Advocat Announces Nine-Month Results.FRANKLIN, Tenn.--(BUSINESS WIRE)--Nov. 23, 1999-- 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 nine months ended September 30, 1999. The Company reported an $11.8 million loss before income taxes and the cumulative effect of a change in accounting principle compared with pre-tax income of $1.3 million in the first nine months of 1998. The net loss for the 1999 period was $7.8 million, or $1.44 per share, compared with net income of $818,000, or $0.15 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 nine-month period of 1998. The loss for the period in 1999 includes pre-tax charges of approximately $11 million related primarily to increases in the provision for doubtful accounts for both patient accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying and third party payor payor (payer) n. The one who must make payment on a promissory note. settlements, reserves for 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 workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. and liability claims, asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges and miscellaneous other expenses. The Company is currently analyzing its results for the three months ended September 30, 1999, and believes that certain charges recorded in this period may apply to either or both of the three-month periods ended March 31 or June 30, 1999. Upon completion of the analysis, quarterly data for the three quarters in the period ended September 30, 1999 will be announced. The Company also reported that it is currently not in compliance with various financial covenants contained in its loan agreements with its primary bank and other lenders. Cross-default and other provisions contained in other loan agreements will under certain circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or permit the holders of a majority of the Company's debt to demand immediate repayment. The Company has total bank and other debt of $61.8 million as of September 30, 1999 of which the Company has classified $55.6 million as current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. . Management is currently in various stages of negotiations with the Company's bank and other lenders for the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of approximately $27 million in debt that is due December 1, 1999. No assurance can be given that the Company will successfully negotiate a restructuring, including appropriate waivers, of its indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. . If any of the Company's lenders forced immediate repayment, the Company would not be able to repay the amounts outstanding. Net revenues for the first nine months of 1999 totaled $135.8 million compared with revenues of $155.5 million for the first nine months of 1998. The decline in revenues was primarily due to lower patient revenues related to changes in Medicare reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. and a decline in Medicare census. 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. decreased to $115.5 million in the 1999 nine-month period compared with $123.6 million in the 1998 comparable period. The decrease was primarily due to cost reductions implemented in response to Medicare reimbursement changes. 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 122 facilities including 57 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 5,320 units and 65 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 7,307 licensed beds. The Company operates facilities in 12 states, primarily in the Southeast, and three provinces in Canada. For additional information about the Company, visit Advocat's web site: http://www.irinfo.com/avc -0-
ADVOCAT INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
For the Nine Months
Ended September 30,
1999 1998
------------- ------------
REVENUES:
Patient revenues $ 105,071 $ 126,662
Resident revenues 27,962 25,983
Management fees 2,656 2,708
Interest 113 143
------------- -------------
Net revenues 135,802 155,496
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OPERATING EXPENSES:
Operating 115,466 123,546
General and administrative 9,372 8,159
------------- -------------
Total operating expenses 124,838 131,705
------------- -------------
OPERATING INCOME 10,964 23,791
------------- -------------
FIXED EXPENSES:
Lease 15,155 14,379
Interest 4,126 3,848
Depreciation and amortization 3,447 2,818
Non-recurring charges -- 1,468
------------- -------------
Total fixed expenses 22,728 22,513
------------- -------------
Income (loss) before income taxes (11,764) 1,278
Provision for income taxes (4,235) 460
------------- -------------
Income (loss) before cumulative
effect of change in accounting
principle (7,529) 818
Cumulative effect of change in
accounting principle (277) 0
-------------- -------------
NET INCOME (LOSS) $ (7,806) $ 818
============= =============
Basic earnings per share:
Income (loss) before accounting
change $ (1.39) $ 0.15
Cumulative effect of change in
accounting principle, net of
tax (0.05) 0.00
------------- -------------
Net income (loss) $ (1.44) $ 0.15
============ =============
Diluted earnings per share:
Income (loss) before accounting
change $ (1.39) $ 0.15
Cumulative effect of change in
accounting principle, net of
tax (0.05) 0.00
------------- -------------
Net income (loss) $ (1.44) $ 0.15
============= =============
Weighted Average Shares:
Basic 5,430,000 5,384,000
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Fully Diluted 5,430,000 5,395,000
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