Beverly Third Quarter EPS from Continuing Operations Totaled 19 Cents; Revenues Up 10%, EBITDA Up 21%.FORT SMITH, Ark. -- 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 net income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the totaled $21.2 million (19 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 third quarter of 2004, compared to $8.1 million (7 cents per share diluted) in the 2003 third quarter. Revenues from continuing operations for the 2004 third quarter totaled $508.2 million, an increase of more than 10 percent from the comparable period in 2003. "Double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. revenue increases and continued contributions from on-going Adj. 1. on-going - currently happening; "an ongoing economic crisis" ongoing current - occurring in or belonging to the present time; "current events"; "the current topic"; "current negotiations"; "current psychoanalytic theories"; "the ship's current position" cost-control initiatives contributed to a 21 percent increase in EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (a) and a gain of 80 basis points in our overall EBITDA margin to 9.4 percent for the 2004 third quarter, compared to the year-earlier period," 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
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 quarter totaling nearly $60 million that, combined with our strong cash position, enabled us to acquire 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. USA for cash - and, at the same time, invest $16 million primarily to further improve our 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. ." Floyd added: "We believe there is upside potential Upside potential The amount by which analysts or investors expect the price of a security may increase. upside potential The potential price or gain that may be expected in a security or in a security average, generally stated as the dollar in the 2004 EBITDA range from continuing operations that we had previously targeted at $180 million to $185 million. This range, for example, does not include the impact of pending provider tax plans in Indiana Indiana, state, United States Indiana, midwestern state in the N central United States. It is bordered by Lake Michigan and the state of Michigan (N), Ohio (E), Kentucky, across the Ohio R. (S), and Illinois (W). and Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York , which are expected to increase EBITDA by $12 million to $14 million. We believe these plans will be implemented during the fourth quarter, but approval could slip into 2005. "The $180 million to $185 million EBITDA range also does not include operating results from assets held for sale or 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. , and excludes the refinancing Refinancing An extension and/or increase in amount of existing debt. charge we recorded earlier this year. However, it does reflect EBITDA contributions from our recent acquisition of Hospice USA. We're we're Contraction of we are. we're we are on track with the integration of the 18 new hospice operations in Tennessee Tennessee, state, United States Tennessee (tĕn`əsē', tĕn'əsē`), state in the south-central United States. , Mississippi Mississippi, state, United States Mississippi (mĭs'əsĭp`ē), one of the Deep South states of the United States. It is bordered by Alabama (E), the Gulf of Mexico (S), Arkansas and Louisiana, with most of the border formed by and Alabama Alabama, indigenous people of North America Alabama (ăləbăm`ə), indigenous people of North America whose language belongs to the Muskogean branch of the Hokan-Siouan linguistic stock (see Native American languages). . This acquisition is expected to contribute nearly $2 million in EBITDA for 2004." (a) EBITDA is earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Financial and Operating Highlights Income --163% increase in 2004 third-quarter net income from continuing operations primarily reflects revenue gains and margin improvement in Skilled Nursing Facilities - as well as revenue increases of 88% in AseraCare Hospice (comparisons based on 2003 third quarter). The increased income also reflects a reduction of $4.9 million (31%) in interest expense. --Net income of $24.4 million (22 cents per share diluted) reflects net income from discontinued operations of $3.2 million (3 cents per share diluted). Net income in the 2003 third quarter of $10 million (9 cents per share diluted) included $1.9 million (2 cents per share diluted) of income from discontinued operations. Skilled Nursing Facilities --45% increase in EBITDA and 239 basis-point increase in EBITDA margin primarily reflect higher revenues, growth 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. patient mix and reduced bad debt expense resulting from increased patient collection rates. --Occupancy at the 331 facilities in continuing operations averaged 89% vs. 88.3% for 2003 third quarter - an increase of 70 basis points. --Medicare patients as a share of total patient days rose to 11.4% - the 19th consecutive increase in these higher-acuity, higher-revenue patients from year-earlier periods. --Medicare revenues rose 8.9% - reflecting a 6.26% increase in Medicare rates (effective October October: see month. 1, 2003), treatment of higher-acuity patients and increased Medicare census census, periodic official count of the number of persons and their condition and of the resources of a country. In ancient times, among the Jews and Romans, such enumeration was mainly for taxation and conscription purposes. . --Medicaid 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 - excluding the impact of prior-year adjustments - increased 5.3% (4.8% net of the cost of provider taxes) and private/managed-care rates were up 5.7% (compared to the 2003 third quarter). --The weighted-average wage rate rose less than 3.8%, compared to the 2003 third quarter. The increase was less than projected because of more efficient facility staffing resulting from the labor management system implemented in early 2004. --Nursing patient receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed at the end of the 2004 third quarter totaled $180.6 million (35 days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). ), compared to $254.8 million (44 days) for the year-earlier period. Aegis Therapies / AseraCare Hospice --Increase of 60% in Aegis Therapies third-party revenues over 2003 third quarter results primarily reflects net addition of 82 new customers during the last nine months and continued development of business from its existing customer base. --EBITDA and margins were reduced by higher labor costs, the result of a tightening market for therapists. However, margins remain at attractive levels relative to other major providers of therapy services and to Beverly's skilled nursing operations. --Third-party revenues from the Aegis "same-customer" base were up 19% during the first nine months of 2004, compared to the year-earlier period. --Aegis provides physical, occupational and speech therapy to nearly 590 outside clients - as well as to the Beverly system of nursing facilities. --The 88% increase in AseraCare Hospice revenues (compared to 2003 third quarter) reflects 33% increase in existing hospice programs, as well as incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. revenue of $5.5 million from the July July: see month. 30 acquisition of Hospice USA. --Average daily census daily census See Census. - excluding the Hospice USA acquisition - was 1,222 for the 2004 third quarter, an increase of 28% from the year-earlier period and 11% from the 2004 second quarter. Including the acquisition, average daily census for the 2004 third quarter was 1,792, which makes AseraCare the sixth largest hospice provider in the nation. At September September: see month. 30, AseraCare Hospice operated a total of 44 locations in 14 states. --The smooth integration of the former Hospice USA locations into AseraCare reflects a comprehensive plan that already was in place when the initial purchase agreement was signed. Operational and information technology systems already are fully integrated, and the expanded hospice unit is being operated as a single business. Beverly shareholders may listen to a discussion by senior management of the Company's performance at 8:30 a.m. ET tomorrow, Tuesday Tuesday: see week. , November November: see month. 9, by dialing 1-800-263-8506 or 1-719-457-2681 and entering reservation A clause in a deed of real property whereby the grantor, one who transfers property, creates and retains for the grantor some right or interest in the estate granted, such as rent or an Easement ,a right of use over the land of another. number 938269. A recording of this conference call will be available from 11:30 a.m. ET tomorrow until midnight Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , November 19. Shareholders may dial 1-888-203-1112 or 1-719-457-0820 and enter reservation number 938269 to access the recording. In addition, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. William R. Floyd will make a presentation at 11:00 a.m. ET tomorrow, Tuesday, November 9, at the CIBC World Markets CIBC World Markets is the investment banking division of the Canadian Imperial Bank of Commerce. It helps governments, large companies, and other large institutions obtain capital and credit and is a primary dealer in U.S. Treasury securities. Healthcare Conference. His presentation will be webcast live and can be accessed in the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of Beverly's Web site at www.beverlycorp.com. A replay of the webcast will be available at the same location for 30 days. The statements in this press release relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc matters that are not historical facts are 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. based on management's beliefs and assumptions using currently available information and expectations as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties including the risks and uncertainties detailed from time to time in Beverly's filings with the Securities and Exchange Commission. Although Beverly believes that the expectations reflected in such forward-looking statements are reasonable, it cannot give any assurances that these expectations will prove to be correct. Beverly assumes no duty to publicly update or revise such statements, whether as a result of new information, future events or otherwise. 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. are leading providers 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. . Beverly currently operates 354 skilled nursing facilities, as well as 18 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 45 hospice and home care centers. Through Aegis Therapies, Beverly also offers 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 facilities operated by other care providers.
BEVERLY ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
September 30, 2004
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -----------------------
2004 2003 2004 2003
--------- --------- ----------- -----------
Revenues $508,169 $461,201 $1,486,304 $1,345,030
Costs and expenses:
Wages and related 300,734 275,922 856,406 807,289
Provision for
insurance and
related items 29,407 27,892 90,381 82,165
Other operating
and
administrative 131,560 116,498 391,449 346,869
Depreciation and
amortization 15,918 14,783 46,241 43,634
Adjustment related
to California
investigation
settlement - - - (925)
Asset impairments,
workforce
reductions and
other unusual
items (613) 1,343 1,188 2,672
--------- --------- ----------- -----------
Total costs
and expenses 477,006 436,438 1,385,665 1,281,704
--------- --------- ----------- -----------
Income before other income
(expenses) 31,163 24,763 100,639 63,326
Other income
(expenses):
Interest expense (11,122) (16,029) (35,068) (47,761)
Costs related to
early
extinguishment of
debt (176) - (40,430) -
Interest income 1,246 1,170 4,089 3,554
Net gains on
dispositions 582 2 614 399
--------- --------- ----------- -----------
Total other
expenses,
net (9,470) (14,857) (70,795) (43,808)
--------- --------- ----------- -----------
Income before provision
for income taxes and
discontinued operations 21,693 9,906 29,844 19,518
Provision for income taxes 536 1,853 3,038 4,290
--------- --------- ----------- -----------
Income before discontinued
operations 21,157 8,053 26,806 15,228
Discontinued operations,
net of taxes: for the
quarters 2004 - $(59)
and 2003 - $0; for the
nine months 2004 - $286
and 2003 - $0 3,243 1,930 (4,890) 24,434
--------- --------- ----------- -----------
Net income $24,400 $9,983 $21,916 $39,662
========= ========= =========== ===========
Net income (loss) per
share of common stock:
Basic:
Before
discontinued
operations $0.20 $0.08 $0.25 $0.14
Discontinued
operations 0.03 0.01 (0.05) 0.23
--------- --------- ----------- -----------
Net income per
share of common
stock $0.23 $0.09 $0.20 $0.37
========= ========= =========== ===========
Shares used to
compute basic net
income (loss) per
share 108,039 107,142 107,613 106,356
========= ========= =========== ===========
Diluted:
Before
discontinued
operations $0.19 $0.07 $0.25 $0.14
Discontinued
operations 0.03 0.02 (0.05) 0.23
--------- --------- ----------- -----------
Net income per
share of common
stock $0.22 $0.09 $0.20 $0.37
========= ========= =========== ===========
Shares used to
compute diluted
net income (loss)
per share 109,061 107,600 108,673 106,510
========= ========= =========== ===========
BEVERLY ENTERPRISES, INC.
SUPPLEMENTARY INFORMATION
Three Months Ended Nine Months Ended
September 30, September 30,
---------- ---------- ---------- ----------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Number of Nursing Home
Facilities:
Owned 264 294 264 294
Leased 91 114 91 114
---------- ---------- ---------- ----------
Total 355(1) 408 355(1) 408
========== ========== ========== ==========
Number of Beds:
Owned 27,327 31,071 27,327 31,071
Leased 10,004 12,489 10,004 12,489
---------- ---------- ---------- ----------
Total 37,331(1) 43,560 37,331(1) 43,560
========== ========== ========== ==========
Assisted Living Centers 18 21 18 21
Home Care Centers 45 22 45 22
Outpatient Clinics 10(1) 10 10(1) 10
Nursing Patient Days 2,828,000 2,852,000 8,428,000 8,462,000
Nursing Home Occupancy -
Continuing Ops (based on
operational beds) 89.00% 88.33% 88.58% 88.03%
Operational beds 34,395 35,036 34,395 35,036
Patient Mix (based on
patient days):
Medicaid 71.56% 71.08% 70.83% 70.53%
Medicare 11.42% 11.31% 12.13% 11.77%
Private & Other 17.02% 17.61% 17.04% 17.70%
Sources of Revenue (based
on $):
Medicaid 50.84% 53.45% 50.41% 52.19%
Medicare 27.61% 25.59% 28.05% 26.50%
Private & Other 21.55% 20.96% 21.54% 21.31%
Nursing Average per diem
rate (including
ancillaries) $160.66 $149.88 $159.58 $147.89
Hospice Average Daily
Census 1,792 952 1,293 863
Aegis Outside Contracts 592 480 592 480
Wages and related expenses
as a % of revenues 59.18% 59.83% 57.62% 60.02%
(1) 24 Nursing Home Facilities and 10 Outpatient Clinics are held for
sale as of September 30, 2004.
BEVERLY ENTERPRISES, INC.
SUPPLEMENTARY INFORMATION
ANALYSIS OF REVENUES
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ----------------------
2004 2003 2004 2003
-------- -------- ---------- ----------
REVENUES (In thousands)
-----------------------
NURSING FACILITIES:
MEDICAID $258,577 $247,784 $ 750,864 $ 704,138
MEDICARE 104,220 95,716 329,350 293,678
PRIVATE & OTHER 92,887 85,582 268,946 259,255
-------- -------- ---------- ----------
SUBTOTAL 455,684 429,082 1,349,160 1,257,071
AEGIS THERAPIES 31,975 20,044 89,023 55,444
HOSPICE/HOME CARE 19,247 10,369 42,399 27,757
OTHER 1,263 1,706 5,722 4,758
-------- -------- ---------- ----------
TOTALS $508,169 $461,201 $1,486,304 $1,345,030
======== ======== ========== ==========
NURSING PATIENT DAYS
(In thousands)
--------------------
MEDICAID 2,024 2,027 5,970 5,968
MEDICARE 323 322 1,022 996
PRIVATE & OTHER 481 503 1,436 1,498
-------- -------- ---------- ----------
TOTALS 2,828 2,852 8,428 8,462
======== ======== ========== ==========
NURSING PER DIEM RATES
(Including Ancillaries)
------------------------
MEDICAID $ 126.26 $ 119.95 $ 124.34 $ 116.87
MEDICARE - PART A 326.04 296.88 322.16 294.78
PRIVATE & OTHER 158.96 150.37 157.09 148.89
-------- -------- ---------- ----------
TOTALS(1) $ 160.66 $ 149.88 $ 159.58 $ 147.89
======== ======== ========== ==========
(1) Weighted Average Rates
BEVERLY ENTERPRISES, INC.
SUPPLEMENTARY INFORMATION
ANALYSIS OF OTHER OPERATING AND ADMINISTRATIVE EXPENSES
(In thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2004 2003 2004 2003
--------- --------- --------- ---------
SUPPLIES $ 28,425 $ 27,376 $ 85,257 $ 80,028
FOOD 9,594 10,387 29,038 31,767
UTILITIES 12,702 12,387 40,938 39,121
OTHER CONTROLLABLES 53,725 41,768 156,527 125,535
REAL ESTATE RENTAL 8,066 7,970 24,018 24,562
EQUIPMENT RENTAL 4,728 3,956 13,353 12,308
OTHER NONCONTROLLABLES 14,320 12,654 42,318 33,548
--------- --------- --------- ---------
TOTALS $131,560 $116,498 $391,449 $346,869
========= ========= ========= =========
BEVERLY ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
2003
---------------------------------------------------
1st qtr 2nd qtr 3rd qtr 4th qtr YTD
--------- --------- --------- --------- -----------
Revenues $437,598 $446,231 $461,201 $475,116 $1,820,146
Costs and
expenses:
Wages and related 263,197 268,170 275,922 279,914 1,087,203
Provision for
insurance and
related items 24,492 29,781 27,892 29,300 111,465
Other operating
and
administrative 116,079 114,292 116,498 123,200 470,069
Depreciation and
amortization 14,287 14,564 14,783 15,514 59,148
Adjustment
related to
California
investigation
settlement - (925) - - (925)
Asset
impairments,
workforce
reductions and
other unusual
items 1,187 142 1,343 1,153 3,825
--------- --------- --------- --------- -----------
Total costs and
expenses 419,242 426,024 436,438 449,081 1,730,785
--------- --------- --------- --------- -----------
Income before
other income
(expenses) 18,356 20,207 24,763 26,035 89,361
Other income
(expenses):
Interest expense (15,996) (15,736) (16,029) (15,553) (63,314)
Costs related to
early
extinguishment
of debt - - - (6,634) (6,634)
Interest income 1,211 1,173 1,170 1,809 5,363
Net gains
(losses) on
dispositions (194) 591 2 23 422
Gain on sale of
equity
investment - - - 6,686 6,686
--------- --------- --------- --------- -----------
Total other
expenses, net (14,979) (13,972) (14,857) (13,669) (57,477)
--------- --------- --------- --------- -----------
Income before
provision for
income taxes and
discontinued
operations 3,377 6,235 9,906 12,366 31,884
Provision for
income taxes 1,236 1,201 1,853 779 5,069
--------- --------- --------- --------- -----------
Income before
discontinued
operations 2,141 5,034 8,053 11,587 26,815
Discontinued
operations, net
of taxes of
$3,378 10,047 12,457 1,930 29,219 53,653
--------- --------- --------- --------- -----------
Net income $12,188 $17,491 $9,983 $40,806 $80,468
========= ========= ========= ========= ===========
Net income per
share of common
stock:
Basic:
Before
discontinued
operations $0.02 $0.05 $0.08 $0.11 $0.25
Discontinued
operations 0.10 0.11 0.01 0.27 0.50
--------- --------- --------- --------- -----------
Net income per
share of
common stock $0.12 $0.16 $0.09 $0.38 $0.75
========= ========= ========= ========= ===========
Shares used to
compute basic
net income per
share 104,743 107,156 107,142 107,201 106,582
========= ========= ========= ========= ===========
Diluted:
Before
discontinued
operations $0.02 $0.05 $0.07 $0.11 $0.25
Discontinued
operations 0.10 0.11 0.02 0.27 0.50
--------- --------- --------- --------- -----------
Net income loss
per share of
common stock $0.12 $0.16 $0.09 $0.38 $0.75
========= ========= ========= ========= ===========
Shares used to
compute
diluted net
income per
share 104,743 107,161 107,600 108,089 106,920
========= ========= ========= ========= ===========
For all periods presented, amounts have been adjusted to exclude
discontinued operations as of September 30, 2004.
BEVERLY ENTERPRISES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
September 30, December 31,
2004 2003
------------- ------------
(Unaudited) (Note)
ASSETS
Current assets:
Cash and cash equivalents $207,360 $258,815
Accounts receivable, less allowance for
doubtful accounts: 2004 - $33,326; 2003 -
$31,615 215,338 164,635
Notes receivable, less allowance for
doubtful notes: 2004 - $2,300; 2003 -
$3,336 6,499 13,724
Operating supplies 9,250 10,425
Assets held for sale 15,128 3,498
Investment in Beverly Funding Corporation - 31,342
Prepaid expenses and other 39,135 33,377
------------- ------------
Total current assets 492,710 515,816
Property and equipment, net 646,860 694,220
Other assets:
Goodwill, net 124,467 57,102
Other, less allowance for doubtful
accounts and notes: 2004 - $1,462; 2003 -
$2,120 70,635 79,283
------------- ------------
Total other assets 195,102 136,385
------------- ------------
$1,334,672 $1,346,421
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $59,081 $67,572
Accrued wages and related liabilities 95,478 116,717
Accrued interest 9,066 6,896
General and professional liabilities 63,422 93,736
Federal government settlement obligations 14,064 13,125
Liabilities held for sale 622 672
Other accrued liabilities 87,143 102,289
Current portion of long-term debt 11,644 13,354
------------- ------------
Total current liabilities 340,520 414,361
Long-term debt 558,488 552,873
Other liabilities and deferred items 173,971 141,001
Commitments and contingencies
Stockholders' equity:
Preferred stock, shares authorized:
25,000,000 - -
Common stock, shares issued: 2004 -
116,241,478; 2003 - 115,594,806 11,624 11,559
Additional paid-in capital 897,476 895,950
Accumulated deficit (538,909) (560,825)
Treasury stock, at cost: 8,283,316 (108,498) (108,498)
------------- ------------
Total stockholders' equity 261,693 238,186
------------- ------------
$1,334,672 $1,346,421
============= ============
Note: The balance sheet at December 31, 2003 has been derived from
the audited consolidated financial statements at that date but does
not include all of the information and footnotes required by generally
accepted accounting principles in the United States for complete
financial statements.
BEVERLY ENTERPRISES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
Nine Months Ended
September 30,
-------------------
2004 2003
--------- ---------
Cash flows from operating activities:
Net income $21,916 $39,662
Adjustments to reconcile net income to net
cash provided by (used for) operating
activities, including discontinued
operations:
Depreciation and amortization 47,656 52,845
Provision for reserves on accounts, notes
and other receivables, net 10,772 22,670
Amortization of deferred financing costs 2,107 3,655
Costs related to early extinguishments of
debt 40,430 -
Asset impairments, workforce reductions
and other unusual items 3,799 5,224
Gains on dispositions of facilities and
other assets, net (455) (47,254)
Adjustment related to California
investigation settlement - (925)
Insurance related accounts (12,833) 4,189
Changes in operating assets and
liabilities, net of acquisitions and
dispositions:
Accounts receivable (53,955) (20,153)
Prepaid expenses 8,139 (6,635)
Accounts payable and other accrued
expenses (23,140) 2,501
Income taxes (2,497) 2,337
Other, net (4,219) (4,689)
--------- ---------
Total adjustments 15,804 13,765
--------- ---------
Net cash provided by operating
activities 37,720 53,427
Cash flows from investing activities:
Capital expenditures (37,964) (29,054)
Payments for acquisitions, net of cash
acquired (71,479) (404)
Proceeds from dispositions of facilities
and other assets, net 22,346 173,102
Proceeds from Beverly Funding Corporation
investment 28,956 -
Collections on notes receivable 32,268 510
Payments for designated funds, net (958) (5,320)
Other, net (24,316) (9,010)
--------- ---------
Net cash (used for) provided by
investing activities (51,147) 129,824
Cash flows from financing activities:
Repayments of long-term debt (207,479) (58,212)
Repayments of off-balance sheet financing - (69,456)
Proceeds from issuance of new debt 211,384 -
Proceeds from exercise of stock options 1,399 98
Deferred financing and other costs (43,332) (2,409)
--------- ---------
Net cash used for financing activities (38,028) (129,979)
--------- ---------
Net increase (decrease) in cash and cash
equivalents (51,455) 53,272
Cash and cash equivalents at beginning of period 258,815 115,445
--------- ---------
Cash and cash equivalents at end of period $207,360 $168,717
========= =========
Supplemental schedule of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized $30,969 $45,799
Income tax payments, net 5,821 1,953
BEVERLY ENTERPRISES, INC.
EBITDA Reconciliation
(In thousands, except per share amounts)
Three Months Ended
September 30,
-------------------
2004 2003
--------- ---------
Revenues $508,169 $461,201
Costs and expenses:
Wages and related 300,734 275,922
Provision for insurance and related items 29,407 27,892
Other operating and administrative 131,560 116,498
Asset impairments, workforce reductions
and other unusual items (613) 1,343
Net gains on dispositions (582) (2)
--------- ---------
Total costs and expenses 460,506 421,653
--------- ---------
EBITDA (Continuing operations) 47,663 39,548
Other income (expenses):
Depreciation and amortization (15,918) (14,783)
Interest expense (11,122) (16,029)
Costs related to early extinguishments of
debt (176) -
Interest income 1,246 1,170
Adjustment related to California
investigation settlement - -
--------- ---------
Total other expenses, net (25,970) (29,642)
--------- ---------
Income before provision for income taxes and
discontinued operations 21,693 9,906
Provision for income taxes 536 1,853
--------- ---------
Income before discontinued operations 21,157 8,053
Discontinued operations, net of taxes: 2004 -
$(59); 2003 - $0 3,243 1,930
--------- ---------
Net income $24,400 $9,983
========= =========
Net income (loss) per share of common stock:
Basic:
Before discontinued operations $0.20 $0.08
Discontinued operations, net of taxes 0.03 0.01
--------- ---------
Net income per share of common stock $0.23 $0.09
========= =========
Shares used to compute basic net income
per share 108,039 107,142
========= =========
Diluted:
Before discontinued operations $0.19 $0.07
Discontinued operations, net of taxes 0.03 0.02
--------- ---------
Net income per share of common stock $0.22 $0.09
========= =========
Shares used to compute diluted net income
per share 109,061 107,600
========= =========
Beverly Enterprises, Inc.
Projected 2004 Continuing Operations EBITDA Range Reconciliation
(In millions)
Projected EBITDA $180.0 $185.0
Depreciation and amortization 63.0 63.0
Costs related to early extinguishment of debt 40.4 40.4
Interest expense 46.1 46.1
Interest income (5.2) (5.2)
------- -------
Pre-tax income $ 35.7 $ 40.7
======= =======
Beverly Enterprises, Inc.
Nursing Facility EBITDA
Reconciliation
(In millions)
Three Months Ended
September 30,
-----------------
2004 2003
-------- --------
Revenues $ 455.7 $ 429.1
EBITDA $ 41.2 $ 28.5
Depreciation and amortization 13.5 12.3
Interest expense 1.8 3.1
Interest income (0.5) (0.7)
-------- --------
Pre-tax income $ 26.4 $ 13.8
======== ========
Hospice USA, LLC
Projected 2004 EBITDA
Reconciliation
(In thousands)
Projected EBITDA $2,038
Depreciation and amortization 284
Interest expense -
Interest income -
-------
Pre-tax income $1,754
=======
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