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HOSPITAL STAFFING REPORTS SECOND QUARTER RESULTS; ANNOUNCES PLANS TO RESTRUCTURE CORPORATE AND HOME HEALTHCARE BRANCH OPERATIONS

 HOSPITAL STAFFING REPORTS SECOND QUARTER RESULTS; ANNOUNCES PLANS
 TO RESTRUCTURE CORPORATE AND HOME HEALTHCARE BRANCH OPERATIONS
 FORT LAUDERDALE, Fla., July 15 /PRNewswire/ -- Hospital Staffing Services, Inc. (NYSE: HSS) today reported results for the second quarter and six months ended May 31, 1992.
 Revenue during the second quarter ended May 31, 1992 was a record $32,669,965, representing an increase of 45 percent over revenue of $22,501,436 reported for second quarter of fiscal 1991. Net income during the recently ended second quarter amounted to $686,825, or $.12 per share on a primary basis, compared to net income of $655,327, or $.14 per share on a primary basis, during the second quarter of fiscal 1991.
 Revenue during the six months ended May 31, 1992 was a record $63,110,488, representing an increase of 58 percent over revenue of $40,018,244 reported for first six months of fiscal 1991. Net income during the recently ended six month period totaled $1,604,685, or $.27 per share on a primary basis, vs. net income of $1,098,639, or $.25 per share on a primary basis, during the first six months of fiscal 1991.
 Leonard J. Cass, president of Hospital Staffing Services, noted that earning per share for the second quarter and six months ended May 31, 1992 reflect the inclusion of 1,151,400 common shares from the company's October 1991 stock offering in the computation of weighted average shares outstanding. Cass also noted for the second consecutive quarter, the company's travel nurse group recorded an increase in volume, following almost two years of flat results.
 Commenting on the results, Ronald A. Cass, chairman of Hospital Staffing Services, said, "In analyzing both the first and second quarter results it became apparent that an inordinate amount of our corporate resources have been dedicated to the Medicare segment of our home healthcare business. As a result of this, we have concluded that it will enhance the company's profitability over the long term to restructure our corporate operations into a proprietary segment, which will include both our travel nurse group and our proprietary home health care branches, and a pure Medicare segment. Both of these segments will be incorporated under a parent company structure. As our Medicare business has grown at a substantial, and even disproportionate rate relative to the growth of the proprietary segment of our home care business, we have found ourselves focusing our resources more on managing the complexities of the Medicare program and maximizing the cost shifting benefits derived from that program, rather than on that segment of the home care business which offers the utmost profit potential.
 "Accordingly, this restructuring program will result in a substantial management shift towards building the proprietary segment of our home healthcare business. This shift will feature an aggressive focus on developing management agreements with both hospital-based and free-standing home healthcare agencies. As well, we will focus on being an innovator and industry leader in the fast growing capitated managed care home healthcare market where our branch automation systems have demonstrated significant operating efficiencies. This effort, combined with our current proprietary revenue base, plus the revenue base we will be acquiring in the VIP Health Services and VIP Health care Services acquisitions, and our expansion in the Mid-South region, is expected to result in a considerable amount of proprietary growth over the next 12 months.
 "As a result of this corporate restructuring, and a corresponding separation of branch operations by business segment, proprietary operating costs will increase and there will be a reduction of Medicare benefits, resulting in an aggregate cost of approximately $2 million over the next 12 months. This restructuring will not reduce the number of Medicare visits currently being performed, but will result in lower revenues from Medicare due to lower reimbursable costs. In addition, the company expects to incur between $200,000 and $400,000 in expenses over the next 12 months in order to comply with OSHA requirements and the Americans With Disability Act.
 "While this will affect profitability over the short term, we believe the steps we are taking will result in a utilization of corporate and branch resources that reflects what we view to be the most appropriate and profitable direction for the company. In particular, we believe this reallocation of management and branch resources best reflects our current view of the future of the home healthcare market. We see the trend in home healthcare and, in particular, Federal programs as shifting from a cost-based reimbursement model towards a proprietary model that fits neatly with HSSI's view of the healtcare marketplace as favoring those with high operating efficiencies and an ability to utilize technology to improve productivity. Therefore, the direction we have embarked upon also reflects our confidence that HSSI is well positioned to not only to react to changing business environments, but to be the initiator of change as well."
 Hospital Staffing Services, Inc. is a leading professional home healthcare services and recruitment organization specializing in the provision of nursing services to patients at home and in healthcare institutions through a national network of home healthcare offices; and the placement of medical personnel, on a temporary and interim basis, in hospitals and other health care facilities located throughout the United States, Canada and the United Kingdom.
 HOSPITAL STAFFING SERVICES, INC.
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited)
 For the Three Months Ended May 31,
 1992 1991
 Revenues $ 32,669,965 $ 22,501,436
 Income Before
 Income Tax Provision $ 1,129,583 $ 1,095,327
 Income Tax Provision (442,758) (440,000)
 Net Income $ 686,825 $ 655,327
 Earnings Per
 Common Share $ .12 $ .14
 Weighted Average
 Shares Outstanding 5,897,601 4,565,454
 For the Six Months Ended May 31,
 1992 1991
 Revenues $ 63,110,488 $ 40,018,244
 Income Before
 Income Tax Provision $ 2,631,685 $ 1,817,639
 Income Tax Provision (1,027,000) (719,000)
 Net Income $ 1,604,685 $ 1,098,639
 Earnings Per
 Common Share $ .27 $ .25
 Weighted Average
 Shares Outstanding 5,913,565 4,479,082
 -0- 7/15/92
 /CONTACT: Leonard J. Cass of Hospital Staffing Services, 305-771-0500; or Barry A. Rothman of Greenstone Roberts Public Relations, 305-975-3500, for Hospital Staffing Services/
 (HSS) CO: Hospital Staffing Services, Inc. ST: Florida IN: HEA SU: ERN


JB-AW-SS -- FL001 -- 9696 07/15/92 16:08 EDT
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Date:Jul 15, 1992
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