Question-and-Answer Session
Operator
(Operator Instructions) We will go first to Ryan Daniels, William Blair.
Ryan Daniels – William Blair
Yeah, good morning guys. Couple quick housekeeping questions, first on the financials. I noticed the supply costs were down actually pretty nicely year-over-year even on the good revenue growth. Is there anything there unusual during the quarter? Is that something we should anticipate kind of being under check for the remainder of the year?
Joey Jacobs
I think Ryan, that was a good quarter for us. We did get a rebate check from our purchasing group that was a little bit larger than I thought we expect than we were expecting. We have been working for over a year on drug cost and dieting cost. So January was a good month for us for supply cost and I would read a lot into just one month and more use historical percentages there, but I would like to see it slightly tick down as we go
Ryan Daniels – William Blair
Okay, and that’s helpful. And then I think Jack mentioned the 40 basis points of margin pressure from the relocation at Rolling Hills, is that something that is going to continue a little bit in to the second quarter? Or is that pretty much done and we’re through that pressure?
Joey Jacobs
The Rolling Hills/Natural rehab projects, we bought that hospital inline in the middle of January. That project during the first quarter lost $1.6 million.
Ryan Daniels – William Blair
Okay
Joey Jacobs
We expect that to break-even during the second quarter. It still will put some margin pressure, it’s still going to be below the company’s margin.
Ryan Daniels – William Blair
Fine
Joey Jacobs
But, the first goal is to get it to break-even and we think that's going to happen. Right now the Rolling Hills hospital is at 50% occupancy and we have been opened about 90 days. So the 80 beds we’ve got – already got 40 of those beds full. So, we’re pleased with that where is that. So, but it did put pressure on our margins.
Ryan Daniels – William Blair
Great, and then the cash part of your last financial question looks very strong in the first quarter. I know that’s typically weaker quarter. It looks like good working capital management, but anything else there that you was unique to drive that so far about net income during the period?
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