Charter Medical Corp. last week continued its acquisition bent and reported profits for the second quarter ended March 31.
The Macon, Ga.-based chain of 75 psychiatric hospitals said it established Group Practice Affiliates, a subsidiary to acquire and manage group practices of psychiatrists, psychologists and other mental health professionals. The unit has bought a 50% interest in an Austin, Texas, practice and is in "significant negotiations" with others, executives said.
Other psychiatric hospital chains, such as New Orleans-based Ramsay Health Care, also are targeting group practices for acquisition.
In addition, Charter last week agreed to buy Schizophrenia Treatment and Rehabilitation, a privately held partial hospitalization company based in Decatur, Ga. Terms weren't disclosed.
Charter said it plans to expand the program from Decatur, an Atlanta suburb, to 10 cities. The cost of treating patients suffering from schizophrenia is estimated to be $18 billion annually, the American Psychiatric Association said.
Charter also is in the midst of buying 47 psychiatric hospitals from National Medical Enterprises. NME, which is divesting the financially and legally troubled operations, will receive cash proceeds of $186 million from Charter.
For the second quarter, Charter reported net income of $1.1 million, or 4 cents per share, compared with a net loss of $19.7 million, or 79 cents per share, in the year-ago period. Revenues dropped 9% to $212.6 million.
For the six months, the company reported a net loss of $2.7 million, or 11 cents per share, compared with a net loss of $26.9 million, or $1.08 per share, in the year-ago period. Revenues decreased 8% to $421.4 million.
Charter is the nation's largest chain of psychiatric hospitals with 75 facilities. NME, which will continue to operate 17 hospitals, is the second-largest chain.
The NME deal is expected to be completed in phases with most of the facilities transferring to Charter by the end of May.