Beverly Enterpises Inc.

Beverly Enterprises Inc. announced that it earned nine cents per share diluted in the first quarter of 1999 from operations, before costs associated with Year 2000 remediation and with an on-going government investigation of cost-allocation practices within the Medicare program. After pretax remediation costs of nearly $3 million and investigation costs of $1.9 million, Beverly’s first-quarter net income per share diluted was six cents in 1999, compared to 13 cents in the prior year’s first quarter. First-quarter 1999 revenues totaled $635 million, compared to $697.4 million in 1998.

The declines in revenues and net income are primarily the result of the federal government’s Medicare Prospective Payment System, which became effective for Beverly’s skilled nursing operations Jan. 1.