Restructuring charges and an internal reorganization of its business were key factors behind Continental Medical Systems' disappointing fourth quarter and year-end earnings, the company said last week.
For the fourth quarter ended June 30, Continental recorded a net loss of $50 million, or $1.31 per share, compared with a net loss of $7.3 million, or 19 cents per share, during the year-ago period. Revenues rose 5% to $253 million.
For fiscal 1994, Continental recorded a net loss of $34 million, or 92 cents per share, compared with a net income of $19.5 million, or 51 cents per share, in 1993. Revenues rose 11% to $1 billion.
During the fourth quarter, the company recorded a special, pre-tax charge of $74.8 million for its restructuring program. The charge related to business transactions, including the write-down of certain assets in Continental's hospital division, costs associated with the consolidation of its contract therapy companies and losses related to the termination of relationships in the contract therapy business, the company said.
Mechanicsburg, Pa.-based Continental Medical Systems provides medical rehabilitation and physician services through 36 freestanding hospitals and 125 additional locations.