- Net Income of $0.05 Per Share Excluding Non-Recurring Items
- Revenues Climbed 7%
- Restructuring Reduces Operating Costs By $7 Million Annually
LOUISVILLE, Ky., Nov. 12 /PRNewswire/ -- Caretenders HealthCorp
(Nasdaq: CTND) today reported its financial results for the quarter ended
September 30, 1998 which improved substantially from the June quarter.
Second Quarter Results Positive
For the quarter ended September 30, 1998 the Company reported net income
from operations (excluding one-time items) of $166,992 or $0.05 per share
versus net income of $414,663 or $0.13 per share in the prior year. Including
restructuring charges of $323,000 net loss per share was $0.05 These lower
results were principally due to the impact of the Interim Payment System for
Medicare home health services legislated by the Balanced Budget Act of 1997.
As previously announced, the Company implemented a restructuring plan on July
31, 1998 including work force reduction, branch closings and changes in
compensation programs. The actions are expected to reduce operating costs by
an annualized amount of approximately $7 million ($4.9 million of which is
expected to be realized in the current fiscal year). Revenues rose 7% to
$24,524,299 over the same period last year.
"As we have said in our last several releases the new Medicare
reimbursement rules have presented daunting challenges for the industry." said
William B. Yarmuth, Chairman and CEO. "We believe our restructuring actions
have positioned us to operate within the new system as evidenced by the
results for this quarter. We remain cautiously optimistic about the balance
of the fiscal year and still anticipate profitable operation in the third and
fourth quarters."
Congress Makes Small Reforms
The recent Federal budget package, passed on the last day of the session,
included a small relief package for home care providers. The primary changes
included a small increase in reimbursement limits and a one-year postponement
of the deadline for implementing a prospective payment system or imposing a
further 15% reduction in cost limits. The impact of these changes on the
Company is expected to be insignificant.
Caretenders HealthCorp
Quarter Ended September 30,
1998 1997 Change %
Net Revenues $24,524,299 $22,833,566 $ 1,690,733 7.4%
Net income (loss) from
operations from non-
recurring items $ 166,992 $ 414,663 $ (247,671) NM
Non-recurring items:
Goodwill write-down, net
of tax - - -
Cumulative effect on prior
years of change in
accounting principle,
net of tax - - -
Restructuring Charge,
net of tax (323,125) - (323,125)
Reported Net Income
(loss) $ (156,133) $ 414,663 $ (570,796) NM
Weighted Average Shares
Outstanding
Basic 3,120,413 3,119,436 977 0.0%
Diluted 3,120,413 3,143,945 (23,532) -0.7%
Earnings Per Share - Basic
Net income (loss) from
operations $ 0.05 $ 0.13 $ (0.08) NM
Goodwill write-down,
net of tax - - -
Cumulative effect on
prior years of change in
accounting principle
(net of tax) - - - 0.0%
Restructuring Charge (0.10) - (0.10) 0.0%
Reported Net Income
(loss) $ (0.05) $ 0.13 $ (0.18) NM
Six-Months Ended September 30,
1998 1997 Change %
Net Revenues $ 48,190,754 $ 44,354,816 $ 3,835,938 8.6%
Net Income (loss) from operations
before non-recurring
items $ (613,362) $ 707,232 $(1,320,594) NM
Non-Recurring items:
Goodwill write-down,
net of tax (4,585,361) - (4,585,361)
Cumulative effect on
prior years of change
in accounting
principle, net of tax (382,515) - (382,515)
Restructuring Charge,
net of tax (323,125) - (323,125)
Reported Net Income
(loss) $ (5,904,363) $ 707,232 $(6,611,596) NM
Weighted Average Shares
Outstanding:
Basic 3,120,413 3,119,436 977 0.0%
Diluted 3,120,413 3,143,945 (23,532) -0.7%
Earnings Per Share - Basic
Net income (loss) from
operations $ (0.20) $ 0.23 $ (0.42) NM
Goodwill write-down,
net of tax (1.47) - (1.47)
Cumulative effect on prior
years of change in accounting
principle (net of tax) (0.12) - (0.12) 0.0%
Restructuring Charge (0.10) - (0.10) 0.0%
Reported Net Income
(loss) $ (1.89) $ 0.23 $ (2.12) NM
NM = not meaningful
Caretenders HealthCorp provides home and community based health care
services in Kentucky, Maryland, Alabama, Massachusetts, Connecticut, Indiana,
Ohio, Virginia and Florida.
All statements, other than statements of historical facts, included in
this news release, including the Company's ability to maintain operating costs
at levels below reimbursements and the objectives and expectations of
management for future operating results, are forward-looking statements.
These forward-looking statements are based on the Company's current
expectations. Although the Company believes that the expectations with
respect to internal matters reflected in such forward-looking statements are
reasonable, there can be no assurance that such expectations will prove to be
correct.
Because forward-looking statements involve risks and uncertainties, the
Company's actual results could differ materially. The potential risks and
uncertainties which could cause actual results to differ materially could
include the Company's ability to achieve cost savings without negatively
impacting operations; the impact of further changes in the Medicare
reimbursement system, including the ultimate implementation of a prospective
payment system; government regulation; health care reform; pricing pressures
from third-party payors; and changes in laws and interpretations of laws
relating to the healthcare industry. For a more complete discussion regarding
these and other factors which could affect the Company's financial
performance, refer to the Company's Securities and Exchange Commission filing
on Form 10-K for the year ended March 31, 1998, in particular information
under the headings "Business" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations." The Company disclaims any
intent or obligation to update its forward-looking statements.
SOURCE Caretenders HealthCorp
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Company News On-Call:
http://www.prnewswire.com/comp/784275.html or fax,
800-758-5804, ext. 784275
CONTACT:
William Yarmuth or Steve Guenthner,
Caretenders HealthCorp, 502-899-5355
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