Companies in the News
Companies in the News
Apria amends bank credit facility
Apria Healthcare Group (Costa Mesa, CA), effective Oct. 22, amended its bank credit agreement to permit additional acquisitions with an aggregate purchase price of up to $125 million. The amendment also provides the company with the ability, subject to compliance with Apria’s other debt instruments, to repurchase up to $50 million of its common stock over two years. Apria CEO Philip Carter said that increasing the rate of acquisitions as 2000 approaches is an important part of Apria’s growth plan.
Building Blocks signs agreement with Aetna
Building Blocks Pediatric Home Health Services (Newport Beach, CA) and Aetna U. S. Healthcare (Blue Bell, PA) have signed a statewide provider agreement for California. Building Blocks will provide Aetna U.S. Healthcare’s members throughout California with home health services for children. Through the agreement, Building Blocks will provide skilled nursing services, as well as in-home physical, occupational, and speech therapy, medical social services, infusion therapy, and some medical equipment.
Chemed’s Patient Care sees increased 3Q99 revs
Chemed (Cincinnati) recorded 3Q99 ended Sept. 30 net sales of $112.8 million, up 17% from 3Q98 sales of $96.5 million. The company posted a net income in 3Q99 of $4.4 million, 42 cents per share, compared to a 3Q98 net income of $4.7 million, 47 cents per share.
Chemed said its Patient Care subsidiary saw earnings of $941,000 in 3Q99, a 1.1% increase from 3Q98 earnings. Patient Care’s revenues increased 9.1% from 3Q98 to $32 million in 3Q99.
Patient Care’s favorable 3Q99 performance, according to Chemed Chairman/CEO Edward Hutton, reflects its focus on increasing its private-pay revenue opportunities, assisted living relationships, and participation in privately funded insurance programs, all to offset a reduction in Medicare reimbursements to all home healthcare providers. Hutton added that Chemed management believes there is great opportunity for Patient Care.
GF board member resigns
Graham-Field Health Products’ (GF; Bayshore, NY) Kenneth Jennings has resigned from the board, following his decision to leave Jay Alix & Associates to pursue new employment opportunities.
IHHI buys six HHAs
In Home Health (Minnetonka, MN) acquired the assets of six home health agencies in Wisconsin and Colorado. The agencies, IHHI said, generate about $10 million in revenues, and management estimates that the transaction will be accretive to earnings. The effective date of the transaction was Oct. 16. Financial terms of the deal were not disclosed.
IHS suspends efforts to sell RoTech
Integrated Health Services (IHS; Sparks, MD) said last week it has suspended its efforts to sell its RoTech division, but that it is exploring strategic alternatives for the company that might include selling other assets. IHS said it has not received an acceptable offer for the division.
IHS also said it expects to report a loss in 3Q99 ended Sept. 30, which will exceed the loss in 2Q99. IHS has retained Warburg Dillon Read as its advisors and KPMG as its consultants to analyze strategic alternatives, including restructuring the company’s debt, selling assets other than RoTech, and raising additional capital, among other things. IHS said the prospective payment system is to blame for its financial hardships, as it has had a negative impact on the company’s revenues, cash flow, and liquidity. IHS said it expects to report its 3Q99 financial results in November.
Invacare sees increased earnings in 3Q99
Invacare (Elyria, OH) saw 3Q99 ended Sept. 30 net sales of $223.3 million, up 10% from 3Q98 sales of $203.4 million. The company posted a net income of $14.1 million, 46 cents per share, up 8% from a 3Q98 net income of $13 million, 43 cents per share.
Lincare sees growth in FY99
Lincare Holdings (Clearwater, FL) reported net revenues in 3Q99 of $150.2 million, compared to 3Q98 revenues of $125.7 million, an increase of 20%. The company posted a net income of $26 million, 45 cents per share, up from a 3Q98 net income of $22.7 million, 38 cents per share.
During 3Q99, Lincare completed the acquisition of five companies with aggregate annual net revenues of $5 million. The acquired businesses were located in Kentucky, New Jersey, North Carolina, Texas, and Virginia. Through acquisitions and internal growth, Lincare added four new operating centers in 3Q99, bringing the total number of locations to 416.
Matria sees positive earnings in 3Q99
Matria Healthcare (Marietta, GA) recorded 3Q99 ended Sept. 30 revenues of $63.9 million, compared to revenues in 3Q98 of $34.1 million. The company posted a net income in 3Q99 of $7.7 million, 17 cents per share, compared to a 3Q98 net loss of $84.2 million, $2.31 per share. The 3Q99 net income, said Matria, includes a charge of 5 cents per share for consolidating its Women’s Health monitoring operations, and a credit of 10 cents per share relating to a tax benefit.
National Home Health sees increased FY99 revs
National Home Health Care Corp. (Scarsdale, NY) recorded net revenues in FY99 of $38.5 million, up 12.2% from FY98 revenues of $34.3 million. The company posted a net income of $1.1 million, 22 cents per share, in FY99, compared to a FY98 net income of 1.2 million, 23 cents per share. National Home Health said the FY99 results include the net loss from its interest in SunStar Healthcare of $674,000, 13 cents per share.
For 4Q99, the company saw revenues of $9.6 million, an increase of 19% from 4Q98 revenues of $8.1 million. National Home Health recorded a net income of $448,000, 9 cents per share, compared to a net income in 4Q98 of $390,000, 7 cents per share.
National Home Health said it has continued for an additional year its program to repurchase its common stock. Purchases in the aggregate amount of up to $1 million in purchase price during the one-year extension would be made from time to time in the open market and through privately negotiated transactions. The buyback program will be financed out of existing cash or cash equivalents.
NYC’s contract with New York’s HRA extended
New York Health Care (NYC; Brooklyn, NY) has been recommended for an award of an extension of up to six years of its agreement with New York City’s Human Resources Administration (HRA) to provide home care services to Medicaid patients in Brooklyn. Final negotiations of the extension are to be completed in the near future, the company said. The annualized gross revenues to NYC during each of the years of contract implementation would be $12 million, for a potential total $72 million over the life of the agreement.
President/CEO Jerry Braun said that without meaningful offsetting revenues until late in 2Q99, NYC incurred operating losses for 1Q99 and 2Q99. For the past several months, he said, the HRA case load has been increasing, and it is now at near optimum levels. He said the award should become an important and reliable contributor the overall growth of NYC and that the company anticipates a significant return on its investment.
In other news, NYC has completed the acquisition of the assets of a Manhattan home healthcare office formerly owned by Staff Builders (New Success, NY). While the purchase price and other terms were not released, the office generated annual revenues of $600,000 for Staff Builders. Braun said that while the company has been providing home care services in Manhattan in the past, it has been on a modest scale.
"By acquiring this Manhattan location and a larger population of Manhattan-accessible personnel, we expect to service the combined base of customers more efficiently and at the same time build a much stronger foothold of new business and referrals in the large Manhattan home care market," he said.
Option Care expects to exceed 3Q99 estimates
Option Care (Bannockburn, IL) said last week it expects to exceed, by at least 25%, the consensus earnings per share estimate of 8 cents per share for 3Q99 ended Sept. 30. This will be its third consecutive profitable quarter, Option Care said. The company said it will release final financial results for 3Q99 Nov. 9.
Priority honored by Forbes
Priority Healthcare (Altamonte Springs, FL) has been named as one of America’s 200 Best Small Companies in the Nov. 1 issue of Forbes magazine. Companies on the list were measured on a rigorous financial review that assessed growth and profitability over the past five years and the latest 12 months, the company said.
Star enters agreement with New York HRA
Star Multi Care Services (Huntington Station, NY) has been notified by the NYC Human Resources Administration (HRA) that it has been awarded a contract for provision of Home Attendant services in the borough of Brooklyn, with an approximate annual contract value of $10 million. It is anticipated that this contract represents for the company a 25% increase in annual revenues, which should begin to be reflected in 4Q00. The Brooklyn office of the company, which was awarded the contract, will now become the largest of the company’s 12 offices. These contracts are typically awarded for a period of two years with the potential of both extensions and expansion opportunities.
Additionally, Star Multi Care anticipates another complimentary business and revenue to ensue from the contract award. It is anticipated that this contract will provide significant increases in future net income and profitability for the company.
Star Multi Care will contract with HRA to provide home attendant services to Medicaid eligible Brooklyn residents. After HRA has determined client eligibility and service needs, Star will provide these services through home attendant aides. Final contract award is contingent upon submission of certain additional requested information and state approval. Initiation of contract services is tentatively targeted by the HRA for early spring 2000.
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