Apria showing signs of a stronger financial standing
Apria showing signs of a stronger financial standing
By MEREDITH BONNER
HHBR Editor
Showing signs of improved financial standing, Apria Healthcare Group (Costa Mesa, CA), a company that reported its first profit in more than a year only a few weeks ago, said last week it will withdraw its request for a $50 million rights offering and instead will use available cash to pay down debt.
The additional cash will be available for Apria through an amended credit facility, which its bank group approved last week. The new facility prevents Apria from having to raise the $50 million and allows it to use available cash to make a $50 million prepayment to reduce bank debt.
In addition, Apria officials said, the amendment still allows the company to complete $62 million of acquisitions in 1999.
Apria has now requested that the Securities and Exchange Commission (SEC; Washington) withdraw its registration statement for the rights offering, and it will not proceed with any additional financing at this time.
Amidst the positive outlook for Apria’s financials, Relational Investors, the investor group led by Apria Chairman Ralph Whitworth and Apria’s largest shareholder, is boosting its stake in the company to 11 million shares, or 21.2% of outstanding shares. Relational Investors bought 501,400 shares on April 5 and 6 at $11.85-$11.99 per share, increasing their holdings to 7.8 million shares, or 14.9%. And the group is now increasing its hold on Apria to 14.9% by purchasing 3.2 million shares from another investment group, which includes Richard Blum & Associates.
The Blum group has reduced its stake in Apria to 6.2%. In a filing last week with the SEC, the group said it sold 2.2 million common shares of Apria between April 1 and April 16 at prices ranging from $11.97 to $13.54 per share.
Apria recorded its first profit in more than a year earlier this month when it reported its earnings for 4Q98 ended Dec. 31. The company earned $2.3 million, 4 cents per share, in 4Q98. But Apria reported a loss for FY98 of $207.9 million, $4.02 per share, and said later in April that it expects to see a drop of $11 million in revenues and operating income in FY99 because of the 5% Medicare reimbursement cut for home oxygen therapy.
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