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ADVOCAT ANNOUNCES FOURTH QUARTER RESULTS
FRANKLIN, Tenn. - (March 31, 2003) - Advocat Inc. (NASDAQ OTC: AVCA) today announced its results for the fourth quarter and year ended December 31, 2002. The
Company reported a net loss for common stock of $6.6 million, or $1.20 per share, in the fourth quarter of 2002 compared to $8.6 million, or $1.57 per share, in the same period in 2001. The loss for the fourth
quarter of 2002 included $1.8 million for impairment of long-lived assets and non-recurring charges, compared with $4.8 million for such charges in the fourth quarter of 2001. Net revenues for the fourth
quarter of 2002 decreased 8.0% to $49.2 million compared with $53.5 million in the same period of 2001.
Fourth Quarter Results
Net revenues for the fourth quarter of 2002 totaled $49.2
million compared with $53.5 million in the same quarter of the prior year, a decrease of 8.0%. Patient and resident revenues were $48.2 million compared with $52.6 million in the fourth quarter of 2001. The
decrease in revenue results from previously announced lease terminations and a facility sale during 2002 and the fourth quarter of 2001. Revenues were also reduced by lower census and lower Medicare
reimbursement rates following the expiration of temporary payment increases effective October 1, 2002. Management fees were $861,000 compared with $910,000 in the fourth quarter of 2001.
Total
expenses declined to $55.9 million compared with $61.9 million in the fourth quarter of 2001. Operating expenses represented 88% of revenues for the latest quarter compared with 85% of revenues in the fourth
quarter of 2001.
The Company reported a net loss for common stock of $6.6 million, or $1.20 per share, in the fourth quarter of 2002 compared with a loss of $8.6 million, or $1.57 per share, in the fourth
quarter of 2001. The 2002 results include $1.8 million in charges for impairment of long-lived assets and non-recurring charges and the 2001 results include similar charges of $4.8 million.
2002 Results
Net revenues for 2002 were $199.1 million compared with $206.2 million in 2001, a decrease of 3.4%. Patient revenues increased to $166.5 million in 2002 from $162.2 million in 2001. The increase
in patient revenues were due to increased Medicare utilization, Medicare rate increases at several facilities and increased Medicaid rates in certain states, partially offset by a 1.9% decline in census, the
reduction in Medicare reimbursement rates in the fourth quarter of 2002, and reductions in revenues resulting from the sale of one nursing home facility in 2002 and lease terminations at two nursing home facilities
in 2001. Resident revenues declined to $29.4 million compared with $40.7 million in 2001 due to the previously announced lease terminations during 2002. Management fees totaled $2.9 million in 2002
compared with $3.0 million in 2001.
Total expenses declined to $212.0 million in 2002 compared with $227.8 million in 2001. Operating expenses represented 84% of net revenues in 2002 compared with 86%
in 2001.
The Company reported a net loss for common stock of $13.3 million, or $2.42 per share, in 2002 compared with a loss of $22.3 million, or $4.06 per share, for 2001. The loss for 2002 included
$3.4 million for impairment of long-lived assets and non-recurring charges and similar charges of $4.8 million in 2001.
Forward-looking statements made in this release involve a number of risks and
uncertainties, including but not limited to, uncertainty regarding the Company’s ability to restructure or refinance its debt, the impact of under insured professional liability claims, 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. is not responsible for updating the information contained in this press release beyond the published date, or for
changes made to this document by wire services or Internet services.
Advocat Inc. provides long-term care services to nursing home patients and residents of assisted living facilities in 10 states, primarily
in the Southeast, and three provinces in Canada.
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