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EXHIBIT 11.1
BEVERLY ENTERPRISES, INC.
COMPUTATION OF NET INCOME (LOSS) PER SHARE
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
BASIC: 1997 1996 1995 1994 1993
--------- --------- --------- --------- ---------
Income (loss) before redemption premium on
preferred stock and extraordinary charge ................... $ 58,593 $ 52,026 $ (8,123) $ 76,913 $ 57,956
Redemption premium on preferred stock ......................... -- -- -- -- (20,000)
--------- --------- --------- --------- ---------
Income (loss) before extraordinary charge ..................... 58,593 52,026 (8,123) 76,913 37,956
Extraordinary charge, net of income taxes ..................... -- (1,726) -- (2,412) (2,345)
--------- --------- --------- --------- ---------
Net income (loss) ............................................. 58,593 50,300 (8,123) 74,501 35,611
Preferred stock dividends ..................................... -- -- (6,875) (8,250) (4,438)
--------- --------- --------- --------- ---------
Net income (loss) applicable to common shares ................. $ 58,593 $ 50,300 $ (14,998) $ 66,251 $ 31,173
========= ========= ========= ========= =========
Applicable common shares:
Weighted average outstanding shares during the period ....... 102,060 98,574 92,233 85,430 79,735
========= ========= ========= ========= =========
Income (loss) per share of common stock:
Before redemption premium on preferred stock and
extraordinary charge ...................................... $ .57 $ .53 $ (.16) $ .80 $ .67
Redemption premium on preferred stock ....................... -- -- -- -- (.25)
--------- --------- --------- --------- ---------
Before extraordinary charge ................................. .57 .53 (.16) .80 .42
Extraordinary charge, net of income taxes ................... -- (.02) -- (.02) (.03)
--------- --------- --------- --------- ---------
Net income (loss) per share of common stock ................. $ .57 $ .51 $ (.16) $ .78 $ .39
========= ========= ========= ========= =========
DILUTED:
Income (loss) before redemption premium on preferred
stock and extraordinary charge ............................. $ 58,593 $ 52,026 $ (8,123) $ 76,913 $ 57,956
Reduction of interest expense resulting from assumed
conversion of 7 5/8% convertible subordinated debentures ..... -- (b) -- (a) -- (a) -- (a) -- (a)
Reduction of interest expense resulting from assumed
conversion of 5 1/2% convertible subordinated debentures .... -- (c) 8,252 -- (a) -- --
Reduction of interest expense resulting from assumed
conversion of 9% convertible subordinated debentures ........ -- -- -- -- (g) 2,711
Reduction of interest expense resulting from assumed
conversion of zero coupon notes ............................. -- (d) -- (a) -- (a) -- (a) 116
Less applicable income taxes .................................. -- (4,832) -- -- (933)
--------- --------- --------- --------- ---------
Adjusted income (loss) before redemption premium on
preferred stock and extraordinary charge .................... 58,593 55,446 (8,123) 76,913 59,850
Redemption premium on preferred stock ......................... -- -- -- -- (20,000)
--------- --------- --------- --------- ---------
Adjusted income (loss) before extraordinary charge ............ 58,593 55,446 (8,123) 76,913 39,850
Extraordinary charge, net of income taxes ..................... -- (1,726) -- (2,412) (2,345)
--------- --------- --------- --------- ---------
Adjusted net income (loss) .................................... 58,593 53,720 (8,123) 74,501 37,505
Preferred stock dividends ..................................... -- -- (6,875) -- (4,438)
--------- --------- --------- --------- ---------
Adjusted net income (loss) applicable to common shares ........ $ 58,593 $ 53,720 $ (14,998) $ 74,501 $ 33,067
========= ========= ========= ========= =========
Applicable common shares:
Weighted average outstanding shares during the period ....... 102,186 98,574 92,233 85,430 79,735
Assumed conversion of preferred stock ....................... -- -- -- -- (f) -- (a)
Assumed conversion of Preferred Stock ....................... -- -- -- (e) 11,253 -- (a)
Weighted average shares issuable upon exercise of common
stock equivalents outstanding (principally stock
options) using the "treasury stock" method ............... 1,236 899 -- (a) 1,333 1,167
Assumed conversion of 7 5/8% convertible subordinated
debentures ............................................... -- (b) -- (a) -- (a) -- (a) -- (a)
Assumed conversion of 5 1/2% convertible subordinated
debentures ............................................... -- (c) 11,253 -- (a) -- --
Assumed conversion of 9% convertible subordinated
debentures ............................................... -- -- -- -- (g) 4,322
Assumed conversion of zero coupon notes ..................... -- (d) -- (a) -- (a) -- (a) 19
--------- --------- --------- --------- ---------
Total ....................................................... 103,422 110,726 92,233 98,016 85,243
========= ========= ========= ========= =========
Income (loss) per share of common stock:
Before redemption premium on preferred stock and
extraordinary charge ...................................... $ .57 $ .50 $ (.16) $ .78 $ .65
Redemption premium on preferred stock ....................... -- -- -- -- (.23)
--------- --------- --------- --------- ---------
Before extraordinary charge ................................. .57 .50 (.16) .78 .42
Extraordinary charge, net of income taxes ................... -- (.01) -- (.02) (.03)
--------- --------- --------- --------- ---------
Net income (loss) per share of common stock ................. $ .57 $ .49 $ (.16) $ .76 $ .39
========= ========= ========= ========= =========
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(a) Conversion would be anti-dilutive and is therefore not assumed in the
computation of earnings per share of common stock.
(b) The 7 5/8% convertible subordinated debentures were paid off during the
fourth quarter of 1997.
(c) The 5 1/2% convertible subordinated debentures were converted to 11,189,924
shares of common stock during the third quarter of 1997, with the remaining
principal amount redeemed at 103.30%.
(d) The zero coupon notes were repurchased during the second quarter of 1997.
(e) The $2.75 Cumulative Convertible Exchangeable Preferred Stock (the
"Preferred Stock") was exchanged into 5 1/2% convertible subordinated
debentures during the fourth quarter of 1995.
(f) The cumulative convertible preferred stock (the "preferred stock") was
redeemed in January 1994.
(g) The 9% convertible subordinated debentures were converted to Common Stock
during the third quarter of 1993.