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HEALTHDYNE ANNOUNCES SECOND QUARTER RESULTS

 MARIETTA, Ga., July 28 /PRNewswire/ -- Healthdyne, Inc. (NASDAQ: HDYN) today announced its results for the second quarter of 1993.
 Revenues for the second quarter were $66.7 million as compared to $60.3 million for the second quarter of 1992. The company reported net earnings of $3.6 million, or $0.24 per share, which includes a $9.5 million pretax gain as a result of the sale of stock by Healthdyne Technologies in a public offering during the quarter. Approximately $11.5 million of the proceeds of this public offering were used to reduce consolidated bank debt.
 Revenues for the six months ended June 30 increased to $130.8 million, compared to $116.3 million during the first six months of 1992. Earnings for the six month period declined to $3.0 million, or $0.19 per share, in 1993 from $7.9 million, or $0.50 per share, in 1992 in large part as a result of the changing environment in which health care service companies must now operate.
 Healthdyne Technologies (OTC: HDTC), the company's manufacturing subsidiary, continued to show improvements in performance. They reported record revenues of $16.2 million, which is a 29 percent increase over the second quarter of 1992. Their net earnings for the quarter increased to $1.1 million, a 15 percent increase over the second quarter of 1992. Healthdyne Technologies successfully completed an initial public offering of 1.75 million shares of its common stock on June 22, reducing Healthdyne's ownership to 81 percent of Healthdyne Technologies.
 Healthdyne Perinatal Services, the company's home obstetrical care subsidiary, reported net revenues for the quarter of $17.3 million, which is down approximately 7 percent from the second quarter of 1992. However, this represents an 11 percent increase over revenues for the first quarter of 1993. Perinatal Services incurred a small operating loss of $279,000 in the quarter, vs. an operating profit of $2.5 million for the second quarter of 1992. However, substantial progress was made during the quarter in reducing the losses caused by a decline in patient census as a result of the national decline in birth rates. Significant adjustments have been made in management structure, staffing, and other cost components to compensate for this temporary reduction in the number of high risk patients that are available for services, and the company expects to see profitability return to Perinatal Services during the third quarter.
 Home Nutritional Services, Inc. (NASDAQ: HNSI), the company's 68 percent owned home infusion therapy subsidiary, had revenues for the quarter of $35.0 million, which is a 15 percent increase from $30.5 million for the second quarter of 1992. Net earnings for the quarter declined to $68,000, as compared to $2.3 million for the second quarter of 1992. This decline in profitability was primarily a result of selling, general and administrative expenses climbing at a rate during the quarter that was too fast for the rate of revenue growth. Increasing amounts of managed care business also resulted in a reduction in anticipated revenues as more of HNS' business comes under managed care contracts. A continual increase in patient census has occurred, but the decrease in pricing for managed care contracts continues to put pressure on operating margins. The gross profit margin for the quarter is approximately the same as the first quarter of 1993, which indicates that the costs of providing infusion services have been reduced and are being matched with the lower prices from the managed care portion of the business. Significant cuts in staff were made as soon as it was determined that expenses were out of line with revenue growth.
 According to Parker H. Petit, chairman and chief executive officer of Healthdyne: "We are all pleased with the continuing strong performance of Healthdyne Technologies, and the consummation of the sale of 19 percent of their common stock in a public offering during the quarter. Our Perinatal Services subsidiary has shown increases in patient census in spite of the decline that has occurred in our national birth rate. They almost returned to profitability during the quarter, and we expect that to occur during the third quarter. We were disappointed in the progress made at HNS because they allowed their expenses to grow during the quarter at a rate in excess of their growth in revenues. HNS has corrected that problem by making changes in their staffing levels, and we expect increases in profitability in the quarters ahead. In the managed care segment of their business, we have seen some indications that price stabilization is occurring, but we are still not comfortable with the predictability of HNS' net revenue growth."
 Healthdyne is a national provider of high technology home care medical services, including infusion therapy through Home Nutritional Services, and home obstetrical care through Healthdyne Perinatal Services, and a manufacturer of high tech home care products through Healthdyne Technologies.
 HEALTHDYNE, INC. AND SUBSIDIARIES
 CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
 (Amounts in thousands, except per share amounts)
 (Unaudited)
 3 mos. ended 6/30 1993 1992
 Revenues $66,663 $60,310
 Cost of revenues 32,742 26,603
 Gross profit 33,921 33,707
 Selling and admin. expenses 27,451 21,587
 Provision for doubtful
 accounts 4,901 4,835
 Research and development
 expenses 911 588
 Operating profit 658 6,697
 Interest income 110 200
 Interest expense (833) (233)
 Other income (expense), net (1,109) (87)
 Gain on sale of subsidiary stock 9,550 ---
 Minority interest in earnings of
 partnerships (488) (590)
 Earnings before income tax expense
 and minority interest in net
 earnings of subsidiary 7,888 5,987
 Income tax expense 4,229 1,528
 Earnings before minority interest
 in net earns. of subsidiary 3,659 4,459
 Minority interest in net earnings
 of subsidiary 27 752
 Net earnings $ 3,632 $ 3,707
 Net earnings per common
 share and common share
 equivalent $ .24 $ .24
 Weighted average number of
 common shares and common
 share equivalents 15,204 15,751
 6 mos. ended 6/30 1993 1992
 Revenues $130,824 $116,291
 Cost of revenues 65,121 51,042
 Gross profit 65,703 65,249
 Selling and admin. expenses 52,125 40,669
 Provision for doubtful
 accounts 9,759 9,305
 Research and development
 expenses 1,824 1,082
 Operating profit 1,995 14,193
 Interest income 234 433
 Interest expense (1,565) (374)
 Other income (expense), net (1,126) (193)
 Gain on sale of subsidiary stock 9,550 ---
 Minority interest in earnings of
 partnerships (975) (822)
 Earnings before income tax expense
 and minority interest in net
 earnings of subsidiary 8,113 13,237
 Income tax expense 4,808 3,546
 Earnings before minority interest
 in net earns. of subsidiary 3,305 9,691
 Minority interest in net earnings
 of subsidiary 352 1,807
 Net earnings $ 2,953 $ 7,884
 Net earnings per common
 share and common share
 equivalent $ .19 $ .50
 Weighted average number of
 common shares and common
 share equivalents 15,213 15,849
 HEALTHDYNE, INC. AND SUBSIDIARIES
 Consolidated Condensed Balance Sheets
 (Amounts in thousands)
 ASSETS 6/30/93 12/31/92
 Current assets: (Unaudited)
 Cash and short-term
 investments $ 15,816 $ 14,931
 Trade accounts receivable, net 87,699 80,096
 Inventories 16,068 13,341
 Deferred income taxes 3,540 4,814
 Refundable income taxes 1,451 4,536
 Other current assets 5,975 5,401
 Total current assets 130,549 123,119
 Property and equipment, net 22,938 21,975
 Goodwill and other intangibles,
 net 29,596 26,623
 Other assets 2,387 2,176
 Total $ 185,470 $ 173,893
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities:
 Current installments of long-
 term debt and obligations
 under capital leases $ 2,895 $ 3,334
 Accounts payable, principally
 trade 12,682 12,349
 Other current liabilities 19,895 17,980
 Total current liabilities 35,472 33,663
 Long-term debt and obligations
 under capital leases, excluding
 current installments 42,762 44,319
 Deferred income taxes 10,836 6,766
 Other long-term liabilities 337 426
 Total liabilities 89,407 85,174
 Minority int. in subsidiary and
 partnerships 25,359 21,025
 Shareholders' equity 70,704 67,694
 Total $ 185,470 $ 173,893
 -0- 7/28/93
 /CONTACT: Donald R. Millard of Healthdyne, 404-423-4529/
 (HDYN HDTC HNSI)


CO: Healthdyne, Inc. ST: Georgia IN: HEA SU: ERN

BR-BN -- AT011 -- 7243 07/28/93 11:13 EDT
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Date:Jul 28, 1993
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