Advocat Announces First Quarter Results.Business Editors FRANKLIN, Tenn.--(BUSINESS WIRE)--May 15, 2001 Advocat Inc. (Nasdaq OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). :AVCA AVCA American Volleyball Coaches Association AVCA American Veterinary Chiropractic Association AVCA African Venture Capital Association AVCA Almaden Valley Community Association AVCA Automobil Veteranen Club Austria AVCA Apoyo Vital Cardiopulmonar Avanzado ) today announced its results for the first quarter ended March 31, 2001. The Company reported a net loss of $1.5 million, or $0.27 per share, in the first quarter of 2001 compared with net income of $85,000, or $0.02 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, in the first quarter of 2000. "Advocat continued to make progress in the first quarter and reported a 5% increase in revenues," stated Charles W. Birkett, M.D., chairman and chief executive officer of Advocat Inc. "Although our revenue growth continues to be restrained by regulatory limits, we received a rate increase in Arkansas Arkansas, river, United States Arkansas (ärkăn`zəs, är`kənsô'), river, c.1,450 mi (2,330 km) long, rising in the Rocky Mts., central Colo. effective January 12, 2001, and are working on programs to increase our occupancy in our facilities. We also remain focused on controlling expense levels to improve our profitability." Revenues for the first quarter ended March 31, 2001, were $49.7 million compared with revenues of $47.3 million in 2000. Revenue increased 6.5% to $38.3 million in U.S. nursing homes compared with $36.0 million in the first quarter of 2000 and was primarily due to increased Medicare Medicare, national health insurance program in the United States for persons aged 65 and over and the disabled. It was established in 1965 with passage of the Social Security Amendments and is now run by the Centers for Medicare and Medicaid Services. utilization and PPS (Packets Per Second) The measurement of activity in a local area network (LAN). In LANs such as Ethernet, Token Ring and FDDI, as well as the Internet, data is broken up and transmitted in packets (frames), each with a source and destination address. rate increases at certain facilities and increased Medicaid rates in Arkansas compared with the prior year. Resident revenues were essentially even with the prior year at $10.4 million and management fees rose to $911,000, up from $901,000 in the first quarter of 2000. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. increased to $51.1 million in the first quarter compared with $47.2 million in 2000. The Company experienced a significant increase in professional liability costs and utilities in the latest quarter. "We continue to face uncertainties regarding industry regulation and skyrocketing professional liability insurance costs," continued Dr. Birkett. "Professional liability costs rose 74% in the first quarter to $2,494,000 compared with $1,431,000 in the first quarter of 2000. The Company also remains in non-compliance with certain financial covenants. We remain in active discussions with our lenders regarding potential waivers, amendments and refinancing Refinancing An extension and/or increase in amount of existing debt. alternatives and are hopeful that we can reach terms that will not jeopardize jeop·ard·ize tr.v. jeop·ard·ized, jeop·ard·iz·ing, jeop·ard·izes To expose to loss or injury; imperil. See Synonyms at endanger. the future of Advocat." Forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. made in this release involve a number of risks and uncertainties, including but not limited to, factors affecting the long-term care long-term care (LTC), n the provision of medical, social, and personal care services on a recurring or continuing basis to persons with chronic physical or mental disorders. industry in general, governmental reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. , government regulation, health care reforms, the impact of future licensing surveys, changing economic and market conditions and other risk factors detailed in the Company's Securities and Exchange Commission filings. Advocat Inc. operates 120 facilities including 56 assisted living as·sist·ed living n. A living arrangement in which people with special needs, especially older people with disabilities, reside in a facility that provides help with everyday tasks such as bathing, dressing, and taking medication. facilities with 5,245 units and 64 skilled nursing facilities skilled nursing facility n. Abbr. SNF An establishment that houses chronically ill, usually elderly patients, and provides long-term nursing care, rehabilitation, and other services. containing 7,230 licensed beds as of March 31, 2001. The Company operates facilities in 12 states, primarily in the Southeast, and four provinces in Canada. For additional information about the Company, visit Advocat's web site: http://www.irinfo.com/avc
ADVOCAT INC.
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended
Ended March 31,
2001 2000
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REVENUES:
Patient revenues $ 38,312 $ 35,972
Resident revenues 10,420 10,425
Management fees 911 901
Interest 46 40
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Net revenues 49,689 47,338
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OPERATING EXPENSES:
Operating 39,735 36,425
Lease 5,175 5,276
General and administrative 3,235 2,817
Depreciation and amortization 1,516 1,454
Interest 1,411 1,234
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Total expenses 51,072 47,206
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Income (loss) before income taxes (1,383) 132
Provision (benefit) for income taxes 90 47
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Net income (loss) $ (1,473) $ 85
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Basic and diluted earnings (loss)
per share:
Basic $ (0.27) $ 0.02
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Diluted $ (0.27) $ 0.02
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Weighted average shares:
Basic 5,492,000 5,492,000
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Diluted 5,492,000 5,492,000
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