Advocat Announces Third Quarter Results.Business Editors FRANKLIN, Tenn.--(BUSINESS WIRE)--Nov. 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 third quarter ended September September: see month. 30, 2000. The Company reported pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta earnings of $233,000 after non-recurring charges of $359,000 in the third quarter of 2000 compared with a loss of $6.6 million for the same period in 1999. Net income for the quarter was $149,000, or $0.03 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, compared with a net loss of $4.2 million, or $0.77 per share, in 1999. "Advocat made substantial progress in improving the financial health of the Company as a result of higher revenues and reduced costs," 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. "Revenues increased in each segment and rose 13% to $50.3 million compared with the third quarter of last year. We also continued to implement cost reduction programs in response to 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. reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. changes. After the close of the quarter, we reached agreements with our major 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. and major lender that will enable Advocat to move forward with greater certainty of being able to withstand the significant regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. and reimbursement pressures and to focus on the operational aspects of our business." Net revenues for the third quarter ended September 30, 2000, increased 13.0% to $50.3 million compared with net revenues of $44.5 million in 1999. Net revenues increased 15.0% to $38.4 million in U.S. nursing homes compared with $33.4 million in the third quarter of 1999 and were primarily due to higher patient revenues related to increased Medicare 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 8.1% to $8.0 million compared with net revenues of $7.4 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 5.4% to $3.9 million compared with net revenues of $3.7 million in the third quarter of 1999. Total expenses decreased 2.0% to $50.1 million in the third quarter compared with $51.1 million in 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. declined 2.8% to $38.6 million and represented 76.7% of net revenues in the third quarter of 2000 compared with 89.2% of net revenues in the third quarter of 1999. General and administrative expenses were down 12.2% to $3.1 million, or 6.1% of revenues, compared with $3.5 million, or 7.8% of revenues, in the third quarter of last year. Results for the third quarter also included $359,000 in non-recurring charges related to 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). costs associated with amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. lease agreements. Effective October October: see month. 1, 2000, the Company and its major lessor, Omega Healthcare Investors, Inc. ("Omega"), entered into an agreement that includes a new 10-year master lease with respect to 60% of the Company's skilled nursing facility 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. portfolio. This new lease provides for a reduction in lease payments and permits the closing or alternative use of a limited number of facilities in exchange for Advocat issuing preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. and a subordinated note to Omega. The Company and its primary lender also entered into an amendment to the master credit agreement that restructures all current obligations into a $20.4 million line of credit with components that have maturities from January January: see month. 15, 2002, through September 30, 2004. The amendment includes a reduction in interest rates, a continued working capital line and a reduction in the bank's commitment under letters of credit. Effective with the execution of the amended loan agreement, Advocat is now in compliance with its debt covenants resulting in an additional $38.1 million of debt being reclassified to long term. Additionally, Advocat is actively negotiating with a mortgage lender with respect to the refinancing Refinancing An extension and/or increase in amount of existing debt. of an acquisition line of approximately $11 million with a maturity of November November: see month. 30, 2000. This debt is secured by the assets of four facilities that are owned and operated by the Company. The Company believes that, as a result of the restructuring agreements and anticipated acquisition line of credit refinancing, internally generated cash flows from earnings and existing cash balances will be sufficient to fund existing debt obligations through fiscal year 2001. 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 containing 7,230 licensed beds as of September 30, 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 September 30,
2000 1999
-------- --------
REVENUES:
Patient revenues $38,946 $33,865
Resident revenues 10,368 9,735
Management fees 934 860
Interest 53 40
-------- --------
Net revenues 50,301 44,500
-------- --------
OPERATING EXPENSES:
Operating 38,598 39,710
Lease 5,272 5,251
General and administrative 3,058 3,482
Interest 1,542 1,494
Depreciation and amortization 1,239 1,152
Non-recurring charges 359 --
-------- --------
Total operating expenses 50,068 51,089
-------- --------
Income (loss) before income taxes 233 (6,589)
Provision (benefit) for income taxes 84 (2,372)
-------- --------
Income (loss) before cumulative
effect of change in accounting
principle -- --
Cumulative effect of change in
accounting principle, net of tax -- --
-------- --------
NET INCOME (LOSS) $149 $(4,217)
======== ========
Basic earnings (loss) per share:
Income (loss) before accounting
change $0.03 $(0.77)
Cumulative effect of change in
accounting principle, net of tax -- --
-------- --------
Net income (loss) $0.03 $(0.77)
======== ========
Diluted earnings (loss) per share:
Income (loss) before accounting
change $0.03 $(0.77)
Cumulative effect of change in
accounting principle, net of tax -- --
-------- --------
Net income (loss) $0.03 $(0.77)
======== ========
Weighted average shares:
Basic 5,492 5,492
======== ========
Diluted 5,492 5,492
======== ========
For the Nine Months
Ended September 30,
2000 1999
--------- ---------
REVENUES:
Patient revenues $111,620 $105,071
Resident revenues 31,177 27,962
Management fees 2,960 2,656
Interest 144 113
--------- ---------
Net revenues 145,901 135,802
--------- ---------
OPERATING EXPENSES:
Operating 112,193 115,466
Lease 15,806 15,155
General and administrative 8,754 9,372
Interest 4,432 4,126
Depreciation and amortization 3,614 3,447
Non-recurring charges 622 --
--------- ---------
Total operating expenses 145,421 147,566
--------- ---------
Income (loss) before income taxes 480 (11,764)
Provision (benefit) for income taxes 173 (4,235)
--------- ---------
Income (loss) before cumulative
effect of change in accounting
principle 307 (7,529)
Cumulative effect of change in
accounting principle, net of tax -- (277)
--------- ---------
NET INCOME (LOSS) $307 $(7,806)
========= =========
Basic earnings (loss) per share:
Income (loss) before accounting
change $0.06 $(1.39)
Cumulative effect of change in
accounting principle, net of tax -- (0.05)
--------- ---------
Net income (loss) $0.06 $(1.44)
========= =========
Diluted earnings (loss) per share:
Income (loss) before accounting
change $0.06 $(1.39)
Cumulative effect of change in
accounting principle, net of tax -- (0.05)
--------- ---------
Net income (loss) $0.06 $(1.44)
========= =========
Weighted average shares:
Basic 5,492 5,430
========= =========
Diluted 5,492 5,430
========= =========
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