Jay McKnight headshot
Jay McKnight

Provider Relief Funds and state grant funds that Diversicare Healthcare Services received during the second quarter of 2021 were used to offset increased healthcare-related expenses and lost revenues attributable to COVID-19, CEO and President Jay McKnight said on Tuesday’s earnings call.

“All of our lost revenue and COVID-related expenses from the beginning of the pandemic to date have been offset by stimulus dollars under the most recent guidance from HHS. We have ten-and-a-half million in deferred stimulus to be utilized for the remainder of 2021 and into the first half of 2022,” McKnight said.

“Without additional stimulus grants, the second half of our year could be financially challenging. We are working with our national and state organizations to highlight the need for additional stimulus dollars and qualifications for the use of existing grants,” he said.

Operating expenses increased as a percentage of revenue to $91.6 million, or 82.3% of revenue, in the second quarter of 2021 from $95.8 million, or 81% of revenue, in the second quarter of 2020.  

Of the $51.6 million of Provider Relief Funds that Diversified has received to date, the company recognized $8.5 million of the funds during the second quarter of 2021, which combined with $0.1 million of state coronavirus relief grant funds, were classified as other operating income in the company’s results of operations. The Provider Relief Funds and state grant funds that we recognized during the quarter were used to offset increased healthcare-related expenses and lost revenues attributable to COVID-19. 

Lease expenses decreased to $13.3 million in 2021 from $13.5 million in 2020. The decrease resulted from Diversicare Healthcare’s transfer of operations for a Florida facility to another operator and the related amendment of a master lease agreement to remove this center and reduce the annual rent expense. 
“Our quarter’s financial results follow our trend of positive net income and overall improved financial results. Our expense control efforts are working and our efficiency gains have been key in our survival of the pandemic,” McKnight stated in a press release Monday in conjunction with the earnings call