Smaller, single-specialty physician practice management companies seem to have ended 1997 on a happier financial note than bigger, multispecialty firms like MedPartners and PhyCor.
The first wave of 1997 PPM earnings reports, released in February, shows large increases not only in revenues but also in net income. Same-practice growth, as well as acquisitions, was credited for the increases. Many more companies will release their 1997 earnings reports this month.
A sample of the early returns:
AmeriPath went public in 1997 and used its stock to acquire numerous practices, including locations in Jacksonville, Fla., and Pittsburgh late in the year. A total of 144 pathologists are affiliated with AmeriPath, including 14 that came on board with the mid-February acquisition of Indianapolis-based Anatomic Pathology Associates.
Revenues rose 33% to $24.2 million. The mid-February announcement didn't immediately boost the company's stock, which has traded at less than $2 per share for most of its history. But it at least gave a little hope to investors, including Morgan Stanley Venture Capital, which put in $10 million late last year.
PhyCor, because of an $83 million fourth-quarter charge, finished 1997 with earnings of only $3.2 million, or 5 cents per share, on $1.1 billion in revenues. The charge reflected the restructuring of five clinics and the sale of two others. Without the nonrecurring charge, earnings would have been $57 million, or 85 cents per share, compared with $36.4 million, or 60 cents per share, on revenues of $766.3 million in 1996.
Nashville-based PhyCor also expects to record a $15 million charge against first-quarter 1998 earnings for the Jan. 7 dissolution of its purchase of MedPartners, which itself is taking a $145 million charge against fourth-quarter 1997 earnings to reflect, among other things, losses suffered at its Southern California operations. A full 1997 earnings report for MedPartners is pending.