Going Concern Problems at Capital Senior Living
Late last Friday, Capital Senior Living announced that it expects to disclose its first quarter earnings results before the market opens on May 21, and then hold its conference call with analysts. It will not be pretty. Also late Friday, the company filed an 8-K with the SEC stating that the coronavirus was taking its toll, and we quote: “The sudden onset of COVID-19 has had a significant adverse impact on occupancy levels, revenues, expenses and operating results at our communities. Although we are unable to predict the full nature and extent of the impact of COVID-19 at this time, we expect COVID-19 will continue to have a significant adverse effect on our business, financial... Read More »
Capital Senior Living Files Registration Statement
At the end of last week, Capital Senior Living filed an S-3 registration statement for the issuance of up to $150 million in various securities. And when we say “various,” we mean it. It could be common stock, preferred stock, senior debt, subordinated debt, depositary shares, warrants, rights, units, purchase contracts…you name it. What we don’t know is if this was just a formality, with this shelf registration statement replacing an old one that was expiring. If so, no big deal. If not, and if they might issue new debt, stock or other securities, that could be a troublesome sign. After their fourth quarter earnings call, we felt a little better about their prospects, with... Read More »
Capital Senior Living Finally Reports
After a two-week delay, Capital Senior Living reports fourth quarter results, and a little of first quarter. After delaying its fourth quarter earnings release by two weeks, Capital Senior Living finally produced the results. And they were not as bad as we expected. Phew. To be honest, I was thinking it could be so bad that bankruptcy would be floated as an option. Not this quarter. The bottom line is that the fourth quarter was not good, with same-community year-over-year occupancy declining by 290 basis points to 81.4%, and the operating margin falling by 600 basis points to 29%. Both are very large drops in a 12-month time frame. And both are worse than their peer group. The good news... Read More »
Genesis HealthCare Sees Share Value Rebound
It’s no surprise that Genesis HealthCare has seen a significant drop in its share value as a result of Covid-19. The company owns and operates facilities that care for a medically-complex population that is most vulnerable to the virus, which is a huge risk in itself. The horrifying situation at a Life Care Centers facility in Kirkland, Washington, where 129 cases of Covid-19 have been confirmed (81 residents, 34 staff members and 14 visitors) and 35 people have died (more than half of the state’s total), has also colored the image of SNFs in this situation, probably contributing to the flight of capital from the sector’s stocks. During the massive... Read More »