Companies in the News

AHOM reports 1Q99 earnings a month late

American HomePatient (Brentwood, TN), in a quarterly filing that was delayed a month, reported a net loss in 1Q99 ended March 31 of $5.6 million, 37 cents per share, compared to a net income in 1Q98 of $3 million, 20 cents per share. The company’s revenues reached $91.2 million, a drop from 1Q98 revenues of $102.8 million. The company also postponed its annual meeting from April 29 to May 27, giving its shareholders another month to decide whether to approve a 1-for-4 reverse stock split, which is intended to keep the company’s stock price high enough so that it can keep its listing on Nasdaq.

Continucare late on interest payment

Continucare Corp. (Miami) said last week it will not make its 1999 semi-annual payment of interest on its 8% convertible subordinated debentures due 2002. If the company does not make the payment for 30 days after the due date, the failure would constitute an event of default under the indenture dated as of Oct. 30, 1997, between Continucare and American Stock Transfer & Trust Company, as trustee.

Coram sees increased revs in 1Q99

Coram (Denver) recorded net revenues in 1Q99 ended March 31 of $161 million, up from 1Q98 revenues of $107.7 million. The company saw a 1Q99 net loss of $400,000, 1 cent per share, compared to a net loss in 1Q98 of $15.1 million, 31 cents per share.

Subsequent to the end of 1Q99, the company and its debtholders agreed to increase the annual interest rate applicable to its series A notes from 9.9% to 11.5% until maturity. As of the end of 1Q99, the principal amount outstanding under the series A notes totaled $153.8 million. The change, the company said, removes the uncertainty of the amount of potential dilution from the series B notes.

HCR to buy $200M in stock

HCR Manor Care’s (Toledo, OH) board has authorized the company to buy up to $200 million of common stock on the open market or in private transactions. HCR president/CEO Paul Ormond said the indicated share purchases may be used for internal stock option and 401K match programs and other uses, such as future acquisitions.

Healthsouth to acquire Mariner’s outpatient assets

Healthsouth Corp. (Birmingham, AL) has entered into a definitive agreement to acquire all of Mariner Post-Acute Network’s (Atlanta) outpatient assets of its American Rehability Services division. Terms of the cash transaction were not disclosed. Rehability’s hospital rehabilitation management contracts will be sold to National Rehab Partners (Brentwood, TN). The transaction is subject to regulatory approvals, as well as certain third-party consents, and is expected to close in 2Q99.

IHHI’s 2Q99 revenues drop

In Home Health’s (IHHI; Minnetonka, MN) 2Q99 ended March 31 net income available to common shareholders increased to $732,000, 13 cents per share, compared to a net income available to common shareholders in 2Q98 of $120,000, 2 cents per share. Net income available to common shareholders, IHHI said, includes the deduction of a preferred stock dividend payable to HCR Manor Care (Toledo, OH). IHHI’s revenues for 1Q99 totaled $21.1 million, down from $26.4 million in 1Q98.

IHHI said the revenue decrease in 1Q99 and 2Q99 was due to a reduction in revenue derived from the cost-based Medicare program, which was partially offset by a $2.2 million increase in revenue relating to final reimbursement settlements with IHHI’s fiscal intermediary.

IHHI Chairman/CEO Wolfgang von Maack said IHHI has significantly reduced its reliance on the cost-based Medicare program. Cost-based Medicare revenue accounted for less than 50% of IHHI’s total revenues in the first six months of FY99, he said. In the same period in FY98, it represented 59% of total revenues.

IHS reports 1Q99 loss

Integrated Health Services (Owings Mills, MD) reported last week a loss in 1Q99 of $6.6 million, compared to a net income in 1Q98 of $37.6 million. Revenues dropped 18.6% to $620.4 million from $762 million in 1Q98.

Invacare Chairman Mixon receives award

The Cleveland World Trade Association named Invacare Corp. (Elyria, OH) Chairman/CEO A. Malachi Mixon III the 1999 International Executive of the Year at its 54th annual conference. Mixon is the only recipient who has received the award twice. He last received it in 1992. Criteria for selection of the honor include time spent in international business, as well as integrity, achievements, financial results, volunteerism, and ethics.

Nursefinders moves corporate office

Nursefinders has relocated its headquarters to a larger facility in Arlington, TX. All 105 corporate employees moved from the building where they had worked since 1987. The new facility at The Offices of Brookhollow will accommodate the growing company, which recently completed its third acquisition in five months.

Olsten takes $102M charge

Olsten Corp. (Melville, NY) took a charge of $102 million ($70 million, net of income tax benefit), 86 cents per share, in 1Q99 to cover a $61 million settlement and restructuring costs. In March, the company tentatively agreed on a settlement of a federal fraud investigation into its Medicare practices linked with Columbia/HCA Healthcare Corp. (Nashville, TN). Under the agreement, the company would pay the $61 million, including about $10 million in fines and penalties, and plead guilty to violations of certain federal criminal statutes. Terms of the agreement have not yet been fully disclosed.

As a result of the charge, the company posted a net loss for 1Q99 ended April 4 of $62.3 million, 77 cents per share, compared to a net income in 1Q98 of $12.8 million, 16 cents per share. Revenues were $1.2 billion, a 14% increase over 1Q98 revenues of $1.05 billion.

In a conference call with analysts, Olsten CEO Edward Blechschmidt said the company had "substantially" resolved government inquiries and is anticipating a "positive future," reported the Wall Street Journal. An Olsten spokesman told Newsday that he did not know whether anticipated office closings would lead to job cuts. Newsday reported that the company intends to close 45 healthcare and staffing offices in the United States and Canada. Analyst Matthew Roswell of Legg Mason Wood Walker told the Journal that changes in Medicare reimbursement and the fraud investigation had affected Olsten, but that the company seemed to be turning around.

Option Care reports 1Q99 profit

Option Care (Bannockburn, IL) has returned to profitability in 1Q99 ended March 31. The company reported revenues of $28.9 million, a 9% increase over $26.6 million in 1Q98. Net income was $763,000, 7 cents per share, compared to $865,000, 8 cents per share, in 1Q98. The company’s debt had been reduced by almost 50% to $14.3 million from $26.8 million in 1Q98, company officials said.

Sunrise shuffles management

Sunrise Medical (Carlsbad, CA) has realigned a number of management positions in an effort to streamline the U.S. home healthcare group and reduce its expense base. Dan Easley, former president of the respiratory products division, has been named president of the mobility products division. Rich Kocinski, formerly vice president of product management for the respiratory products division, has been appointed president of that division, replacing Easley. The company has also appointed three new vice presidents, including Eric Vielbig as vice president of process improvement, Jay Summer as vice president of national accounts, and Robb Herring as vice president of distributor sales, replacing Summer, who held the position previously.

U.S. HomeCare seeks reverse stock split

U.S. HomeCare Corp. (Hartford, CT) intends to seek shareholders’ approval to effect a 1-for-1,500 reverse stock split of the company’s common stock, reducing the number of shareholders of record to below 300. The purpose of the split is to eliminate the costs associated with being a public company. Management expects to save about $250,000 per year and perhaps even more through indirect cost savings. If approved by the shareholders, any shareholders of record as of May 19, 1999, who would receive a fractional share in the reverse stock split will be paid for it in cash at a value of .014 cents per share.