Community Psychiatric Centers' diminishing mental health business hurt its earnings again in the first quarter ended Feb. 29.
The Las Vegas-based company took a restructuring charge of $843,000, or 1 cent per share, and reported a net operating loss of $1.3 million, or 3 cents per share, relating to the closure of seven psychiatric hospitals.
In the fourth quarter of 1995, CPC reported a net loss of $32.4 million. Of that loss, $4.3 million was attributed to its domestic psychiatric operations.
Falling demand for inpatient services could lead to more closures by the nation's second-largest psychiatric provider. For example, two additional hospitals closed in March, and company spokeswoman Suzanne Hovdey said others may follow. "We continue to monitor" performance of the U.S. psychiatric hospitals, she said.
The March closures were 86-bed CPC Capital Hospital in Austin, Texas, and 88-bed CPC Brentwood Hospital in Shreveport, La.
CPC now has 26 psychiatric hospitals in operation in the United States, although it plans to spin them off into a separate public company (Jan. 1, p. 27). However, timing of that spin-off now has been delayed as the company weighs possible bids for its psychiatric hospitals in the United Kingdom, Hovdey said.
Meanwhile, those hospitals, which have been much stronger than CPC's U.S. facilities, reported a decline in admissions and patient days during the first quarter. Richard Conte, CPC chairman and chief executive officer, said the downturn was temporary, adding that the division's managers were "diverted from operations by the discussions ongoing in the U.K."
For the quarter, the company reported a 37% drop in net income to $3.7 million, or 9 cents per share, compared with $5.9 million, or 14 cents per share, in the year-ago quarter. Revenues grew 3% to $123.9 million.
The company's strongest division continues to be its long-term-care subsidiary, Transitional Hospitals Corp. Its 14 hospitals reported a 66.7% increase in net income to 5 cents per share from 3 cents per share in the year-ago period.