Fountain View Reports Second Quarter Results.BURBANK, Calif.--(BUSINESS WIRE)--Aug. 16, 1999-- 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 second quarter ended June 30, 1999. On March 27, 1998, the Company completed the acquisition of Summit Care Corporation ("Summit") which was accounted for as a purchase. As such, the Company's actual financial results include the Summit operations since the date of acquisition. Net revenues for the second quarter of 1999 were $68,001,000 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 $10,200,000, or 15.0% of net revenues. For the second quarter of 1998, net revenues were $68,291,000 and EBITDA was $8,681,000, or 12.7% of net revenues. Net revenues for the six months ended June 30, 1999 were $137,017,000 and EBITDA was $21,144,000 or 15.4% of net revenues. For the six months ended June 30, 1998, net revenues were $88,369,000 and EBITDA was $11,505,000, or 13.0% of net revenues. Although the Company's results for the second quarter were favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. compared to the same quarter last year, the results were down compared to the first quarter of 1999. Net revenues for the first quarter of 1999 were $69,016,000 and EBITDA was $10,944,000, or 15.9% of net revenues. This shortfall from the first quarter was substantially due to a decline in census, wage pressures at certain of its facilities and the difficult regulatory environment throughout the long term care industry. To reverse this trend, management has implemented a two-pronged program aimed at increasing census and reducing costs throughout its network of facilities. Management believes that these efforts will take some time to begin to be reflected in its financial results. Management believes that the census decline is principally the result of the Balanced Budget Balanced budget A budget in which the income equals expenditure. See: budget. balanced budget A budget in which the expenditures incurred during a given period are matched by revenues. Act, specifically the change in behavior of the acute care hospitals as a result of certain provisions impacting their reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. for patients previously discharged to the Company's facilities. The most significant of these items is the provision impacting patients in the "top ten DRGs" who now remain in hospitals longer than may be medically necessary medically necessary Managed care adjective Referring to a covered service or treatment that is absolutely necessary to protect and enhance the health status of a Pt, and could adversely affect the Pt's condition if omitted, in accordance with accepted , causing a decline in revenue for the 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. whose census is impacted. The Company is also experiencing wage pressures in certain of its markets as a result of the tight labor market 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 throughout the country. Recent legislation in California will create additional wage pressures on our facility operations with provisions that become effective on August 1, 1999 and on January 1, 2000. The Medicaid rate increase as of August 1, 1999 will not be sufficient to cover these increases in costs. In addition, management believes that anticipated private rate increases will be difficult to implement in the California market due to existing vacancies in the market. Finally, management continues to carefully monitor the changes in the regulatory environment which reflects the increased attention by the government, the press and consumer groups to the industry. Thirty-six of the Company's nursing centers implemented 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. on July 1, 1998, and results continue to meet management's expectations. The remaining eight nursing centers implemented PPS effective January 1, 1999 and management's expectations are also being met. Fountain View is a leading operator of long-term care facilities and a leading provider of a full continuum of post-acute care services, with a strategic emphasis on sub-acute specialty medical care. The Company operates a network of facilities in California, Texas and Arizona, including 44 skilled nursing and six 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. In addition to 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. , the Company provides a variety of high-quality ancillary services such as physical, occupational and speech therapy and pharmacy services. 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. -0-
Fountain View, Inc.
Summarized Financial Results
Unaudited
(Dollars in Thousands)
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
---- ---- ---- ----
Net revenues $ 68,001 $ 68,291 $ 137,017 $ 88,369
Earnings before rent,
depreciation
and amortization,
interest and the
provision for
income taxes
(EBITDAR) 11,940 10,380 24,631 14,187
Earnings before
depreciation
and amortization,
interest and the
provision for
income taxes
(EBITDA) 10,200 8,681 21,144 11,505
Earnings (loss)
before provision
for income taxes 150 (97) 1,615 1,353
Net income (loss) $ (87) $ (58) $ 615 $ 295
-------- -------- ------- -------
Census 83.0% 84.4% 83.3% 84.7%
Quality mix 62.7% 63.5% 63.4% 66.6%
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion