After a rough third quarter, a Massachusetts-based senior care provider faces an uncertain future, with the possibility of its shares being delisted from the Nasdaq.
Five Star Senior Living on Wednesday announced that it had tallied a net loss of $21.6 million during the third quarter that ended Sept. 30. On a call with investors, CEO Bruce Mackey noted that its stock price has been below $1 per share for 30 consecutive days, and the stock exchange has informed the company that Five Star could be removed if it is unable regain compliance within the next year.
Mackey also said that the company — which owns or operates 283 senior living communities, including 29 SNFs, comprising 2,505 beds — is low on cash and concerned that it might not be able to meet its operating and debt obligations.
“There are conditions that have raised substantial doubt about our ability to continue as a going concern,” Mackey said.
The company does have options available to raise that capital, including selling some of its facilities. It’s also had discussions with the Senior Housing Properties Trust, the primary owner of its communities, about ways they can work together to stabilize Five Star.
On the Newtown, MA, real estate investment trust’s third-quarter earnings call last week, CEO Jennifer Francis said executives have discussed with Five Star the possibility of selling some skilled nursing facilities to other operators. “We think that would certainly help with their rent coverage,” she told investors.
Mackey said that one of the “biggest negative drivers” to its year-over-year revenue was its skilled nursing segments. They saw a 1.7% decrease in revenue compared to last year, along with a 5.2% decrease in memory care revenues. SNF revenue at comparable communities was down $1.3 million, primarily driven by decreases in occupancy. All told, occupancy at leased SNFs slid 320 basis points compared to last year’s third quarter, down to 76.9%. Numbers were similar at its skilled CCRC units.
“We continue to see pressure at our standalone skilled nursing facilities and the skilled nursing units at our CCRCs,” he said, adding that accountable care organizations and Medicaid managed care are both resulting in decreases to lengths of stay, occupancy and reimbursement.
