This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Five Star's CEO Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: FVE

In addition, all 10 communities fall within our current footprint where we offer rehabilitation and wellness services which should drive additional revenues to Five Star. We expect to begin managing these 10 communities before the end of 2012 after all appropriate regulatory approvals are obtained.

The third event took place in July when we announced that we had reached the deal, which is agreement rather to sell our pharmacy business to Omnicare, the net proceeds of $39.9 million. It was a fully marketed transaction by an investment bank Jefferies & Company.

We expect this transaction to close in the second half of 2012 after the completion of customary closing conditions, including licensing approvals. As some of you may know, we entered the pharmacy business in 2003 under a very different environment, where we contemplated achieving margins in the 10% range.

Changes in Medicare billing put great pressure on our margins, as the switch to using generic scripts. And as a result, despite growing to be one of the 10 largest institutional pharmacies in the United States, our pharmacy has only been marginally profitable over the past few years.

However, we expect to generate a gain of approximately $24 million with the sale, which will double our return on investment for our shareholders. We think this is an excellent return on investment for Five Star’s shareholders and set an example of the overall value we believe can be found in Five Star. The sale also simplifies the Five Star story for investors and allows us to increase our focus on our core private pay business.

For the second quarter we generated income from continuing operations of $0.06 per share, after excluding a $0.04 per share gain from the Sunrise litigation settlement, which is $0.04 per share better than income from continuing operations last quarter. Second quarter 2012 also marked Five Star’s 14th consecutive quarter of profitability.

EBITDA adjusted for non-recurring items also improved over the first quarter of 2012 by over 50%, the $13.4 million. EBITDA is also up 6% from last year.

Read the rest of this transcript for free on seekingalpha.com

3 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,678.70 +6.10 0.03%
S&P 500 2,057.09 +5.27 0.26%
NASDAQ 4,771.7630 +13.8840 0.29%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs