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HILLHAVEN ANNOUNCES 1992 SECOND-QUARTER RESULTS, EXECUTIVE APPOINTMENT; DIVISIONAL CONSOLIDATION

 HILLHAVEN ANNOUNCES 1992 SECOND-QUARTER RESULTS,
 EXECUTIVE APPOINTMENT; DIVISIONAL CONSOLIDATION
 TACOMA, Wash., Jan. 7 /PRNewswire/ -- The Hillhaven Corp. (AMEX: HIL) today announced results for its second quarter ended Nov. 30, 1991.
 The company reported a net loss of $87,354,000, following a previously announced $90,000,000 restructuring charge to reflect the estimated losses from the planned disposition of 82 nursing centers. The loss for the quarter compares to net earnings of $17,000 for the same quarter in the prior year. For the six-month period ended Nov. 30, 1991, Hillhaven reported a net loss of $87,115,000, which compares to net earnings of $340,000 for the six-month period in the prior year.
 Net operating revenues for the quarter increased 11.3 percent to $333,353,000, compared to $299,605,000 in the same quarter last year. Nursing center revenues rose 10.2 percent to $296,117,000 from $268,635,000 in the same quarter last year, while pharmacy revenues climbed 18.3 percent to $36,270,000 from $30,655,000 in the prior year's quarter.
 For the six-month period, net operating revenues increased 10.8 percent to $657,635,000, compared to $593,691,000 for the same period in the prior year. Nursing center revenue rose 9.6 percent to $584,038,000 from $532,706,000, while pharmacy revenues climbed 19.6 percent to $72,332,000, compared to $60,464,000 in the first half of last year.
 Average nursing center occupancy was 90.8 percent for the quarter, up from 90.5 percent in the previous quarter, but down slightly from 90.9 percent a year ago.
 On Dec. 5, 1991, Hillhaven announced a major restructuring to improve its long-term financial and operating performance. The company recorded a second-quarter restructuring charge based upon estimated losses on the planned disposition of 82 nursing centers, operating losses during the disposition period and other costs related to the dispositions.
 The restructuring also includes the modification of existing lease arrangements with National Medical Enterprises Inc. (NME), the purchase from NME of nine nursing centers and the sale to NME of $35 million of preferred stock, the proceeds of which were used to prepay existing indebtedness to NME.
 Hillhaven and NME renegotiated lease terms on the remaining nursing centers, eliminating contingent rent obligations. Contingent rent had limited Hillhaven's net earnings since the spin-off from NME in 1990.
 "Our restructured lease agreements will allow Hillhaven the opportunity to produce greater earnings and enhance shareholder value," said Bruce Busby, Hillhaven's chief executive officer.
 Separately, Hillhaven announced that Jeff McKain has been appointed executive vice president, with responsibility for directing Hillhaven's nursing center operations. McKain was previously senior vice president with responsibility for Hillhaven's Western Division nursing center operations. Hillhaven's two geographic divisions will be merged into a consolidated, nationwide operation.
 The Hillhaven Corp. is a leading provider of quality long-term health care. The company operates and manages 359 nursing centers located in 37 states, 25 retirement housing communities located in 15 states, as well as two continuing care retirement communities. Its Medisave Pharmacies subsidiary operates 119 retail and institutional pharmacies in 23 states. Hillhaven provides care for over 42,000 people on a daily basis and employs more than 40,000 individuals nationwide.
 Schedules follow.
 THE HILLHAVEN CORP. - QUARTERLY FINANCIAL UPDATE
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited, dollars in thousands, except per-share amounts)
 Three Months Six Months
 Ended Nov. 30: 1991 1990 1991 1990
 Net operating revenues $333,353 $299,605 $657,635 $593,691
 Expenses:
 Operating and administrative 291,358 260,910 575,098 516,335
 Rent 21,192 24,365 44,005 49,902
 Interest 10,371 8,880 19,960 17,596
 Depreciation and amortization 9,903 7,293 18,943 14,268
 Guarantee fees 2,053 1,763 4,047 3,507
 Restructuring charge 90,000 -- 90,000 --
 Total expenses 424,877 303,211 752,053 601,608
 Loss from operations (91,524) (3,606) (94,418) (7,917)
 Interest income 3,218 4,171 6,324 8,938
 Income (loss) before taxes (88,306) 565 (88,094) 1,021
 Income tax expense (benefit) (952) 548 (979) 681
 Net income (loss) $(87,354) $ 17 $(87,115) $ 340
 Earnings (loss) per share $ (0.84) $ 0.000 $ (0.84) $ 0.003
 Three Months Six Months
 Ended Nov. 30: 1991 1990 1991 1990
 Shares used in
 per-share
 calculation 104,000,126 102,758,442 103,978,101 102,758,442
 THE HILLHAVEN CORP. - QUARTERLY FINANCIAL UPDATE
 SELECTED FINANCIAL DATA AND OPERATING STATISTICS
 (Dollars in thousands)
 Three Months Six Months
 Ended Nov. 30: 1991 1990 1991 1990
 Net operating revenues:
 Nursing centers $296,117 $268,635 $584,038 $532,706
 Pharmacies 36,270 30,655 72,332 60,464
 Gain on sale of assets 966 315 1,265 521
 Total $333,353 $299,605 $657,635 $593,691
 Operating income before
 property-related expenses
 and the restructuring charge(A):
 Nursing centers $ 35,371 $ 33,888 $ 70,732 $ 68,635
 Pharmacies 5,658 4,492 10,540 8,200
 Gain on sale of assets 966 315 1,265 521
 Total $ 41,995 $ 38,695 $ 82,537 $ 77,356
 Nursing centers owned or
 operated at end of period 342 344 342 344
 Number of licensed beds 42,492 42,481 42,492 42,481
 Average occupancy (percents) 90.8 90.9 90.7 90.9
 Nursing centers managed on
 behalf of others 17 20 17 20
 Sources of net patient revenue:
 Medicare (percents) 14.2 11.5 13.6 11.5
 Medicaid (percents) 57.4 58.0 57.7 57.7
 Private and other (percents) 28.4 30.5 28.7 30.8
 Pharmacy outlets at end of period 119 115 119 115
 Continuing care retirement
 communities at end of period 2 1 2 1
 Retirement housing communities
 (a discontinued operation) at
 end of period 25 25 25 25
 (A) Property-related expenses include depreciation and amortization, interest, rent and guarantee fees.
 -0- 1/7/92
 /CONTACT: Tim Carroll of The Hillhaven Corp., 206-572-4901/
 (HIL) CO: The Hillhaven Corp. ST: Washington IN: HEA SU: ERN


SC-JH -- SE005 -- 7205 01/07/92 09:34 EST
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