Diversicare Healthcare Services reported a third-quarter net loss of $2.9 million in a press release issued Tuesday. The company recorded a net profit of $3.2 million in the same period in 2020.
The firm did not hold an earnings call this quarter because of transactions being contemplated from the Aug. 26 merger with DAC Acquisition. A special meeting will be held Nov. 18 for stockholders to vote on the proposed deal. The merger requires the approval of a majority of the company’s stockholders and is expected to be completed in the fourth quarter, subject to that approval.
Diversicare reported that occupancy for available nursing beds improved to 70.7%, compared with 70.2% for the third quarter of 2020. Earnings before interest, taxes, depreciation and amortization for the quarter were $0.3 million, which was a $6.4 million decrease over the third quarter of 2020. Earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs for the quarter were $13.6 million.
Reduced occupancy and increased expenses continued to challenge the company through the third quarter. The company incurred $7.2 million of additional healthcare related expenses, inclusive of labor costs and the increased cost of personal protective equipment, testing and infection control supplies.
Lease expenses decreased to $13.3 million in 2021 from $13.5 million in 2020, representing a decrease of $0.2 million (1.9%). The decrease resulted from the company’s transfer of operations of a Florida facility to another operator and the related amendment of a master lease agreement to remove the facility and reduce the annual rent expense.
According to the press release, as Diversicare looks forward to closing the merger with DAC in the fourth quarter, “the company is unable to fully predict the impact that the timing, completion or termination of the merger will have on its liquidity, financial condition and results of operations due to numerous uncertainties.”
