Advocat Announces Second Quarter Results.Business Editors FRANKLIN, Tenn.--(BUSINESS WIRE)--Aug. 14, 2000 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 second quarter ended June June: see month. 30, 2000. The Company reported earnings of $73,000, or $0.01 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 second quarter of 2000 compared with a loss of $2.6 million, or $0.48 per share, for the same period in 1999. Results for the second quarter included $263,000 in non-recurring charges associated with the continuing negotiations with the Company's lenders and primary lessor One who rents real property or Personal Property to another. A lessor of land is a landlord. Cross-references Landlord and Tenant. lessor n. the owner of real property who rents it to a lessee pursuant to a written lease. . Net revenues for the second quarter ended June 30, 2000 increased 8.2% to $48.3 million compared with net revenues of $44.6 million in 1999. Net revenues increased 7.4% to $36.3 million in U.S. nursing homes compared with $33.8 million in the second quarter of 1999 and were primarily due to higher patient revenues related 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 several facilities that became effective April 2000. Net revenues for U.S. 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 rose 14.2% to $8.1 million compared with net revenues of $7.1 million in 1999, and Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. operations were up 5.1% to $3.9 million compared with net revenues of $3.7 million in the second quarter of 1999. 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 2.3% to $37.2 million in the second quarter compared with $38.0 million in 1999. The Company continues to implement cost reductions in response to Medicare reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. changes. The Company also announced that it has negotiated extensions on two loans with outstanding balances of $25.5 million at June 30, 2000. The loans include a working capital line of credit and a bridge loan with a combined balance outstanding of $14.4 million and an acquisition line of credit with an outstanding balance of $11.1 million at June 30, 2000. The Company received extensions to August 31, 2000, for the amounts under the working capital line of credit, bridge loan and the acquisition line of credit. The Company is negotiating a 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 the working capital line of credit and bridge loan, and negotiating replacement long-term financing Long-term financing Liabilities repayable in more than one year plus equity. on the acquisition line of credit. At June 30, 2000, the Company had negative working capital of $55.4 million primarily as result of the classification of a majority of the Company's debt 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. . The classification of a majority of the Company's debt as current maturities is due to the Company's non-compliance with debt covenants in various debt agreements, including net worth, cash flow and debt-to-equity ratio debt-to-equity ratio The relationship between long-term funds provided by creditors and funds provided by owners. A firm's debt-to-equity ratio is calculated by dividing long-term debt by owners' equity. Both items are shown on the balance sheet. requirements. Cross-default Cross-default A provision under which default on one debt obligation triggers default on another debt obligation. or material adverse change provisions contained in the agreements allow the holders of substantially all of the Company's debt to demand immediate repayment. As of this date, the Company had not obtained waivers of the non-compliance. The Company cannot assure that internally generated cash flows from earnings and existing cash balances will be sufficient to fund existing debt obligations on future capital and working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. through fiscal year 2000. The Company is currently discussing potential restructuring, modification and refinancing Refinancing An extension and/or increase in amount of existing debt. alternatives with its lenders and primary lessor. Any demands for repayment by lenders or the inability to obtain waivers or refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. the related debt would have a material adverse impact on the financial position, results of operations and cash flows of the Company. If the Company is unable to generate sufficient cash flow from its operations or successfully negotiate debt or lease amendments, it will explore a variety of other options, including, but not limited to, equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. from outside investors, asset dispositions or relief under the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. bankruptcy code Bankruptcy Code may refer to:
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 facilities with 5,472 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 June 30, 2000. 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)
For the Three Months
Ended June 30,
2000 1999
----------- -----------
REVENUES:
Patient revenues $ 36,702 $ 34,352
Resident revenues 10,384 9,323
Management fees 1,125 877
Interest 51 38
----------- -----------
Net revenues 48,262 44,590
----------- -----------
OPERATING EXPENSES:
Operating 37,170 38,033
Lease 5,258 5,003
General and administrative 2,879 3,155
Interest 1,436 1,325
Depreciation and amortization 1,141 1,147
Non-recurring charges 263 0
----------- -----------
Total operating expenses 48,147 48,663
----------- -----------
Income (loss) before income taxes 115 (4,073)
Provision (benefit) for income taxes 42 (1,466)
----------- -----------
Income (loss) before cumulative
effect of change in accounting
principle 73 (2,607)
Cumulative effect of change in
accounting principle, net of tax 0 0
----------- -----------
NET INCOME (LOSS) $ 73 $ (2,607)
=========== ===========
Basic earnings (loss) per share:
Income (loss) before accounting
change $ 0.01 $ (0.48)
Cumulative effect of change in
accounting principle, net of tax 0.00 0.00
----------- -----------
Net income (loss) $ 0.01 $ (0.48)
=========== ===========
Diluted earnings (loss) per share:
Income (loss) before accounting
change $ 0.01 $ (0.48)
Cumulative effect of change in
accounting principle, net of tax 0.00 0.00
----------- -----------
Net income (loss) $ 0.01 $ (0.48)
=========== ===========
Weighted average shares:
Basic 5,492,000 5,399,000
=========== ===========
Diluted 5,492,000 5,399,000
=========== ===========
For the Six Months
Ended June 30,
2000 1999
----------- -----------
REVENUES:
Patient revenues $ 72,674 $ 71,206
Resident revenues 20,810 18,227
Management fees 2,026 1,796
Interest 91 73
----------- -----------
Net revenues 95,601 91,302
----------- -----------
OPERATING EXPENSES:
Operating 73,596 75,756
Lease 10,534 9,904
General and administrative 5,696 5,890
Interest 2,890 2,632
Depreciation and amortization 2,375 2,295
Non-recurring charges 263 0
----------- -----------
Total operating expenses 95,354 96,477
----------- -----------
Income (loss) before income taxes 247 (5,175)
Provision (benefit) for income taxes 89 (1,863)
----------- -----------
Income (loss) before cumulative
effect of change in accounting
principle 158 (3,312)
Cumulative effect of change in
accounting principle, net of tax 0 (277)
----------- -----------
NET INCOME (LOSS) $ 158 $ (3,589)
=========== ===========
Basic earnings (loss) per share:
Income (loss) before accounting
change $ 0.03 $ (0.61)
Cumulative effect of change in
accounting principle, net of tax 0.00 (0.05)
----------- -----------
Net income (loss) $ 0.03 $ (0.66)
=========== ===========
Diluted earnings (loss) per share:
Income (loss) before accounting
change $ 0.03 $ (0.61)
Cumulative effect of change in
accounting principle, net of tax 0.00 (0.05)
----------- -----------
Net income (loss) $ 0.03 $ (0.66)
=========== ===========
Weighted average shares:
Basic 5,492,000 5,399,000
=========== ===========
Diluted 5,492,000 5,399,000
=========== ===========
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