American Retirement sees profit boost on restatement

American Retirement Corp. has reported revised results for its first quarter ended March 31, showing an improved financial picture.

The Brentwood-based operator of nursing homes and assisted-living facilities now shows earnings of $2.6 million, or 9 cents per diluted share, for the quarter instead. That's up from the $2.3 million, or 8 cents per diluted share, it reported on May 5, according to a statement released by the company Wednesday. The $4.8 million loss in the first quarter of last year is being restated as $3.6 million.

The restatement stems from the treatment of refundable entrance fees American Retirement receives from residents in its facilities. The company had been treating those fees as long-term assets, but upon the advice of its accounting firm, KPMG, will now show them as short-term assets.

The refundable portion of the entrance fees amounted to $79.0 million in 2004, $72.9 million in 2003 and $69.9 million in 2002.

The restatement won't affect the company's operations, financial condition or cash flow. The reclassification resulted in an adjustment of straight-line lease accounting, which led to a drop of $302,000 in lease expenses for the first quarter of this year. Revenue figures remained the same, showing $119 million in the quarter compared to $109 million in the first quarter a year ago.

Shares of American Retirement (NYSE: ACR) were trading at $14.76 at 2:25 p.m., up 6.4 percent from their closing price Tuesday. The 52-week range for the stock is $4.30 to $15.38.

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