Advertisement

Beverly Enterprises Expects Loss After $50-Million Charge

June 26, 1987|MARTHA GROVES | Times Staff Writer

Beverly Enterprises, the nation's largest nursing home operator, said Thursday that it will show a loss for the second quarter as a result of a $50-million charge due partly to a major restructuring under way at the Pasadena company.

The operator of hundreds of nursing homes, retirement centers and other health-care facilities said the $50-million charge would cover additional reserves, in part to cover bad debts on patients' accounts and a writedown of assets in connection with the sale of some durable medical equipment assets.

Beverly Chairman Robert Van Tuyle said the sale--announced Thursday--to Primedica Inc., a unit of Medserv Corp., was for $15 million less than the operation's book value and therefore resulted in a "writedown of assets" of that amount for the second quarter ended June 30.

The deal is expected to close within 60 days, assuming that various conditions are met and that the sale wins required government approvals.

In addition, the company said it plans to set up a $15-million reserve for patient receivables and additional reserves of $20 million to cover workers' compensation claims.

Van Tuyle said the additional reserves were prompted after "an extensive review by an outside agency" indicated that the company had set aside inadequate amounts to cover workers' on-the-job injuries and bad patient debts.

Van Tuyle declined to estimate the second-quarter loss, which will be reported about July 20, but said: "Under routine operations, we would report something between $15 million and $30 million in profits (for the period). Obviously, a $50-million charge is going to throw you into the red."

Although the charge will reduce full-year results, he said the company nevertheless expects to show a profit for 1987.

The company also said it has agreements to sell about 60 long-term care facilities, with 6,400 beds in deals expected to close throughout the year. An additional 25 such facilities are also slated for sale.

The company also has signed agreements for the sale of four of seven retirement centers it hopes to sell. The company has decided to retain an eighth center that originally was to be sold.

Advertisement
Los Angeles Times Articles
|
|
|