American Medical International last week told Wall Street analysts that it is continuing to pursue acquisitions of not-for-profit hospitals and that it may purchase other providers in the Memphis, Tenn., market.
The Dallas-based company has agreed to buy one of that city's largest hospitals, 587-bed St. Francis Hospital (Jan. 24, p. 14). Terms have not been disclosed.
In a conference call with healthcare industry analysts last week, Robert O'Leary, AMI's chairman and chief executive officer, said the company had additional deals in the works in Memphis that would be announced soon. He said the St. Francis acquisition would be completed by the end of May, when AMI's third quarter ends.
"We definitely are not going to limit our presence in Memphis to just St. Francis Hospital. We want to partner with other providers in the community," added AMI spokeswoman Margo Barnes.
The 36-hospital chain last week reported a jump in profits for the second quarter ended Feb. 28. AMI reported a 33% increase in net income to $24.3 million, or 32 cents per share, from net income of $18.3 million, or 24 cents per share, in the year-ago period. Revenues grew 3% to $583.3 million.
For the six months, AMI reported a 41% increase in net income to $40.8 million, or 53 cents per share, from net income of $28.8 million, or 38 cents per share, in the previous year. Revenues rose 3% to $1.14 billion.
Included in the results was the $1.4 million cost of earthquake damage to three of its hospitals in Los Angeles. The damage amounted to about 1 cent per share in expenses.
In addition, AMI has hired Linda Dean to develop outpatient and specialty programs. She will head a new subsidiary. Ms. Dean formerly headed the long-term acute-care operations for Cornerstone Health Management, a contract management subsidiary of Dallas-based Epic Health Group (Aug. 23, p. 39). Epic is being acquired by HealthTrust-The Hospital Co., Nashville, Tenn., in a $1 billion deal.
At AMI, Ms. Dean will be in charge of developing outpatient, rehabilitation, psychiatric, long-term acute-care, home healthcare and subacute-care programs. Some 28% of AMI's revenues now come from outpatient services.