2008, respectively. In addition, the Company earned $0.4 million in management fees on the Midwest II communities in each of the nine months ended September 30, 2009 and 2008.
In May 2007, the Company and SHPIII formed SHPIII/CSL Miami to develop a senior housing community in Miamisburg, Ohio. Under the joint venture and related agreements, the Company earns development and management fees and may receive incentive distributions. The senior housing community consists of 101 independent living units and 45 assisted living units and was opened in August 2008. As of September 30, the Company has contributed $0.8 million to SHPIII/CSL Miami for its 10% interest. The Company accounts for its investment in SHPIII/CSL Miami under the equity method of accounting and the Company recognized a loss in the equity of SHPIII/CSL Miami of ($0.1) million for the nine months ended September 30, 2009. During the first nine months of fiscal 2009 and 2008, the Company earned $0.1 million and $25,000, respectively, in management fees from SHPIII/CSL Miami. In addition, during the first nine months of fiscal 2008, the Company earned $0.3 million in development fees and $0.1 million in pre-marketing fees on the community.
In November 2007, the Company and SHPIII formed SHPIII/CSL Richmond Heights to develop a senior housing community in Richmond Heights, Ohio. Under the joint venture and related agreements, the Company earns development and management fees and may receive incentive distributions. The senior housing community consists of 96 independent living units and 45 assisted living units and opened for business on April 1, 2009. As of September 30, 2009, the Company has contributed $0.8 million to SHPIII/CSL Richmond Heights for its 10% interest. The Company accounts for its investment in SHPIII/CSL Richmond Heights under the equity method of accounting and the Company recognized a loss in the equity of SHPIII/CSL Richmond Heights of ($0.1) million for the nine months ended September 30, 2009. In addition, during the first nine months of fiscal 2009, the Company earned $0.1 million in management fees and $12,500 in pre-marketing fees from SHPIII/CSL Richmond Heights. During the first nine months of fiscal 2008, the Company earned $1.0 million in development fees and $25,000 in pre-marketing fees on the community.
In December 2007, the Company and SHPIII formed SHPIII/CSL Levis Commons to develop a senior housing community near Toledo, Ohio. Under the joint venture and related agreements, the Company earns development and management fees and may receive incentive distributions. The senior housing community consists of 101 independent living units and 45 assisted living units and opened for business on April 1, 2009. As of September 30, 2009, the Company has contributed $0.8 million to SHPIII/CSL Levis Commons for its 10% interest. The Company accounts for its investment in SHPIII/CSL Levis Commons under the equity method of accounting and the Company recognized a loss in the equity of SHPIII/CSL Levis Commons of ($0.1) million for the nine months ended September 30, 2009. In addition, during the first nine months of fiscal 2009, the Company earned $0.1 million in management fees and $12,500 in pre-marketing fees from SHPIII/CSL Levis Commons. During the first nine months of fiscal 2008, the Company earned $1.1 million in development fees and $25,000 in pre-marketing fees on the community.
In August 2004, the Company acquired from Covenant all of the outstanding stock of Covenant’s wholly owned subsidiary, CGIM. The Company paid approximately $2.3 million in cash (including closing costs of approximately $0.1 million) and issued a non-interest bearing note with a fair value of approximately $1.1 million (face amount $1.4 million discounted at 5.7%), subject to various adjustments set forth in the purchase agreement, to acquire all of the outstanding stock of CGIM. This acquisition resulted in the Company assuming the management contracts on 14 senior living communities with a combined resident capacity of approximately 1,800 residents. The acquisition was accounted for as a purchase and the entire purchase price of $3.5 million was allocated to management contract rights. As of September 30, 2009, the Company managed one community under the management agreement with CGIM.
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