Advocat Announces Plans to Sell North Carolina Assisted Living Facilities.BRENTWOOD, Tenn. -- Advocat Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on 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 that it has signed a definitive agreement to sell eleven 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 located in North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. to Agemark Acquisition, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , a North Carolina limited liability company. The sales price is approximately $11 million, to be paid at closing. Closing is contingent on the purchaser's ability to obtain licenses to operate the buildings. The closing is expected to occur during the first quarter of 2006. A pre-tax charge of approximately $4.5 million to $5.0 million will be recorded in the fourth quarter of 2005 to reduce the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of these 11 facilities to the amount expected to be realized from the proceeds of the sale, after payment of estimated transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). . Advocat operates one additional assisted living facility in North Carolina. The Company has executed an agreement to sell this facility for a sales price of approximately $3.5 million, subject to the satisfactory completion of due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. . The buyer of this facility has until the end of the year to conduct due diligence. If completed, this transaction will result in a pre-tax gain of approximately $1.3 million in the quarter the facility is sold. "This sale will allow us to focus on our nursing home operations and reduce our overall debt," stated William R. Council, Chief Executive Officer. "Though we worked to stabilize the North Carolina operations, we were not making meaningful progress toward positive operating results, as the facilities continued to produce negative cash flow and operate at a loss." Mortgage debt on the North Carolina buildings is approximately $18 million. The company expects net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). (after costs and commissions) from these transactions will leave a debt balance of approximately $4.5 million to $5.0 million, which it intends to finance with a term loan from the existing lender, secured by other properties currently financed by this lender. Forward-Looking Statements Forward-looking statements made in this release involve a number of risks and uncertainties, including but not limited to, uncertainty regarding the Company's ability to complete all of the described transactions and restructure the remaining debt, the Company's ability to restructure or refinance its debt, the impact of under-insured professional liability claims, the accuracy of the Company's estimate of its anticipated professional liability expense, factors affecting the long-term care 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. The Company has provided additional information in its Annual Report on Form 10-K for the fiscal year ended December 31, 2004, as well as in other filings with the Securities and Exchange Commission, which readers are encouraged to review for further disclosure of other factors that could cause actual results to differ materially from those indicated in the forward-looking statements. Advocat Inc. is not responsible for updating the information contained in this press release beyond the published date, or for changes made to this document by wire services or Internet services. Advocat Inc. provides long-term care services to nursing home patients and residents of assisted living facilities in nine states, primarily in the Southeast. For additional information about the Company, visit Advocat's web site: http://www.irinfo.com/avc |
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