Diversicare Maintains Momentum at Close of Third Quarter
Despite sustaining monetary damages from Hurricanes Harvey and Irma to the tune of $232,000, Brentwood, Tenn.-based Diversicare Healthcare Services (Nasdaq: DVCR) has maintained “good momentum” as it approaches the end of the year, according to CEO Kelly Gill.
In regards to the storms, Gill credits the company’s “extensive preparation activities” in anticipation of the storms.
“As a result, the centers had the ability to shelter in place, allowing our team to remain [and] maintain care for our patients and residents in the center throughout the duration of the storm,” he said during the company’s third-quarter earnings call.
In the third quarter, the post-acute care company posted a 50.4% increase in net revenue, totaling $146.4 million. Net loss from continuing operations in the third quarter was $600,000, or 9 cents per share, compared to a net loss of $1 million, or 16 cents per share, in a year-over-year analysis.
The company also saw an improvement in occupancy in the third quarter, from 80.4% to 84.7% of available beds year-over-year, representing “a positive trend,” according to Gill.
During the quarter, Diversicare completed the acquisition of its Park Place location in Selma, Alabama. Revenue for the center was in excess of $2.2 million, with less than $1.9 million of operating expense resulting in approximately $380,000 of facility-level operating income in the quarter, Gill explained on the earnings call.
Further, the company also completed a cooperative exit of a single center in Carthage, Mississippi.
“The property owner operates other skilled nursing centers, as well, and had a desire to include this center in his operating portfolio,” Gill said. “With roughly a year remaining on the lease, the owner offered a $250,000 payment to Diversicare to accelerate termination of the lease. Therefore we recorded a payment of $180,000 net of expenses in the quarter.”
The exit of the single center and the acquisition of Selma means Diversicare now owns 18 of its 76 centers, with the remaining 58 leased.
“As we look across the landscape of our industry, we are seeing many challenges, and Diversicare continues to move forward setting a tone of leadership in our space,” Gill said.
Written by Carlo Calma