Home Health Business Quarterly: First quarter results
Home Health Business Quarterly
First quarter results
Extendicare reports a loss
Extendicare Inc. of Marham, Ontario, reported a first quarter loss of $5.3 million (8 cents per share), compared with a loss of $11.9 million (16 cents per share) last year. Operating cash flow, before working capital changes, was $23.2 million (32 cents per share), compared with $9.7 million (13 cents per share). Earnings before interest, taxes, depreciation, and amortization (EBITDA) was $33.3 million (8.2% of revenue), compared with $25.4 million (5.8% of revenue), an improvement of $7.9 million. Lower U.S. resident care liability costs improved quarter-over-quarter EBITDA by $17.9 million, as a result of the disposal of Extendicare’s Florida operations. Following a $20 million jury verdict against the company, it sold or leased all its Florida facilities with combined revenues of $125 million and combined losses of $44 million.
Revenue from same-facility operations improved by $31.6 million, while disposals reduced revenue by $60.8 million. Improvements in same-facility revenue resulted from several factors, including increased revenue from higher volume and rates for Canadian home health care operations, higher U.S. nursing center rates, and new management contracts. The impact of the U.S. foreign exchange rate on translation of U.S. operations added $14.4 million to revenue. In March, the company received a cash dividend of $22.6 million from Crown Life Insurance Co. The money is being used to buy back shares and reduce debt. In May, the company’s U.S. operations received a tax refund of $22.5 million, which has been applied to its revolving credit facility.
Lincare Holdings posts gain
For the first quarter of 2001, Lincare Holdings Inc. (NCR) of Clearwater, FL, posted revenues of $191.7 million, a 20% increase over revenues of $159.5 million for the same period last year. Net income was $31.5 million, compared with $27 million. Diluted earnings per share were 60 cents, an increase of 21% over 50 cents diluted earnings per share previously. Net cash from operating activities was $62 million, and cash earning per share was 66 cents.
For the quarter, the company recorded an unrealized loss of $2.2 million (2 cents per share) as required by SFAS No. 133, which governs the change in market value of derivative financial instruments. During the quarter, Lincare completed the acquisition of two companies with aggregate annual revenues of about $10 million and added 13 new operating centers through internal expansion, bringing the total number of locations to 523. The company provides oxygen and other respiratory therapy services to patients in the home and has over 285,000 customers in 44 states.
Manor Care reports gain
Manor Care Inc. (HCR) of Toledo, OH, announced diluted first-quarter earnings of 24 cents per share, a 20% increase from first-quarter results in 2000. Net revenues were $638 million, compared with $570 million, a 12% increase. Net income was $25 million, compared with a loss of $800,000.
"Over the past year, we added 12 new facilities and completed several expansions that have improved our position in growing markets. Our home health care business contributed to the strong revenue growth compared with a year ago, including significant gains in our hospice care business. We expect continued strength in this business as we complete the successful integration of In Home Health Inc., acquired in December 2000," said Paul A. Ormond, president and CEO. Manor Care Inc. owns and operates long-term care centers in the United States primarily under the Heartland, ManorCare, and Arden Courts names.
Pediatric Services sees drop
Pediatric Services of America Inc. of Norcross, GA, posted a 5% decline in net revenue from $48.1 million in fiscal year 2000 to $45.6 million. The decline was expected as a result of eliminating noncore services. Net income was $186,000, compared with $1.98 million previously. Net income for the quarter included a gain on the disposal of discontinued operations of $24.3 million. Diluted net income per share was 3 cents, compared with $3 previously. Pediatric Services provides comprehensive pediatric home health care services in 22 states.
Vencor now Kindred Healthcare
In April, Vencor Inc. of Louisville, KY, emerged from Chapter 11 and changed its name to Kindred Healthcare Inc. The company entered a $120 million senior exit facility with a lending group led by Morgan Guaranty Trust Co. that will provide working capital for general corporate purposes. It has filed a Form 8-A with the Securities and Exchange Commission to register its common stock and will maintain its status as a public company.
The company announced revenues for the first quarter of $752 million, compared with $715 million for the first quarter of 2000. It reported a loss from operations of $9 million or 13 cents per share, compared with a loss of $16 million or 23 cents per share previously. The reported losses included expenses connected with the company’s restructuring activities. The results for the quarter do not include any adjustments that will result from the company’s emergence from bankruptcy. Kindred Healthcare is a long-term health care services provider operating nursing centers and hospitals.
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