Advocat Inc. (AVCA) to Sell Nursing Center in Arkansas
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Advocat Inc. (Nasdaq: AVCA) entered into an agreement to sell an owned nursing center in Arkansas to an unrelated party. The operating margins of the nursing center do not meet the Company's long term strategic goals. This nursing center contributed revenues of $2,588,000 and pretax net loss of $(18,000) in the six-month period ended June 30, 2012.
CEO said, "Our focus on portfolio growth as part of our strategic operating initiatives has allowed us also to contemplate targeted divestitures of underperforming nursing centers, which can have a positive financial impact without compromising the scale of our growing Company. The Arkansas facility was operating at a modest loss, and its replacement in our portfolio with better performing nursing centers as described in our growth plan not only will provide an immediate financial benefit but also diversify our operations modestly from the state of Arkansas, which has been a challenging market for us in terms of professional liability."
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CEO said, "Our focus on portfolio growth as part of our strategic operating initiatives has allowed us also to contemplate targeted divestitures of underperforming nursing centers, which can have a positive financial impact without compromising the scale of our growing Company. The Arkansas facility was operating at a modest loss, and its replacement in our portfolio with better performing nursing centers as described in our growth plan not only will provide an immediate financial benefit but also diversify our operations modestly from the state of Arkansas, which has been a challenging market for us in terms of professional liability."
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