Commenting on the results, Kelly Gill, Advocat's CEO, stated, "The fourth quarter of 2012 represents the first operating quarter with an apples-to-apples comparison related to our Medicare rates following the implementation of the CMS Final Rule in October of 2011.
While our Adjusted EBITDA for the fourth quarter was negatively impacted by professional liability expense, revenue increased and our operating expenses declined as a percentage of revenue.
Additionally, these results represent our ability to adapt to reimbursement challenges by streamlining our corporate costs, as evidenced by an absolute reduction in general and administrative expenses.
I am very pleased with our operational improvements throughout 2012 and believe they position the Company well to generate additional growth in 2013.
"To that end, I am also pleased to have announced earlier this week our definitive agreement to acquire five facilities in Kansas," Mr. Gill
"This transaction will represent our largest since embarking on a portfolio-expansion strategy in 2011 and represents more than a 50% increase in our owned facilities.
I believe our ability not only to integrate newly-acquired facilities successfully, but also to do so with limited incremental corporate costs, has been proven through our acquisition activity in 2012.
We anticipate closing this transaction early in the second quarter of 2013 and that these new facilities will be accretive to our earnings this year.
It is also important to note that this transaction entails our taking full ownership of these facilities, demonstrating our flexibility as relates to acquisition structures as we continue to focus our efforts on growing our portfolio."
concluded, "As we look forward into 2013, we will continue to seek opportunities both to deepen and to expand our operating footprint through the addition of new facilities, while at the same time generating organic growth through improvements in clinical capabilities and reinvestment in our centers."
Kelly J. Gill
Chief Executive Officer