EXHIBIT 99.1
ADVOCAT INC.
1621 GALLERIA BOULEVARD
BRENTWOOD, TENNESSEE 37027
(615) 771-7575 NEWS RELEASE
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Contact: William R. Council, III
President and Chief Executive Officer
ADVOCAT ANNOUNCES PLANS TO SELL
NORTH CAROLINA ASSISTED LIVING FACILITIES
BRENTWOOD, Tenn. - (November 29, 2005) - Advocat Inc. (NASDAQ OTC: AVCA) today
announced that it has signed a definitive agreement to sell eleven assisted
living facilities located in North Carolina to Agemark Acquisition, LLC, a North
Carolina limited liability company.
The sales price is approximately $11 million, to be paid at closing. Closing is
contingent on the purchaser's ability to obtain licenses to operate the
buildings. The closing is expected to occur during the first quarter of 2006. A
pre-tax charge of approximately $4.5 million to $5.0 million will be recorded in
the fourth quarter of 2005 to reduce the carrying value of these 11 facilities
to the amount expected to be realized from the proceeds of the sale, after
payment of estimated transaction costs.
Advocat operates one additional assisted living facility in North Carolina. The
Company has executed an agreement to sell this facility for a sales price of
approximately $3.5 million, subject to the satisfactory completion of due
diligence. The buyer of this facility has until the end of the year to conduct
due diligence. If completed, this transaction will result in a pre-tax gain of
approximately $1.3 million in the quarter the facility is sold.
"This sale will allow us to focus on our nursing home operations and reduce our
overall debt," stated William R. Council, Chief Executive Officer. "Though we
worked to stabilize the North Carolina operations, we were not making meaningful
progress toward positive operating results, as the facilities continued to
produce negative cash flow and operate at a loss."
Mortgage debt on the North Carolina buildings is approximately $18 million. The
company expects net proceeds (after costs and commissions) from these
transactions will leave a debt balance of approximately $4.5 million to $5.0
million, which it intends to finance with a term loan from the existing lender,
secured by other properties currently financed by this lender.
FORWARD-LOOKING STATEMENTS
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 complete all of the described transactions and restructure the
remaining debt, the Company's ability to restructure or refinance its debt, the
impact of under-insured professional liability claims, the accuracy of the
Company's estimate of its anticipated professional liability expense, 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. The Company has
provided additional information in its Annual Report on Form 10-K for the fiscal
year ended December 31, 2004, as well as in other filings with the Securities
and Exchange Commission, which readers are encouraged to review for further
disclosure of other factors that could cause actual results to differ materially
from those indicated in the forward-looking statements. 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 nine states, primarily in the
Southeast.
For additional information about the Company, visit Advocat's web site:
http://www.irinfo.com/avc
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