Beverly First Quarter Profit Totals $12.2 Million; Strong Operating Trends Continue.Business Editors FORT SMITH, Ark.--(BUSINESS WIRE)--May 13, 2003 Beverly Beverly, city (1990 pop. 38,195), Essex co., NE Mass., on Massachusetts Bay; inc. as a city 1894. Its chief manufactures are electronic and scientific equipment, consumer goods, and chemicals. Enterprises, Inc. (NYSE NYSE See: New York Stock Exchange :BEV) today announced that it earned $12.2 million (12 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. 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. ) in the first quarter of 2003, compared to a loss of $56.7 million (54 cents per share diluted) in the same period of 2002. First quarter 2003 results include net income of $10 million (10 cents per share diluted) from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. (primarily reflecting an $11.1 million gain on the January January: see month. 2003 sale of MATRIX outpatient outpatient /out·pa·tient/ (-pa-shent) a patient who comes to the hospital, clinic, or dispensary for diagnosis and/or treatment but does not occupy a bed. out·pa·tient n. rehabilitation rehabilitation: see physical therapy. clinics) and a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge of $1.2 million for workforce reductions. The 2002 period included a charge of $77.2 million (74 cents per share diluted) for the cumulative effect of a change in accounting for goodwill and a loss from discontinued operations totaling $5.9 million (6 cents per share diluted). Net operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. for the 2003 first quarter totaled $586.0 million, compared to $593.1 million in the year-earlier period. Increases in Medicaid Medicaid, national health insurance program in the United States for low-income persons; established in 1965 with passage of the Social Security Amendments and now run by the Centers for Medicare and Medicaid Services. and private pay rates in 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. and a 45 percent increase in non-Beverly business for AEGIS Therapies, compared to the 2002 first quarter, were offset by a $16.6 million revenue decline due to dispositions of 16 under-performing or non-strategic nursing facilities and a $7.9 million decrease in 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. revenues. This decrease was primarily associated with the October October: see month. 1, 2002, elimination of certain Medicare funding provisions, partially offset by an increase in Medicare patients and by higher acuity acuity /acu·i·ty/ (ah-ku´i-te) clarity or clearness, especially of vision. a·cu·i·ty n. Sharpness, clearness, and distinctness of perception or vision. levels. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses during the 2003 first quarter totaled $11.6 million, and the January 2003 sale of MATRIX generated $36 million in cash. Total debt (on and off-balance sheet) was reduced during the quarter by $22.8 million. Cash at the end of the 2003 quarter totaled $122.1 million, up $6.7 million from 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. 2002 and up $39.3 million from the first quarter of 2002. "Our principal business units achieved strong operating and financial results during the first quarter, with both Nursing Facilities and AEGIS Therapies exceeding their internal targets for revenues as well as for pre-tax income," said William William, crown prince of Germany William or Frederick William, 1882–1951, crown prince of Germany, son of William II. In World War I he commanded (1914) an army on the Western Front and was nominal commander in the German attack R. Floyd Floyd is a variant spelling of the Welsh name Lloyd, which means grey, and may refer to: Places
The ahead-of-target performance by Nursing Facilities reflected a significant increase in Medicare patients to 11.8 percent of total patient days -- up 60 basis points, compared to the first quarter of 2002, and the highest overall level since the first quarter of 1998. Units specializing in the care of Alzheimer patients continued to generate improved occupancy levels and higher margins at their host nursing homes. Ten additional Alzheimer's units are planned during the remainder of 2003. Medicaid and private/other per diem per diem adj. or n. Latin for "per day," it is short for payment of daily expenses and/or fees of an employee or an agent. rates increased 3.0 percent and 3.5 percent, respectively, compared to the year-earlier period. This partially offset a 6.7 percent decline in the Medicare per diem rate and a slight decline in the overall occupancy level to 87.7 percent. "We expect that Medicaid per diem rates for the full year will increase by an average of 2 to 2.5 percent compared to 2002, which is in line with our earlier projections," Floyd said. Average wage rates increased 4.8 percent compared to the first quarter of 2002, slightly lower than the comparable increase experienced during the fourth-quarter of 2002. The better-than-plan performance at AEGIS Therapies was due to a 45 percent increase in revenues from non-Beverly customers, compared to the year-earlier period, and continuation of solid pre-tax margins. AEGIS added 36 new clients during the quarter, bringing the total of non-Beverly nursing homes it serves to 413. Revenue growth from new business also exceeded the internal target. Hospice hospice, program of humane and supportive care for the terminally ill and their families; the term also applies to a professional facility that provides care to dying patients who can no longer be cared for at home. operations also continued to grow, with an increase in average daily census daily census See Census. since the first quarter of 2002 of nearly 100 patients. This higher base of 800 patients resulted in a near-doubling of pre-tax income and a significant increase in margin. Floyd continued: "We are very encouraged by our performance trends during the first quarter and by the operating momentum that is continuing to build in our principal business units. We're also very encouraged by the progress we're making on our previously disclosed divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). strategy -- the sale of those nursing homes that currently account for more than 50 percent of our projected patient care liability costs. These costs continued to increase during the first quarter of 2003, although the comparison with the year-earlier period is somewhat skewed skewed curve of a usually unimodal distribution with one tail drawn out more than the other and the median will lie above or below the mean. skewed Epidemiology adjective Referring to an asymmetrical distribution of a population or of data . Accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. were at lower levels during the 2002 first quarter, primarily because the insurance policy in effect at that time included an aggregate limit. We believe that accruals for patient care liability costs should begin to decline as we complete the divestiture strategy." Beverly shareholders may listen to a discussion by senior management of the company's performance at 8:30 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT today by dialing 1-800-479-9001 or 1-719-457-2618 and entering reservation number 548442. A recording of this conference call will be available from 11:30 a.m. EDT today until midnight Friday, May 23. Shareholders may dial 1-888-203-1112 or 1-719-457-0820 and enter reservation number 548442 to access the recording. This release is intended to be disclosure through methods reasonably designed to provide broad, non-exclusionary distribution to the public in compliance with the Securities and Exchange Commission's Fair Disclosure Regulation. This release may contain 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. , including statements related to expected performance in 2003 and beyond, made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause the company's actual results in future periods to differ materially from forecasted results. These risks and uncertainties include: national and local economic conditions, including their effect on the availability and cost of labor, utilities and materials; the effect of government regulations and changes in regulations governing gov·ern v. gov·erned, gov·ern·ing, gov·erns v.tr. 1. To make and administer the public policy and affairs of; exercise sovereign authority in. 2. the healthcare industry, including the company's compliance with such regulations; changes in Medicare and Medicaid Medicare and Medicaid U.S. government programs in effect since 1966. Medicare covers most people 65 or older and those with long-term disabilities. Part A, a hospital insurance plan, also pays for home health visits and hospice care. payment levels and methodologies and the application of such methodologies by the government and its fiscal intermediaries fiscal intermediary Part A Contractor Medicare A private company that has a contract with Medicare to pay part A and some part B bills. See Medicare, Part A. ; the effects of adopting new accounting standards; liabilities and other claims asserted against the company, including patient care liabilities, as well as the resolution of lawsuits brought about by the announcement or settlement of federal government investigations and increases in the reserves for patient care liabilities; the ability to predict future reserves related to patient care liabilities; the ability to reduce overhead costs overhead costs see fixed costs. , and improve the effectiveness of our fundamental business processes; the ability to execute our strategic growth initiatives and implement our plan to divest To deprive or take away. Divest is usually used in reference to the relinquishment of authority, power, property, or title. If, for example, an individual is disinherited, he or she is divested of the right to inherit money. certain of our nursing facilities in a timely manner at fair value; the ability to attract and retain qualified personnel; the availability and terms of capital to fund acquisitions, capital improvements and on-going operations; the competitive environment in which the company operates; the ability to maintain and increase census levels; and demographic changes. These and other risks and uncertainties that could affect future results are addressed in the company's filings with the Securities and Exchange Commission, including Forms 10-K and 10-Q. Beverly Enterprises, Inc. and its operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. comprise a leading provider of healthcare services to the elderly in 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. . They operate 449 skilled nursing facilities, as well as 29 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. centers, and 47 home care and hospice centers. Through AEGIS Therapies, they also offer rehabilitative re·ha·bil·i·tate tr.v. re·ha·bil·i·tat·ed, re·ha·bil·i·tat·ing, re·ha·bil·i·tates 1. To restore to good health or useful life, as through therapy and education. 2. services on a contract basis to nursing facilities and assisted living centers operated by other care providers.
BEVERLY ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
Quarter ended
March 31,
------------------
2003 2002
-------- --------
Net operating revenues $586,022 $593,051
Interest income 1,212 1,096
-------- --------
Total revenues 587,234 594,147
Costs and expenses:
Operating and administrative:
Wages and related 351,397 357,742
Provision for insurance and related items 39,341 21,088
Other 157,112 151,770
Interest 16,977 17,186
Depreciation and amortization 17,755 18,853
Workforce reductions 1,187 --
-------- --------
Total costs and expenses 583,769 566,639
-------- --------
Income before provision for income taxes,
discontinued operations and cumulative effect of
change in accounting for goodwill 3,465 27,508
Provision for income taxes 1,236 1,079
-------- --------
Income before discontinued operations and
cumulative effect of change in accounting for
goodwill 2,229 26,429
Discontinued operations, net of income taxes of
$0 for 2003 and 2002 9,959 (5,925)
Cumulative effect of change in accounting for
goodwill, net of income taxes of $0 for 2002 -- (77,171)
-------- --------
Net income (loss) $ 12,188 $(56,667)
======== ========
Basic and diluted net income (loss) per share of
common stock:
Before discontinued operations and cumulative
effect of change in accounting for goodwill $ 0.02 $ 0.25
Discontinued operations 0.10 (0.06)
Cumulative effect of change in accounting for
goodwill -- (0.74)
-------- --------
Net income (loss) per share of
common stock(1) $ 0.12 $ (0.54)
======== ========
Shares used to compute net income (loss) per
share 104,743 104,441
======== ========
(1) May not add due to rounding.
BEVERLY ENTERPRISES, INC.
SUPPLEMENTARY INFORMATION
Quarter ended
March 31,
--------------------
2003 2002
--------- ---------
Number of nursing home facilities:
Owned 317 323
Leased 131 141
Managed 1 1
--------- ---------
Total 449 465
========= =========
Number of beds:
Owned 34,752 35,145
Leased 14,487 15,701
Managed 75 75
--------- ---------
Total 49,314 50,921
========= =========
Assisted Living Centers 29 29
Home Care Centers 47 53
Outpatient Clinics 10 154
Patient Days 3,821,000 3,972,000
Nursing Home Occupancy
(based on operational beds) 87.74% 87.92%
Patient Mix (based on patient days):
Medicaid 70.48% 70.24%
Medicare 11.83% 11.23%
Private & Other 17.69% 18.53%
Sources of Revenue (based on $):
Medicaid 52.80% 52.64%
Medicare 26.51% 27.10%
Private & Other 20.69% 20.26%
Average per diem rate
(including ancillaries) $149.43 $146.82
Wages and related expenses as
a % of net operating revenues 59.96% 60.32%
BEVERLY ENTERPRISES, INC.
SUPPLEMENTARY INFORMATION
ANALYSIS OF REVENUES
Quarter ended
March 31,
------------------
2003 2002
-------- --------
REVENUES (In thousands)
-----------
NURSING FACILITIES:
MEDICAID $310,222 $311,562
MEDICARE 134,960 142,906
PRIVATE & OTHER 108,554 111,470
-------- --------
SUBTOTAL 553,736 565,938
AEGIS THERAPIES 16,075 11,062
HOME CARE 14,327 16,444
OTHER 1,884 (393)
-------- --------
TOTALS $586,022 $593,051
======== ========
PATIENT DAYS (In thousands)
---------------
MEDICAID 2,693 2,790
MEDICARE 452 446
PRIVATE & OTHER 676 736
-------- --------
TOTALS 3,821 3,972
======== ========
PER DIEM RATE (Including Ancillaries)
---------------
MEDICAID $ 115.10 $ 111.74
MEDICARE - PART A 298.76 320.31
PRIVATE & OTHER 152.44 147.25
-------- --------
TOTALS(1) $ 149.43 $ 146.82
======== ========
(1) Weighted Average Rates
BEVERLY ENTERPRISES, INC.
SUPPLEMENTARY INFORMATION
ANALYSIS OF OPERATING AND ADMINISTRATIVE EXPENSES
(In thousands)
Quarter ended
March 31,
------------------
2003 2002
-------- --------
WAGES & RELATED $351,397 $357,742
PROVISION FOR INSURANCE
AND RELATED ITEMS 39,341 21,088
SUPPLIES 36,736 40,486
FOOD 14,808 15,120
UTILITIES 18,698 17,307
OTHER CONTROLLABLES 63,152 54,130
REAL ESTATE RENTAL 13,123 14,154
EQUIPMENT RENTAL 4,998 5,374
OTHER NONCONTROLLABLES 5,597 5,199
-------- --------
TOTALS $547,850 $530,600
======== ========
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