Five Star Quality Care, Inc. (AMEX: FVE) is a national healthcare and senior living services provider focused on building a solid financial base by carefully managing assets, resulting in a better bottom-line and enhanced resident care. With more than 21,000 employees in 230 locations nationwide, the company operates through three major divisions: Five Star Senior Living, Five Star Rehabilitation Services, and Five Star Pharmacy Services.

The Five Star Senior Living division includes more than 200 Independent Living and Assisted Living facilities, Skilled Health Care facilities, and Continuing Care Retirement Communities. Through its Rehabilitation Services division, Five Star operates rehabilitation hospitals and outpatient health rehabilitation clinics. Through its Pharmacy Services division, Five Star operates institutional pharmacies across the country.

There is much opportunity for the company to grow as the aging U.S. population increases demand for independent living properties, assisted living communities, skilled nursing facilities, pharmacies and rehabilitation services. In addition to capitalizing on this industry growth, the company aims to improve profitability of its existing operations by increasing revenues and improving margins. Five Star is also utilizing a proven acquisition strategy for growth and continues to seek additional areas of expansion.

For the second quarter ended June 30, 2009, the company reported revenues of $297.1 million, up 9.9% from the $270.5 million reported for the same period last year. Net income more than doubled from $3.5 million to $8.6 million, while EBITDA for the quarter was $14.8 million compared to EBITDA of $8.7 million for the same period last year. With a well executed growth strategy and much potential for further growth, Five Star is one of our favorite Tiny Gems.