Long Term Care Report
June 1, 2000
Long Term Care Report
• Genesis Health Ventures (Kennett Square, PA) says a required a majority of lenders under its senior credit agreement have agreed to an extension of the company’s current forbearance period through June 30. During the forbearance period, Genesis is working with financial advisor Merrill Lynch and certain senior lenders to revise the company’s capital structure. Genesis says it did not make scheduled interest and principal payments under the initial forbearance agreement or intetest payments on subordinated debt. During the extension, the company has agreed to pay a substantial portion of current interest payments due to senior bank lenders. In other news, Genesis’ The Multicare Companies (Kennett Square, PA) subsidiary has agreed to sell all of its Ohio facilities to Trans Healthcare (Camp Hill, PA) for $36.5 million in cash. The transaction includes 1,128 beds, composed of nine owned skilled nursing facilities, four leased skilled nursing facilities, one owned assisted living facility, and the company’s regional headquarters building. The sale is part of Multicare’s planned debt reduction strategy.
• Fountain View (Burbank, CA), which operates 50 long term care centers in Arizona, California, and Texas, reported 1Q00 ended March 31 total revenues of $71.6 million, up from 1Q00 net revenues of $69 million. The company recorded a pre-tax charge in 1Q00 of $1.7 million relating to the decertification of one of its skilled nursing facilities. Fountain View says it continues to contest the decerification and anticipates that the facility will be reinstated into the Medicare and Medicaid programs in May 2000.
• National HealthCare (NHC; Murfreesboro, TN) says it recorded a 1Q00 ended March 31 net income of $2.4 million, 21 cents per share, up slightly from a 1Q99 net income of $2.2 million, 20 cents per share. NHC’s revenues were $115.4 million, compared to 1Q99 revenues of $107.9 million. NHC says it is currently in default on certain financial covenants on a loan it guarantees. The company is negotiating with the lender to waive the default, but the negotiations are not complete, NHC says.
• Vencor (Louisville, KY) reported total revenues in 1Q00 ended March 31 of $715 million, compared to $700 million in 1Q99. The loss to common shareholders in 1Q00 was $16 million, 23 cents per share, up from a net loss to common shareholders in 1Q99 of $23.9 million, 34 cents per share. Vencor says it recorded a charge of $9 million, 13 cents per share, in 1Q00 related to a change in accounting for start-up costs.
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