FOR IMMEDIATE RELEASE
Company Contact
Harry Dermer, President or
Jack Friedler, CEO
Lexington Healthcare Group, Inc. (NASDAQ: LEXI)
860-674-2700
860-674-5900 Fax
LEXINGTON HEALTHCARE REPORTS RECORD 1Q/99 REVENUES
Farmington, CT November 17, 1998 - Lexington Healthcare Group, Inc.,
(NASDAQ:LEXI), today reported that, for the first three months of fiscal 1999
ended September 30, 1998, revenues were a record $15,698,000 or a 13% increase
from revenues of $13,931,000 during the first three months of fiscal 1998.
Net income for the first three months of fiscal 1999 totaled $104,000 or $.03
per share compared to net income of $279,000 or $.07 per share for the first
three months of fiscal 1998. During its most-recent fiscal year ended June 30,
1998, the Company had net income of $30,000 or $.01 per share. Revenue growth
continued during fiscal 1999, but that overall growth was not enough to offset
higher general expenses recorded in this accounting period.
Revenues in fiscal 1999 grew 13% largely as a result of the joint ventures
started in 1997. However, operating expenses in fiscal 1999 increased over 1998
by 14% because of the new joint ventures and the increased volume in the
ancillary businesses. Net nursing home costs decreased somewhat due to lower
occupancy, offset by higher benefit costs. Interest and corporate,
administrative and general expenses increased due to the new businesses and
acquisitions, higher rent, legal and other administrative costs.
Effective November 1, 1998 the Company began managing four skilled nursing
facilities (with approximately 480 skilled nursing beds) located in Connecticut
for Sun Healthcare Group, Inc. On November 12, 1998 the Company signed formal
agreements to purchase and/or lease these facilities plus an additional facility
with 120 beds located in Westport, CT. The purchase or lease transactions are
expected to close during the first six months of 1999. In total, the Company
will acquire the operation of approximately 600 skilled nursing beds which will
add approximately $48,000,000 in annual revenues.
Jack Friedler, CEO, said "We were able to immediately provide these managed
facilities with our ancillary services which will further increase revenues and
profitability overall."
Lexington Healthcare Group is a provider of management, healthcare and ancillary
services to the long term and home care industries. It operates, manages or has
under contract to acquire eleven nursing facilities with a total of 1,450 beds
in Connecticut, and manages one nursing home with a total of 136 beds in
Massachusetts. It also provides medical supplies, durable medical equipment,
pharmacy and respiratory services.
Lexington Healthcare Group, Inc.
November 16, 1998
Page 2.
This Press Release contains forward-looking statements which involve risks and
uncertainties. The Company's actual results could differ materially from those
anticipated in the forward-looking statements as a result of certain factors.
LEXINGTON HEALTHCARE GROUP, INC.
FINANCIAL HIGHLIGHTS
Three months ended
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September 30, 1998 September 30, 1997
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$$ in thousands, except per share data
Net revenues $15,698 $13,931
Net income $104 $279
Basic earnings per share $0.03 $0.07
Weighted average shares outstanding 4,125,000 4,125,000
As of
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September 30, 1998 June 30, 1998
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Working capital $3,201 $3,074