Several long-term-care and home-care companies reported growth in earnings and net revenues for the first quarter ended March 31.
The results indicate a "pretty good sign for the industry," said Ann Logue, an analyst with Volpe, Welty & Co. in San Francisco. The growth in revenues demonstrates "pure industry demand" for these services, despite concerns about Medicare reimbursement restrictions, she said.
Apria Healthcare Group, the nation's largest home infusion company, posted a 28% increase in net income to $20.3 million, or 39 cents per share, from $15.8 million, or 32 cents per share, in the year-ago quarter.
Costa Mesa, Calif.-based Apria said revenues grew 4% to $295.3 million. The company provides home-care services through 350 locations in 49 states.
Option Care, based in Bannockburn, Ill., posted a 37% increase in net income to $763,000, or 8 cents per share, from $555,000, or 6 cents per share, in the previous year. Revenues increased 7% to $3.1 million. The company also announced it purchased the respiratory therapy and durable medical equipment businesses of Nestrick Pharmacy, Bullhead City, Ariz., which generated $800,000 in revenues in 1995.
Option Care provides a range of home-care services through 189 owned or franchised locations nationwide. The company said it sold six new franchise locations during the first quarter.
Matria Healthcare, which was formed March 8 when Tokos Medical Corp. merged with Healthdyne Maternity Management, reported a net loss of $21.1 million, or 96 cents per share, compared with a net loss of $2.4 million, or 14 cents per share, in the year-ago quarter. The company said it recorded one-time charges of $17.7 million relating to the merger. Revenues increased 4% to $24.8 million.
Matria, based in Marietta, Ga., is a leading provider of obstetric home-care services and maternity management to managed-care organizations, indemnity carriers and employers.
American HomePatient said it acquired 10 home-care companies during the first quarter, with annualized revenues of about $25 million. Net income from continuing operations rose 69% to $2.9 million, or 37 cents per share, from $1.7 million, or 30 cents per share, in the year-ago quarter. The Brentwood, Tenn.-based company reported an 88% jump in revenues to $55.1 million.
Leading long-term and subacute companies that posted increases in the first quarter said they are expanding their range of post-acute services and gearing up to treat higher-acuity patients.
GranCare reported its net income grew 8% to $6.6 million, or 28 cents per share, from $6.1 million, or 25 per share, in the year-ago quarter. Revenues grew 20% to $230 million. It attributed the growth to an increase in its higher specialty medical revenues. Atlanta-based GranCare provides subacute and long-term care at 136 facilities with 17,000 beds.
TheraTx, another Atlanta-based provider, said its earnings growth stemmed from its core subacute and long-term-care businesses. The company reported an 82% increase in net income to $5.3 million, or 26 cents per share, from $2.9 million, or 15 cents per share, in the year-ago quarter. Revenues increased 57% to $93.3 million. TheraTx runs 184 rehabilitation management programs as well as 28 inpatient facilities.
Albuquerque, N.M.-based Sun Healthcare Group said net income increased 106% to $15.3 million, or 31 cents per share, from $7.4 million, or 15 cents per share, in the year-ago quarter. Results from the first quarter of 1995 included one-time charges totaling $6.7 million, Sun said. Revenues grew 25% to $320.3 million. The company said that during the quarter, it increased its therapist productivity and changed to a new Medicare fiscal intermediary, in attempts to improve earnings from the fourth quarter of 1995, when a one-time charge of $105 million resulted in a net loss of $70.9 million.
Vencor, based in Louisville, Ky., said it continues to consolidate its operations with those of Hillhaven since the merger of the two long-term-care companies last September. The company reported a 31% increase in net income to $27.6 million, or 39 cents per share, from $21.1 million, or 31 cents per share, in the year-ago quarter. Revenues grew 13% to $626.3 million.
Mariner Health Group, which provides a variety of post-acute services in 28 states, reported a 55% decrease in net income to $2 million, or 7 cents per share, from $4.6 million, or 20 cents per share, in the year-ago quarter. Revenues for the New London, Conn.-based provider increased 68% to $135.2 million. Results included a $6.5 million one-time charge, mostly related to Mariner's merger with MedRehab, a privately held rehabilitation company with annual revenues of $52 million.
National HealthCare reported a 31% increase in net income to $5.5 million, or 56 cents per share, from $4.1 million, or 47 cents per share, in the year-ago quarter. Revenues increased 11% to $92.6 million. The Murfreesboro, Tenn.-based company said managed-care opportunities have helped its expansion. National HealthCare operates 98 long-term-care centers and 30 home-care programs.
Tustin, Calif.-based Regency Health Services reported its revenues grew 33% to $130 million. Net income dropped 11% to $2.7 million, or 16 cents per share, from $3.1 million, or 18 cents per share, in the year-ago quarter. Regency said the decline in net income reflected its long-term plans to expand its services and its geographical reach. The company acquired 18 long-term-care facilities with 2,375 licensed beds, as well as two institutional pharmacies, during the quarter.