Brentwood-based long-term care provider Advocat has reported increased revenue and earnings in the first quarter of 2010, and this morning it issued a statement correcting errors in a local analyst's report.
In the quarter ended March 31, Advocat's revenue rose 3.6 percent to $70.2 million and net income was $822,000, or 14 cents per diluted share, compared to $277,000, or 5 cents per diluted share, in Q1 2009.
Because Advocat ended its lease of four Florida nursing homes in March, it restated its numbers to move the financial results of those nursing homes into discontinued operations. The company's EPS includes 3 cents from discontinued operations in the quarter and 2 cents in the year-ago quarter.
Advocat CEO Will Council said on this morning's conference call that analyst Brian Williams of Avondale Partners did not accurately account for the Florida operations in a recent research report. "The Avondale analyst incorrectly compared our earnings and revenue numbers from continuing operations to their models, which were based on the total results of operations," Council said.
Analyst Brian Williams issued a revised research report Thursday afternoon. He gives Advocat a 'market perform' rating and a $6 price target.
Council called the company’s performance in the quarter a continuation of Advocat's steady improvements each quarter and a good start to 2010.
The company increased occupancy to 77.5 percent from 75.7 percent quarter over quarter, and its total average daily census increased about 3 percent to 4,165. Professional liability expense dropped $1.5 million in the quarter, though operating costs overall increased slightly as a percentage of revenue mainly due to a $1.5 million increase in wages.
Concurrent with its earnings report, Advocat also increased its quarterly dividend rate 10 percent to 5.5 cents per common share.
And in a filing with the Securities and Exchange Commission today, Advocat said Ray Tyler, its senior vice president of nursing home operations, plans to retire on May 24 to work for a privately held nursing home business in another state. The company expects to incur about $350,000 in severance and other expenses in the coming quarter related to Tyler’s departure.
Advocat's stock (Ticker: AVCA) was trading down more than 7 percent Thursday afternoon. Year to date, it is down about 25 percent.