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COMMUNITY PSYCHIATRIC CENTERS ANNOUNCES FIRST QUARTER FINANCIAL RESULTS AND RESTRUCTURING CHARGE

 LAGUNA HILLS, Calif., April 8 /PRNewswire/ -- Community Psychiatric Centers (NYSE: CMY) today reported a loss of $0.88 per share for the first quarter ended Feb. 28, 1993, compared with earnings of $0.15 for the first quarter ended Feb. 29, 1992, including a $34.9 million after-tax charge, or ($0.81) per share, related to the restructuring of several of the company's psychiatric hospitals. The charge reflects the writedown to estimated net realizable value of hospitals to be sold or shut down, the writeoff of previously capitalized costs, anticipated future losses until disposition, provisions for severance pay and writedowns of related assets to net realizable value.
 Revenues for the 1993 first quarter totalled $84,689,000, compared with $84,451,000 the prior year. Psychiatric revenues were down 1.2 percent from the prior year despite increased patient volume. Psychiatric hospital admissions and patient days rose 13.0 percent and 8.7 percent, respectively, from the first quarter of fiscal 1992. However, these increases were offset by a 9.1 percent decrease in the average net revenue per patient day to $448 from $493 a year ago, primarily the result of discounting to a growing managed care payor base, as well as the increased use of lower-priced treatment alternatives to inpatient care such as partial hospitalization. Psychiatric length of stay fell to an average of 17.3 days from 18.0 days the previous year.
 Not including the restructuring charge, the net loss for the 1993 first quarter totalled $3,029,000, or ($0.07) per share, vs. net earnings of $6,941,000 or $0.15 per share in the year-earlier period. Contributing to the quarterly loss were higher staffing costs incurred to regain market share and improve psychiatric facility utilization, as well as start-up costs for the company's new Transitional Hospitals Corp. facilities. The THC start-up losses for the quarter represented nearly $0.03 of the per-share loss.
 In addition to downsizing the psychiatric division, the company has implemented a cost-reduction plan throughout its remaining hospitals and corporate headquarters designed to help the company take full advantage of improving volume trends and return to profitability as quickly as possible. The company is making substantial reductions to staffing levels and eliminating other costs which are not generating sufficient revenues. Future savings from these actions could amount to as much as $20 million on an annualized basis.
 Said Richard L. Conte, CPC's chairman and chief executive officer: "Obviously, we are greatly disappointed by the performance of the company's U.S. psychiatric hospital division in the first quarter, particularly since higher than budgeted staffing ratios kept us from benefiting from the positive admission and patient day trends which have continued from the fourth quarter of 1992.
 "Therefore, we have implemented a comprehensive action plan designed to arrest rising costs and address declining revenue per day. This process has entailed a thorough review of our underperforming facilities to determine the viability of keeping them in operation; developing strategies to enhance the performance of facilities that are profitable but not performing up to budget; eliminating unprofitable services, programs and units; and reducing staffing levels and administrative costs throughout our hospitals and at our corporate headquarters," Conte continued.
 "The restructuring charge reflects our decision to sell or close hospitals which did not perform up to our expectations in the first quarter. We believe they can no longer be competitive given the demographics of their marketplace, the proliferation of local competition, the pressures of managed care pricing wars, and other difficult conditions resulting from the nationwide effort to contain health care costs."
 Conte added, "Management will now be able to concentrate fully on the hospitals that are best-positioned to survive the industry shakeout by competing for managed care business with quality care and service at the most competitive price in their local markets. We will also focus considerable attention on the continued expansion of our Transitional Hospitals Corp. subsidiary, which recently completed its first two acquisitions and now has a total of four long-term acute care units."
 Community Psychiatric Centers delivers psychiatric and long-term acute care services through 53 facilities in the United States, Puerto Rico and the United Kingdom. The company's stock is traded on the New York, Boston, Midwest and Pacific stock exchanges.
 COMMUNITY PSYCHIATRIC CENTERS
 Consolidated Statement of Earnings
 (Unaudited, subject to year-end adjustments)
 Quarter ended Feb. 28, 1993 Feb. 29, 1992
 Revenues
 Operating revenues $83,663,000 $83,555,000
 Other income 1,026,000 896,000
 Total Revenues 84,689,000 84,451,000
 Costs and expenses:
 Operating 45,505,000 38,991,000
 General & administrative 40,056,000 30,977,000
 Depreciation 3,395,000 3,112,000
 Interest 617,000 354,000
 Restructuring charge(A) 54,950,000 ---
 Total Costs and Expenses 144,523,000 73,434,000
 Earnings (loss) before taxes (59,834,000) 11,017,000
 Income Taxes (benefit) (21,899,000) 4,076,000
 Net earnings (loss) ($37,935,000) $6,941,000
 Earnings (loss) per share ($0.88) $0.15
 Average shares outstanding 42,972,000 45,927,000
 (A) Reflecting the writedown of hospitals to be sold or closed, the writeoff of previously capitalized costs, anticipated future losses until disposition, provisions for severance pay and writedowns of related assets.
 COMMUNITY PSYCHIATRIC CENTERS
 Selected Statistics
 Quarter ended Feb. 28, 1993 Feb. 29, 1992
 Psychiatric Hospitals
 Total:(A)
 Patient days 184,203 169,466
 Admissions 10,659 9,430
 Patient revenue $82,564,000 $83,555,000
 Net revenue per patient day $448.22 $493.05
 Number of hospitals 51 50
 Average licensed beds 4,974 5,044
 Average length of stay 17.3 18.0
 (A) Total figures equivalent to same-store because of transfer of beds to THC (see below) and leased beds to owned beds in new U.K. facility.
 Transitional Hospitals Corp.
 Number of facilities/beds 2/125
 Admissions 69
 Patient Days 2,137
 -0- 4/8/93
 /CONTACT: Suzanne S. Hovdey of Community Psychiatric Centers, 714-831-1166/
 (CMY)


CO: Community Psychiatric Centers ST: California IN: HEA SU: ERN

JL-MS -- LA013 -- 4013 04/08/93 06:01 EDT
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