Advocat Announces Fourth Quarter Results.Business Editors FRANKLIN, Tenn.--(BUSINESS WIRE)--April 3, 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 fourth quarter and year ended December December: see month. 31, 2000. The Company reported a net loss after taxes of $4.2 million, or $0.76 per share, in the fourth quarter of 2000 compared with a loss of $13.9 million, or $2.55 per share, for the same period in 1999. Net revenues for the fourth quarter of 2000 increased 8.5% to $50.1 million compared with $46.2 million in the same period of 1999. "Advocat made progress in 2000 in stabilizing stabilizing, v to hold a limb motionless in order to ground its energy; a standard isometric resistance technique, it releases tension and lengthens muscle fibers. operations and benefited from a slight increase in revenues and basically flat expenses compared with 1999," stated Charles Charles, archduke of Austria Charles, 1771–1847, archduke of Austria; brother of Holy Roman Emperor Francis II. Despite his epilepsy, he was the ablest Austrian commander in the French Revolutionary and Napoleonic wars; however, he was handicapped by W. Birkett, M.D., chairman and chief executive officer of Advocat Inc. "Although we are showing progress related to our previously announced debt restructuring Debt Restructuring A method used by companies with outstanding debt obligations to alter the terms of the debt agreements in order to achieve some advantage. Notes: , we continue to face uncertainties regarding industry regulation and skyrocketing professional liability insurance costs." "Our fourth quarter and year end financial results were affected by two central issues, professional liability exposure and GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). treatment related to our debt restructuring. GAAP required Advocat to recognize, as current non-cash expense Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) , future lease escalators that totaled $260,000 in the fourth quarter and are expected to be approximately $1 million in 2001. With respect to professional liability exposure, the entire long term care profession is experiencing dramatic increases in loss exposure. As a result, reasonable levels of insurance coverage have become unattainable. The escalation es·ca·late v. es·ca·lat·ed, es·ca·lat·ing, es·ca·lates v.tr. To increase, enlarge, or intensify: escalated the hostilities in the Persian Gulf. v.intr. of loss exposure, as determined actuarially, required Advocat to significantly increase its self-insured self-insured Self fund Health insurance adjective Referring to the practice of carrying an individual health insurance policy for oneself; self insurance is usually more expensive than group insurance reserves in the fourth quarter of the year, reducing fourth quarter income by approximately $1.5 million. These increased costs caused the Company to violate certain financial covenants with its lead bank. As a result of the increased insurance costs and the difficulty in obtaining adequate coverage and the financial covenant violations, our independent auditors Independent Auditor An external auditor with a certified public accounting designation that qualifies him or her to provide an auditor's report. Notes: These auditors aren't affiliated with the company being audited. voiced a going concern issue in the year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. audit." Dr. Birkett continued, "It is most disconcerting dis·con·cert tr.v. dis·con·cert·ed, dis·con·cert·ing, dis·con·certs 1. To upset the self-possession of; ruffle. See Synonyms at embarrass. 2. to be faced with these issues at a time when the efforts of the company's management team are beginning to bear fruit. We are in discussion with our bank regarding the financial covenant issue and are focused on resolving this in the near future. Failing resolution, the company may be forced to take significant steps to protect its interests." Net revenues for 2000 increased 7.7% to $196.0 million compared with net revenues of $182.0 million in 1999. Patient revenues increased to $150.1 million in 2000 from $141.0 million in 1999 as a result of 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 several facilities effective April 2000. The increases were offset somewhat by lower occupancy rates Noun 1. occupancy rate - the percentage of all rental units (as in hotels) are occupied or rented at a given time pct, per centum, percent, percentage - a proportion in relation to a whole (which is usually the amount per hundred) and a facility that was closed in July July: see month. 2000. Resident revenues increased to $41.9 million from $37.9 million in 1999 as a result of three facilities opened in the second quarter of 1999 and rate increases. Total 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 0.7% to $153.7 million in 2000 compared with $152.6 million in 1999. The Company continues to implement cost reductions in response to the Medicare reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. changes. Operating expenses represented 80.1% of net patient and resident revenues in 2000 compared with 85.3% in 1999. The Company reported a net loss after taxes and the cumulative effect of the change in accounting principle of $3.9 million, or $0.70 per share, in 2000 compared with a loss of $21.7 million, or $3.98 per share, for 1999. The net loss for 1999 includes a $7.6 million tax provision resulting from a $12.8 million increase in the Company's valuation allowance against Advocat's deferred tax assets due to the uncertainty surrounding sur·round tr.v. sur·round·ed, sur·round·ing, sur·rounds 1. To extend on all sides of simultaneously; encircle. 2. To enclose or confine on all sides so as to bar escape or outside communication. n. the realization of the future benefits of those deferred tax assets. 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, 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 5,425 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 December 31, 2000. The Company operates facilities in 12 states, primarily in the Southeast, and four provinces in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . 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)
For the Three Months
Ended December 31,
2000 1999
---------- -----------
REVENUES:
Patient revenues $ 38,451 $ 35,951
Resident revenues 10,712 9,943
Management fees 903 276
Interest 68 46
---------- -----------
Net revenues 50,134 46,216
---------- -----------
OPERATING EXPENSES:
Operating 41,526 37,091
Lease 4,757 5,220
General and administrative 3,382 2,381
Interest 1,641 1,334
Depreciation and amortization 1,989 1,720
Non-recurring charges 1,086 500
---------- -----------
Total operating expenses 54,381 48,246
---------- -----------
Income (loss) before income taxes (4,247) (2,030)
Provision (benefit) for income taxes (90) 11,840
---------- -----------
Income (loss) before cumulative effect
of change in accounting principle (4,157) -
Cumulative effect of change in
accounting principle, net of tax - -
---------- -----------
NET INCOME (LOSS) $ (4,157) $ (13,870)
========== ===========
Basic earnings (loss) per share:
Income (loss) before accounting change $ (0.76) $ (2.55)
Cumulative effect of change in
accounting principle, net of tax - --
---------- -----------
Net income (loss) $ (0.76) $ (2.55)
========== ===========
Diluted earnings (loss) per share:
Income (loss) before accounting change $ (0.76) $ (2.55)
Cumulative effect of change in
accounting principle, net of tax - --
---------- -----------
Net income (loss) $ (0.76) $ (2.55)
========== ===========
Weighted average shares:
Basic 5,492 5,445
========== ===========
Diluted 5,492 5,445
========== ===========
For the Twelve Months
Ended December 31,
2000 1999
---------- ----------
REVENUES:
Patient revenues $ 150,071 $ 141,022
Resident revenues 41,889 37,905
Management fees 3,863 2,932
Interest 212 159
---------- -----------
Net revenues 196,035 182,018
---------- -----------
OPERATING EXPENSES:
Operating 153,719 152,557
Lease 20,563 20,375
General and administrative 12,136 11,753
Interest 6,073 5,460
Depreciation and amortization 5,603 5,167
Non-recurring charges 1,708 500
---------- -----------
Total operating expenses 199,802 195,812
---------- -----------
Income (loss) before income taxes (3,767) (13,794)
Provision (benefit) for income taxes 83 7,605
---------- -----------
Income (loss) before cumulative effect
of change in accounting principle (3,850) (21,399)
Cumulative effect of change in
accounting principle, net of tax - (277)
---------- -----------
NET INCOME (LOSS) $ (3,850) $ (21,676)
========== ===========
Basic earnings (loss) per share:
Income (loss) before accounting change $ (0.70) $ (3.93)
Cumulative effect of change in
accounting principle, net of tax - (0.05)
---------- -----------
Net income (loss) $ (0.70) $ (3.98)
========== ===========
Diluted earnings (loss) per share:
Income (loss) before accounting change $ (0.70) $ (3.93)
Cumulative effect of change in
accounting principle, net of tax - (0.05)
---------- -----------
Net income (loss) $ (0.70) $ (3.98)
========== ===========
Weighted average shares:
Basic 5,492 5,445
========== ===========
Diluted 5,492 5,445
========== ==========
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion