ADVOCAT ANNOUNCES THIRD QUARTER RESULTS

 FRANKLIN, Tenn. - (November 14, 2000) - Advocat Inc. (Nasdaq OTC:AVCA) today announced its results for the third quarter ended September 30, 2000.  The Company reported pre-tax earnings of $233,000 after non-recurring charges of $359,000 in the third quarter of 2000 compared with a loss of $6.6 million for the same period in 1999.  Net income for the quarter was $149,000, or $0.03 per diluted share, compared with a net loss of $4.2 million, or $0.77 per share, in 1999.

 Advocat made substantial progress in improving the financial health of the Company as a result of higher revenues and reduced costs,” stated Charles W. Birkett, M.D., chairman and chief executive officer of Advocat Inc.  “Revenues increased in each segment and rose 13% to $50.3 million compared with the third quarter of last year. We also continued to implement cost reduction programs in response to Medicare reimbursement changes.  After the close of the quarter, we reached agreements with our major lessor and major lender that will enable Advocat to move forward with greater certainty of being able to withstand the significant regulatory and reimbursement pressures and to focus on the operational aspects of our business.”  

 Net revenues for the third quarter ended September 30, 2000, increased 13.0% to $50.3 million compared with net revenues of $44.5 million in 1999.  Net revenues increased 15.0% to $38.4 million in U.S. nursing homes compared with $33.4 million in the third quarter of 1999 and were primarily due to higher patient revenues related to increased Medicare utilization and PPS rate increases at several facilities that became effective April 2000.  Net revenues for U.S. assisted living facilities rose 8.1% to $8.0 million compared with net revenues of $7.4 million in 1999, and Canadian operations were up 5.4% to $3.9 million compared with net revenues of $3.7 million in the third quarter of 1999.

 Total expenses decreased 2.0% to $50.1 million in the third quarter compared with $51.1 million in 1999. Operating expenses declined 2.8% to $38.6 million and represented 76.7% of net revenues in the third quarter of 2000 compared with 89.2% of net revenues in the third quarter of 1999.  General and administrative expenses were down 12.2% to $3.1 million, or 6.1% of revenues, compared with $3.5 million, or 7.8% of revenues, in the third quarter of last year.  Results for the third quarter also included $359,000 in non-recurring charges related to restructuring costs associated with amended lease agreements.

 Effective October 1, 2000, the Company and its major lessor, Omega Healthcare Investors, Inc. (“Omega”), entered into an agreement that includes a new 10-year master lease with respect to 60% of the Company’s skilled nursing facility portfolio.  This new lease provides for a reduction in lease payments and permits the closing or alternative use of a limited number of facilities in exchange for Advocat issuing preferred stock and a subordinated note to Omega.

 The Company and its primary lender also entered into an amendment to the master credit agreement that restructures all current obligations into a $20.4 million line of credit with components that have maturities from January 15, 2002, through September 30, 2004.  The amendment includes a reduction in interest rates, a continued working capital line and a reduction in the bank’s commitment under letters of credit.  Effective with the execution of the amended loan agreement, Advocat is now in compliance with its debt covenants resulting in an additional $38.1 million of debt being reclassified to long term.

 Additionally, Advocat is actively negotiating with a mortgage lender with respect to the refinancing of an acquisition line of approximately $11 million with a maturity of November 30, 2000.  This debt is secured by the assets of four facilities that are owned and operated by the Company.

 The Company believes that, as a result of the restructuring agreements and anticipated acquisition line of credit refinancing, internally generated cash flows from earnings and existing cash balances will be sufficient to fund existing debt obligations through fiscal year 2001.

 Forward-looking statements made in this release involve a number of risks and uncertainties, including but not limited to, factors affecting the long-term care industry in general, governmental reimbursement, government regulation, health care reforms, the impact of future licensing surveys, changing economic and market conditions and other risk factors detailed in the Company’s Securities and Exchange Commission filings.

 Advocat Inc. operates 120 facilities including 56 assisted living facilities with 5,472 units and 64 skilled nursing facilities containing 7,230 licensed beds as of September 30, 2000.  The Company operates facilities in 12 states, primarily in the Southeast, and four provinces in Canada.