Epic Healthcare Group reported a higher net loss for fiscal 1993 after refinancing charges and lower bonuses for its top executives.
The company reported a 30% increase in its net loss to $25.1 million for the year ended Sept. 30, compared with $19.3 million in fiscal 1992. Revenues grew 8% to $1 billion.
Profits for the Dallas-based hospital company were hurt by a $21.4 million extraordinary charge for a bond refinancing earlier in the year. Before that charge, the chain of 34 hospitals in 10 states would have reported a net loss of $3.8 million.
Despite the loss, Epic executives said the company's operating margin was increasing. Earnings before depreciation, amortization, interest, taxes and other non-cash expenses were up 12% to $145.1 million.
The company's report included limited results from two deals that Epic completed in August, just before the end of its fiscal year. The company's largest single operation is now 430-bed Mainland Regional Healthcare System in Texas City, Texas, which resulted from the August merger of Epic's 120-bed Danforth Hospital in Texas City with a former county hospital, 300-bed Mainland Hospital in Galveston, Texas. The lease and purchase of certain assets by Epic amounted to $46 million.
Also in August, Epic bought HealthTrust's 40% interest in 270-bed North Texas Medical Center, McKinney, Texas, for $15.7 million.
However, Epic's results weren't enough to garner a major compensation boost for the company's executives. "We probably could have done a little better performance-wise," said Thomas Schleck, Epic's chief financial officer and a director, when asked to explain the smaller bonuses to three of Epic's top five officers.
For example, Kenn George, the company's chairman, president and chief executive officer, received a bonus of $348,975, compared with the 1992 bonus of $351,000. However, Mr. George's salary increased by $50,000, in accordance with his employment contract, to $500,000.
But the biggest hit to his compensation came in stock appreciation rights, granted to Epic's executives as long-term compensation. In 1992, Mr. George received 578,565 SARs, worth more than $4 million. In 1993, he received none.
Mr. George didn't receive any SARs because all of the SARs available for executive compensation have been distributed, Mr. Schleck said.
The majority of Epic is owned by an employee stock ownership plan.-Sandy Lutz