Advocat Inc. Files Extension for Reporting Fiscal 1998

Business Wire, March 31, 1999

FRANKLIN, Tenn.--(BUSINESS WIRE)--March 31, 1999--Advocat Inc. (NYSE:AVC) today announced it anticipates filing with the Securities and Exchange Commission, under Rule 12b-25, a notification of late filing for its Form 10-K for the year ended December 31, 1998.

The Company's notification will state that it was unable to file the Form 10-K for the year ended December 31, 1998, because the Company is awaiting (1) a commitment letter from a financial institution regarding the refinancing of a portion of a promissory note on a long-term basis, and (2) a waiver from its lenders regarding the violation of certain debt covenants. Because these documents have not been received, the Company is unable to finalize the classification of its debt and complete other portions of the Company's financial statements and Form 10-K. Based upon discussions with the respective financial institutions, management expects to receive these documents within a few days and will file the Form 10-K immediately thereafter.

Certain statements made in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward looking statements are based upon management's current expectations and include known and unknown risks, uncertainties and other factors, many of which the Company is unable to predict or control, that may cause the Company's actual results or performance to materially differ from any future results or performance expressed or implied by such forward looking statements. These statements involve risks, uncertainties and other factors detailed from time to time in the Company's filings with the Securities and Exchange Commission. Such factors may include the increased cost of borrowing under the Company's credit agreements, covenant waivers from the Company's lenders, possible amendments to the credit agreements, changes to the Company's business strategy and operations, the effect of healthcare legislation and regulation, and the impact of future licensing surveys. The Company cautions investors that any forward looking statements made by the Company are not necessarily indicative of future performance.

As of December 31, 1998, Advocat Inc. operated 115 facilities with 11, 937 beds of which 52 were assisted living with 4,755 beds and 63 were skilled nursing facilities containing 7,182 licensed beds. The Company has facilities in 11 southern states and two provinces in Canada.