Diversified Senior Services Reports Losses in Fourth Quarter and Year

Housing Company for Seniors Writes Off $992,000 of Development Costs

Citing Scarcity of Permanent Financing; Management Fees Increase



Apr 02, 2001, 01:00 ET from Diversified Senior Services, Inc.

    WINSTON-SALEM, N.C., April 2 /PRNewswire/ --
     Diversified Senior Services, Inc. (Nasdaq:   DISS) today reported a loss of
 $1,057,821, or $0.27 per share, on revenues of $1,551,666 for the fourth
 quarter ended Dec. 31, 2000 and a loss for the year of $1,080,377, or $0.29
 per share, on revenues of $6,146,265.
     In the fourth 1999 quarter, the company lost $251,196 or $0.08 per share,
 on revenues of $1,033,676, and for the full year of 1999 it had income of
 $73,273, or $0.02 per share, on revenues of $5,111,050.
     The year 2000 included fourth quarter write offs of $992,000, or $0.25 per
 share, of development costs and advances.  Without the write offs, the company
 would have lost $0.02 per share in the fourth quarter and $0.04 per share for
 the year.  In addition, preferred stock dividends for 2000 were $404,781
 compared to $299,941 paid out in 1999.
     "Our results for the year 2000 contain both bad news and good news," said
 Diversified chief executive William G. Benton.  "The bad news, of course, was
 the fact that we had a loss.  That was due largely to the scarcity of
 permanent financing, which slowed down, and continues to slow down, our
 development cycle.  Development fee income in 2000 was more than 50 per cent
 less than it was in 1999, a total of only $886,000 in 2000 compared with
 $1,913,000 in 1999.
     "The good news was -- and remains -- the increase in management fees to
 $1,159,000 in 2000 from $887,000 in 1999.  Our corporate goal has long been to
 build management fees to the point where they provide earnings for the company
 on an ever-increasing level rather than having to depend, as we have for the
 past few years, on development and acquisition fees.  As a result of a new,
 large management contract that we expect will kick in gradually, beginning
 late in the first quarter and early in the second quarter, we are either at
 that point now or very close to it.
     "And, further, when banks again begin to provide permanent financing, we
 will resume development activities which we expect will provide us with
 earnings growth potential."
 
                       DIVERSIFIED SENIOR SERVICES, INC.
                         SUMMARY FINANCIAL INFORMATION
 
                                3 Months     3 Months      Year         Year
                                  Ended       Ended        Ended       Ended
                               12/31/2000  12/31/1999  12/31/2000   12/31/1999
 
       Condensed Statements of Operations
     Income                    $1,551,666  $1,033,676   $6,146,265  $5,111,050
     Operating expenses         2,745,661   1,275,310    7,367,056   4,679,693
     Operating income (loss)   (1,193,995)   (241,634)  (1,220,791)    431,357
     Other income (expense):
      Interest and other
       income                       5,542     103,892      372,491     277,382
      Interest and other
       expense                    (24,937)     19,749      (77,296)     (6,959)
     Net income (loss) before
      the effect of accounting
      change                   (1,213,390)   (117,993)    (925,596)    701,780
     Effect of accounting
      change                           --          --           --     328,566
     Income before income
      taxes                    (1,213,390)   (117,993)    (925,596)    373,214
     Deferred tax benefit         250,000          --      250,000          --
     Net income (loss)           (963,390)   (117,993)    (675,596)    373,214
     Preferred dividends           94,431     133,203      404,781     299,941
     Net income (loss)
      available to
      common                  $(1,057,821)  $(251,196) $(1,080,377)   $ 73,273
 
     Per share basic and
      diluted:
       Net income (loss)
        available to common
        before effect of
        accounting change     $     (0.33)  $   (0.08) $     (0.36)   $   0.12
       Effect of accounting
        change                         --          --           --       (0.10)
       Deferred income tax
        benefit                      0.06          --         0.07          --
       Net income (loss)
        available to
        common                $     (0.27)  $   (0.08) $     (0.29)   $   0.02
 
        Weighted average
         shares                 3,911,165   3,301,400    3,712,859   3,301,400
 
 
                                                     As of           As of
                                                  12/31/2000       12/31/1999
        Selected Balance Sheet Data:
     Current assets                             $    421,291     $   1,941,355
     Development fees receivable, notes and
      accounts receivable properties            $  8,080,280     $   6,278,208
     Total assets                               $ 10,189,619     $  10,202,622
     Total liabilities                          $  2,608,820     $   1,541,446
     Shareholders' equity                       $  7,580,799     $   8,661,176
 
 

SOURCE Diversified Senior Services, Inc.
    WINSTON-SALEM, N.C., April 2 /PRNewswire/ --
     Diversified Senior Services, Inc. (Nasdaq:   DISS) today reported a loss of
 $1,057,821, or $0.27 per share, on revenues of $1,551,666 for the fourth
 quarter ended Dec. 31, 2000 and a loss for the year of $1,080,377, or $0.29
 per share, on revenues of $6,146,265.
     In the fourth 1999 quarter, the company lost $251,196 or $0.08 per share,
 on revenues of $1,033,676, and for the full year of 1999 it had income of
 $73,273, or $0.02 per share, on revenues of $5,111,050.
     The year 2000 included fourth quarter write offs of $992,000, or $0.25 per
 share, of development costs and advances.  Without the write offs, the company
 would have lost $0.02 per share in the fourth quarter and $0.04 per share for
 the year.  In addition, preferred stock dividends for 2000 were $404,781
 compared to $299,941 paid out in 1999.
     "Our results for the year 2000 contain both bad news and good news," said
 Diversified chief executive William G. Benton.  "The bad news, of course, was
 the fact that we had a loss.  That was due largely to the scarcity of
 permanent financing, which slowed down, and continues to slow down, our
 development cycle.  Development fee income in 2000 was more than 50 per cent
 less than it was in 1999, a total of only $886,000 in 2000 compared with
 $1,913,000 in 1999.
     "The good news was -- and remains -- the increase in management fees to
 $1,159,000 in 2000 from $887,000 in 1999.  Our corporate goal has long been to
 build management fees to the point where they provide earnings for the company
 on an ever-increasing level rather than having to depend, as we have for the
 past few years, on development and acquisition fees.  As a result of a new,
 large management contract that we expect will kick in gradually, beginning
 late in the first quarter and early in the second quarter, we are either at
 that point now or very close to it.
     "And, further, when banks again begin to provide permanent financing, we
 will resume development activities which we expect will provide us with
 earnings growth potential."
 
                       DIVERSIFIED SENIOR SERVICES, INC.
                         SUMMARY FINANCIAL INFORMATION
 
                                3 Months     3 Months      Year         Year
                                  Ended       Ended        Ended       Ended
                               12/31/2000  12/31/1999  12/31/2000   12/31/1999
 
       Condensed Statements of Operations
     Income                    $1,551,666  $1,033,676   $6,146,265  $5,111,050
     Operating expenses         2,745,661   1,275,310    7,367,056   4,679,693
     Operating income (loss)   (1,193,995)   (241,634)  (1,220,791)    431,357
     Other income (expense):
      Interest and other
       income                       5,542     103,892      372,491     277,382
      Interest and other
       expense                    (24,937)     19,749      (77,296)     (6,959)
     Net income (loss) before
      the effect of accounting
      change                   (1,213,390)   (117,993)    (925,596)    701,780
     Effect of accounting
      change                           --          --           --     328,566
     Income before income
      taxes                    (1,213,390)   (117,993)    (925,596)    373,214
     Deferred tax benefit         250,000          --      250,000          --
     Net income (loss)           (963,390)   (117,993)    (675,596)    373,214
     Preferred dividends           94,431     133,203      404,781     299,941
     Net income (loss)
      available to
      common                  $(1,057,821)  $(251,196) $(1,080,377)   $ 73,273
 
     Per share basic and
      diluted:
       Net income (loss)
        available to common
        before effect of
        accounting change     $     (0.33)  $   (0.08) $     (0.36)   $   0.12
       Effect of accounting
        change                         --          --           --       (0.10)
       Deferred income tax
        benefit                      0.06          --         0.07          --
       Net income (loss)
        available to
        common                $     (0.27)  $   (0.08) $     (0.29)   $   0.02
 
        Weighted average
         shares                 3,911,165   3,301,400    3,712,859   3,301,400
 
 
                                                     As of           As of
                                                  12/31/2000       12/31/1999
        Selected Balance Sheet Data:
     Current assets                             $    421,291     $   1,941,355
     Development fees receivable, notes and
      accounts receivable properties            $  8,080,280     $   6,278,208
     Total assets                               $ 10,189,619     $  10,202,622
     Total liabilities                          $  2,608,820     $   1,541,446
     Shareholders' equity                       $  7,580,799     $   8,661,176
 
 SOURCE  Diversified Senior Services, Inc.