Caremark International recorded a $52 million charge in its fourth-quarter earnings that related to the depressed value of securities it has held since it sold its home infusion branch to Coram Healthcare Corp.
Caremark has been in a legal battle with Coram over the April 1995 sale of the infusion unit. Most recently, on Jan. 17, it sued for $150 million in damages, charging that Coram devalued the worth of Caremark's securities by failing to consolidate its own operations. A similar case against Coram was dismissed Jan. 3.
The face value of those securities is $112 million, but the "street value" has dropped to 25 cents on the dollar, according to Sally Benjamin Young, Caremark spokeswoman.
Caremark recorded the charge on its balance sheet Sept. 30, 1995. Accounting standards required Caremark to report the charge in its fourth-quarter earnings, Young said.
For the fourth quarter ended Dec. 31, 1995, Caremark reported a net loss of $20.9 million, or 28 cents per share, compared with net income of $27.1 million, or 36 cents per share, in the year-ago quarter. For the fiscal year ended Dec. 31, 1995, the company reported a net loss of $116.3 million, or $1.55 per share, compared with net income of $80.4 million, or $1.08 per share, in fiscal 1994.
Net revenues grew 33% to $647.8 million for the quarter. For fiscal year 1995, net revenues grew 34% to $2.4 billion.
