Fountain View Reports First Quarter Results.Business Editors BURBANK, Calif.--(BUSINESS WIRE)--May 21, 2001 Fountain View, Inc. (the "Company"), a leading operator of 50 long-term care facilities long-term care facility n. See skilled nursing facility. in California, Texas and Arizona, today announced results for the first quarter ended March 31, 2001. During the first quarter of 2000, the Company recorded a charge for an item discussed below. This charge has been excluded from the financial information presented to assist with the comparability of the financial results. Net revenues for the first quarter of 2001 were $76,863,000 and 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 was $7,910,000, or 10.3% of net revenues. For the first quarter of 2000, net revenues were $71,567,000 and EBITDA was $10,995,000, or 15.4% of net revenues. The information contained in this paragraph is presented prior to the impact of the charge discussed below. In the first quarter of 2000, the Company recorded a pre-tax charge of $1,698,000 relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the decertification of one of its SNFs. As previously reported, the Company regained 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. certification for this facility beginning December 1, 2000 and has received reimbursement for services provided since that date. As was also previously reported, the decertification of this facility was reversed by an administrative law judge administrative law judge n. a professional hearing officer who works for the government to preside over hearings and appeals involving governmental agencies. They are generally experienced in the particular subject matter of the agency involved or of several agencies. and the Health Care Financing Administration Health Care Financing Administration, n.pr department in the U.S. agency of Health and Human Services responsible for the oversight of the Medicaid and Medicare benefit programs, including guidelines, payment, and coverage policies. has appealed this decision. While the earnings of the Company for the first quarter of 2001 were in line with management's expectations, they were significantly lower than last year due primarily to increases in wage rates, and workers compensation and professional liability costs. Medicare rate increases enacted April 1, 2001 should benefit the remainder of the year. However, the Company continues to be concerned about census, tight labor markets labor market A place where labor is exchanged for wages; an LM is defined by geography, education and technical expertise, occupation, licensure or certification requirements, and job experience and the overall industry environment surrounding professional liability insurance. For the quarter ended March 31, 2001, the Company was not in compliance with certain financial covenants and reporting requirements under its Term Loan and Revolving Credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. Facility. These defaults are in addition to the previously reported technical defaults noted in the Company's December 31, 2000 financial statements. To date, the Company has been unable to obtain a waiver of these defaults from its lenders under this credit facility but intends to continue its discussions with such lenders to resolve this matter. As a result of these defaults, the Company's lenders have the right to accelerate payment of the amounts due under this credit facility. As previously reported, the Company elected to defer, for thirty days, the interest payment due April 16, 2001 on its Senior Subordinated Notes. During the deferral deferral - Waiting for quiet on the Ethernet. period, the Company was negotiating with its lenders to restructure its Term Loan and Revolving Credit Facility, with the intention of having sufficient funds available to make the interest payment on the Senior Subordinated Notes by May 15, 2001. However, the Company was unable to restructure its Term Loan and Revolving Credit Facility and the interest payment was not made on May 15, 2001, as required. As a result, the holders of the Company's Senior Subordinated Notes have the right to accelerate payment of these notes, while the payment default continues. The Company intends to begin discussions with holders of its Senior Subordinated Notes and other interested parties in order to resolve this matter. This press release may make certain 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. as defined in 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 regarding the future earnings and revenues and plans of the Company. Any such forward-looking statements are subject to various risks and uncertainties that might cause actual results to vary materially. Such risks are described in the Company's annual filing on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. on file with the Securities and Exchange Commission.
Fountain View, Inc.
Summarized Financial Results
(Dollars in Thousands)
Three Months Ended
March 31,
2001 2000
Net revenues $ 76,863 $ 71,567
EBITDAR 9,764 12,761
EBITDA $ 7,910 $ 10,995
Occupancy Percentage
Nursing Centers 84.3% 84.4%
Assisted Living Centers 66.2% 68.6%
Total 82.5% 82.7%
NOTE: The amounts presented are before a pre-tax charge of $1,698
recorded in the first quarter of 2000.
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