assisted living concepts i-a (ALC) Snapshot

Assisted Living Concepts Inc., Special/Extraordinary Shareholders Meeting, May 16, 2013. Agenda: To approve the previously announced merger agreement with affiliates of TPG.

Assisted Living Concepts Inc. reported unaudited consolidated earnings results for the fourth quarter and year ended December 31, 2012. For the quarter, the company reported revenues of $56,980,000 compared with $58,863,000 for the same period last year. Loss from operations was $1,335,000 compared with income of $12,241,000 for the same period last year. Loss before income taxes was $4,697,000 compared with income of $10,559,000 for the same period last year. Net loss was $2,623,000 or $0.11 per diluted share compared with net income of $7,310,000 or $0.31 per diluted share for the same period last year. Adjusted EBITDA was $6,292,000 compared with $18,286,000 for the same period last year. Adjusted EBITDAR was $8,978,000 compared with $22,747,000 for the same period last year. Revenues in the fourth quarter of 2012 decreased from the fourth quarter of 2011 primarily due to a decrease in rented private pay units $2.4 million, and the planned reduction in the number of units rented by Medicaid residents $0.2 million, partially offset by rate increases $0.7 million. Both Adjusted EBITDAR and Adjusted EBITDA decreased in the fourth quarter of 2012 primarily due to an increase in residence operations expenses $8.5 million (this excludes the gain on disposal of fixed assets), an increase in general and administrative expenses $3.4 million (this excludes non-cash equity based compensation) and a decrease in revenue $1.9 million partially offset, for adjusted EBITDA only, a decrease in residence lease expense $1.8 million resulting from the June 15, 2012, purchase of twelve previously leased properties. For the full year, the company reported revenues of $228,397,000 compared with $234,452,000 for the same period last year. Loss from operations was $34,529,000 compared with income of $43,643,000 for the same period last year. Loss before income taxes was $43,543,000 compared with income of $36,460,000 for the same period last year. Net loss was $26,125,000 or $1.14 per diluted share compared with net income of $24,360,000 or $1.05 per diluted share for the same period last year. Cash used in operating activities was $927,000 against cash provided by operating activities of $54,675,000 a year ago. Payments for new construction projects were $2,327,000 against $684,000 a year ago. Payments for purchases of property and equipment were $16,572,000 against 15,067,000 a year ago. Adjusted EBITDA was $42,040,000 compared with $67,824,000 for the same period last year. Adjusted EBITDAR was $55,409,000 compared with $85,510,000 for the same period last year. Revenues in the year ended December 31, 2012 decreased by $6.1 million from the year ended December 31, 2011 primarily due to a decrease in rented private pay units $7.5 million, and the planned reduction in the number of units rented to by Medicaid residents $1.6 million, partially offset by higher average daily revenue from rate increases $2.4 million and one additional day in the 2012 period due to leap year $0.6 million. Average rates increased in the year ended December 31, 2012 by 1.5% over average rates for the year ended December 31, 2011. Both adjusted EBITDA and adjusted EBITDAR decreased in the year ended December 31, 2012 primarily from an increase in residence operations expenses $17.2 million (this excludes the gain on disposal of fixed assets and write-off of construction costs), a decrease in revenues, and an increase in general and administrative expenses $6.8 million (this excludes non-cash equity based compensation) and, for adjusted EBITDA only, a decrease in residence lease expense $4.3 million.

Assisted Living Concepts Inc. reported unaudited consolidated earnings results for the third quarter and nine months ended September 30, 2012. For the quarter, the company reported revenues of $55,576,000 against $58,553,000 for the same period last year. Loss from operations was $4,365,000 against income from operations of $10,843,000 for the same period last year. Loss before income taxes was $6,683,000 against income before income taxes of $9,151,000 for the same period last year. Net loss was $4,042,000 or $0.18 per diluted share against net income of $5,763,000 or $0.25 per diluted share for the same period last year. Adjusted EBITDA was $5,385,000 against $16,895,000 for the same period last year. Adjusted EBITDAR was $8,219,000 against $21,325,000 for the same period last year. Pro forma diluted loss per common share excluding one-time items was $0.04 against pro forma diluted earnings per common share excluding one-time items of $0.24 for the same period last year. Both Adjusted EBITDAR and Adjusted EBITDA decreased in the third quarter of 2012 primarily due to an increase in residence operations expenses of $8.1 million, an increase in general and administrative expenses of $2.0 million and a decrease in revenue of $3.0 million partially offset, for Adjusted EBITDA only, a decrease in residence lease expense of $1.6 million resulting from the June 15, 2012, purchase of twelve previously leased properties. Private pay revenues in the third quarter of 2012 of $55.6 million decreased by $2.5 million from $58.1 million in the third quarter of 2011 and by $1.3 million from the second quarter of 2012. The decrease in overall revenues from the 2011 third quarter resulted from a 377-unit decrease in average occupancy, partially offset by a 1.2% rate increase. The decrease in overall revenues for the 2012 second quarter resulted from a decrease in overall occupancy of 114 units, and a 1.2% decrease in rates. Net income in the third quarter of 2012 included a non-cash write-down of $2.1 million. For the nine months, the company reported revenues of $171,417,000 against $175,589,000 for the same period last year. Loss from operations was $33,194,000 against income from operations of $31,402,000 for the same period last year. Loss before income taxes was $38,846,000 against income before income taxes of $25,901,000 for the same period last year. Net loss was $23,502,000 or $1.02 per diluted share against net income of $17,050,000 or $0.73 per diluted share for the same period last year. Adjusted EBITDA was $35,749,000 against $49,540,000 for the same period last year. Adjusted EBITDAR was $46,432,000 against $62,765,000 for the same period last year. Cash used in operating activities was $9,718,000 against cash provided by operating activities of $41,290,000 for the same period last year. The decrease of $51 million resulted primarily from items associated with the purchase of the Ventas properties, the reduced cash flow by approximately $38 million. Payments for purchases of property and equipment were $13,823,000 against $10,702,000 for the same period last year. Pro forma diluted earnings per common share excluding one-time items were $0.38 against $0.68 for the same period last year. Both Adjusted EBITDA and Adjusted EBITDAR decreased in the nine months ended September 30, 2012 primarily from an increase in residence operations expenses of $8.6 million, a decrease in revenues of $4.2 million and an increase in general and administrative expenses of $3.5 million and, for Adjusted EBITDA only, a decrease in residence lease expense of $2.5 million.