Genesis HealthCare endured $60 million in losses directly related to the coronavirus pandemic — despite receiving $64 million in federal and state relief funding during the third quarter, company executives revealed Monday.
The Pennsylvania-based company reported that it incurred a combined $123 million in costs related to the pandemic and the impact of lost occupancy even with the additional relief. Of that $64 million in relief, $30 million was from states it operates in and the other $34 million was from the federal government.
“The revenue loss and incremental increase in expenses from the pandemic have resulted in significant operating losses and cash flow deficits,” Genesis CEO George Hager Jr. said during the company’s third-quarter earnings call.
“These losses have been temporarily funded by short-term federal loan programs. Without legislative relief, we will begin paying federal loans in April of 2021. There is no question Genesis will need ongoing support from the federal government and our capital partners to sustain operations,” he added.
Overall, the company reported a net loss of $62.8 million for the third quarter — a drastic increase from the $46.1 million net loss it reported in the third quarter of 2019. Its revenue for the third quarter was $0.94 billion. It reported $1.12 billion in revenue during the same period in 2019.
Executives also noted that the company incurred $52 million in incremental operating expenses — such as increased wage, personal protective equipment, testing and infection control costs — as a direct result of the pandemic, which was a 64% improvement from second quarter 2020.
Hager said that the company has begun discussions with “select capital partners” to analyze a number of restructuring alternatives to improve Genesis’ financial outlook.
“We will continue to work diligently to protect our patients, residents and staff, improve the operating performance of the business and pursue opportunities to improve the financial position of the company,” Hager said.
Occupancy has begun to rebound for the nursing home chain. The company reported that for the third quarter operating occupancy was 75.4% — an 11% decrease from 2019. But since the occupancy low point of 74.2% in June, it’s steadily grown by 230 basis points to 76.5% in October.
Same store admissions were down 24% for the third quarter when compared to the same period in 2019. The company reported admissions were down 61% during the second quarter when compared to last year.
Executives also noted that the pandemic has had a larger impact on facilities in New Jersey, Connecticut, Massachusetts, Pennsylvania and Maryland, which represent 45% of its operating beds.
“In these five states, same-store occupancy is down nearly 19% from pre-pandemic levels, while our facilities located in 20 less impacted states have experienced only a 9% drop in occupancy,” Chief Financial Officer Tom DiVittorio said.