929994--3/28/2007--ASSISTED_LIVING_CONCEPTS

related topics

{regulation, government, change}

{capital, credit, financial}

{debt, indebtedness, cash}

{cost, contract, operation}

{acquisition, growth, future}

{cost, operation, labor}

{regulation, change, law}

{financial, litigation, operation}

{stock, price, operating}

{provision, law, control}

{interest, director, officer}

Events which adversely affect the ability of seniors to afford our resident fees could cause occupancy and revenues rates to decline. Events which adversely affect the perceived desirability or safety of our residences to current or potential residents could cause occupancy and revenues to decline. A reduction in the percentage of private pay residents could significantly affect our profitability. Changes or reductions in Medicaid rates could reduce our revenues. Termination of our residency agreements could adversely affect our revenues, earnings and occupancy levels. Labor costs comprise a substantial portion of our operating expenses. An increase in wages, as a result of a shortage of qualified personnel or otherwise, could substantially increase our operating costs. We operate in an industry that has an inherent risk of personal injury claims. If one or more claims are successfully made against us, our financial condition and results of operations could be materially and adversely affected. We self-insure a portion of our workers compensation, health and dental and certain other risks. We operate in a regulated industry. Failure to comply with laws or government regulation could lead to fines and penalties. Compliance with the Americans with Disabilities Act, Fair Housing Act and fire, safety and other regulations may require us to make unanticipated expenditures which could increase our costs and therefore adversely affect our earnings and financial condition. We face periodic reviews, audits and investigations under our contracts with federal and state government agencies, and these audits could have adverse findings that may negatively impact our business. Failure to comply with laws governing the transmission and privacy of health information could materially and adversely affect our financial condition and results of operations. State efforts to regulate the construction or expansion of healthcare providers could impair our ability to expand through construction and redevelopment. Competition for the acquisition of strategic assets from buyers with lower costs of capital than us or that have lower return expectations than we do could limit our ability to compete for strategic acquisitions and therefore to grow our business effectively. Costs associated with capital improvements could adversely affect our profitability. Risk Relating to Our Indebtedness and Lease Arrangements Our credit facilities and existing mortgage loans contain covenants that restrict our operations. Any default under such facilities or loans could result in the acceleration of indebtedness or cross-defaults, any of which would negatively impact our liquidity and inhibit our ability to grow our business and increase revenues. If we do not comply with the requirements prescribed within our leases or debt agreements pertaining to Revenue Bonds, we would be subject to financial penalties. If we do not comply with terms of the leases related to certain of our assisted living residences, or if we fail to maintain the residences, we could be faced with financial penalties and/or the termination of the lease related to the residence. Our indebtedness and long-term leases could adversely affect our liquidity and our ability to operate our business and our ability to execute our growth strategy. Increases in market interest rates could significantly increase the costs of our unhedged debt and lease obligations, which could adversely affect our liquidity and earnings. Risks Relating to Our Class A Common Stock and Our Continuing Relationships with Scotia Investments Limited and Extendicare Our corporate governance documents may delay or prevent an acquisition of us that stockholders may consider favorable. We have only operated as a separate publicly-traded company for a short period of time and our historical financial information may not be a reliable indicator of future results.

Full 10-K form ▸

929994--3/28/2007--ASSISTED_LIVING_CONCEPTS_INC