Assisted Living Concepts may divest New Jersey properties

Menomonee Falls-based Assisted Living Concepts Inc. reported a net loss of $4.0 million in the third quarter, compared with net income of $5.8 million in the same period a year ago.

Excluding one-time charges, net loss in the most recent would have been $0.9 million, the company said.

The company’s quarter revenues were $55.6 million, down from $58.6 million a year earlier.

Assisted Living Concepts announced today that as part of an operational review of certain of its residences and taking into account the recommendation of its Facility Review Committee, it will be commencing a process to divest its seven owned residences in New Jersey.

If the New Jersey residences are divested, the company intends to use the proceeds to pay down its debt. The firm’s board of directors expects the process to be completed in the first quarter of 2013. The board anticipates such a transaction will be accretive to earnings. In the first three quarters of 2012, the owned New Jersey residences had revenues of $2.7 million and a pre-tax loss of $1.1 million.

“I am pleased to report significant progress in the regulatory arena,” said Dr. Charles “Chip” Roadman, president and chief executive officer of the company. “The company has rehired a number of key former and experienced new employees which has resulted in enhanced services to our residents positioning the company for future operating growth. These operating changes at the residence levels have resulted in a positive upward trend in occupancy levels starting in mid-September.”

Meanwhile, the company remains the plaintiff in a class action lawsuit filed on behalf of stock shareholders in U.S. District Court for the Eastern District of Wisconsin. The suit alleges that, unbeknownst to shareholders, the company was in breach of its minimum occupancy covenants and concealed its status by treating unites leased to employees as bona fide rentals by third parties.

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