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ADVACARE, INC. ANNOUNCES FOURTH QUARTER AND YEAR END RESULTS

 HORSHAM, Pa., Dec. 29 /PRNewswire/ -- AdvaCare, Inc. (NASDAQ: AVCR), today announced its results of operations for the fourth quarter and fiscal year ended Sept. 30, 1992, and changes in its financial administration.
 Revenues for the three-month period ended Sept. 30, 1992, increased 21 percent to $21,874,000 as compared to $18,089,000 for the fourth quarter of the prior year. For the quarter, the previously announced write-off of capitalized software and related commitments of $7,859,000 contributed to the reported loss from continuing operations of $5,562,000 for the quarter compared to income from continuing operations of $1,594,000 for the same quarter last year. The net loss per share available to common stockholders (which reflects the effect of discontinued operations in fiscal 1991 and an extraordinary item in fiscal 1992) was $.51 for the fourth quarter of fiscal 1992 as compared to $.22 for the fourth quarter of fiscal 1991.
 The increase in revenues for the quarter is attributable to the effect of four acquisitions completed around the beginning of the quarter, offset by a decline in revenues from the company's northeastern hospital businesses. The northeastern hospital operations suffered from the loss of accounts receivable backlog projects from certain of their large clients. The impact was significantly lower revenues for the fourth quarter for these operations resulting in the generation of operating losses for the units.
 "I intend to refocus our efforts in the hospital division to reduce our dependency on non-recurring project work and to integrate our outpatient and inpatient accounts receivable management capabilities," said William Joe Davis, the company's president and chief executive officer. "This is one of the company's most important challenges for 1993. I expect the fundamental strength of our base physician operations to become increasingly clear as we move into calendar 1993 and beyond."
 Revenues for the fiscal year ended Sept. 30, 1992, were up 43 percent to $78,565,000 as compared to $54,821,000 for the prior year. The loss from continuing operations for fiscal 1992 was $3,285,000 compared to $13,809,000 for the prior year. For the year, the net loss per common share from continuing operations was $.53 compared to $1.99 for the prior year. The net loss per common share for the year was $.75 compared to a net loss of $2.55 for the previous fiscal year.
 The company's results for the 1992 fiscal year as compared to the results for the prior year were affected by one-time non-cash reductions in net income available to common stockholders aggregating $4,040,000 from the prepayment of notes and the retirement of redeemable preferred stock in the second fiscal quarter of the current year and restructuring charges of $17,603,000 incurred in the prior year.
 The company said the completion of its year-end audit had been delayed by certain deficiencies in the company's accounting controls found in the course of the audit and that the company had implemented responsive measures. The company will note in its annual report accounting adjustments to its unaudited results of operations in the first three quarters of fiscal 1992 which overall will slightly increase previously reported earnings for the first nine months of the fiscal year.
 The company also announced that its corporate financial and accounting functions will be moved to the company's Dallas office where Mr. Davis is based. Bruce M. Mergenthal has been reassigned from chief financial officer to operational responsibilities within the company's northeastern hospital division operations. The company elected Frank Treadaway as acting chief financial officer. Mr. Treadaway, 44 years old, has served in Dallas as controller of the company's Physician Division since February 1992 and previously conducted a practice as a certified public accountant in the Dallas area. Through his accounting practice, Mr. Treadaway developed extensive experience in the accounting issues presented by physician accounts receivable management companies.
 The number of physicians serviced by AdvaCare increased to 5,526 at Sept. 30, 1992, from 4,537 at Dec. 6, 1991. Acquisitions during the fiscal year added 635 physicians to the company's customer base. The company also provides services to 86 hospitals and ambulatory care centers at Sept. 30, 1992, as compared to 48 locations at Dec. 6, 1991. Forty-two new departments were added through acquisition. (Prior year counts have been restated to be consistent with fiscal 1992 classifications.)
 AdvaCare is one of the leading providers of business services, particularly reimbursement management services, to health care providers throughout the United States.
 ADVACARE, INC.
 Statements of Operations (Unaudited)
 Periods ended Three Months Twelve Months
 Sept. 30 1992 1991 1992 1991
 Revenues $21,874,331 $18,089,272 $78,564,607 $54,821,188
 Operating exps.:
 Payroll and fringe
 benefits 12,138,141 9,914,049 42,379,444 28,793,044
 Selling, general
 and admin. 8,165,394 4,208,433 24,106,174 16,230,256
 Depreciation and
 amortization 1,145,919 1,352,249 4,803,372 3,651,821
 Write-off of
 capitalized
 software 7,859,443 -- 7,859,443 --
 Restructuring
 charges -- -- -- 17,602,577
 Total 29,308,897 15,474,731 79,148,433 66,277,698
 Operating income
 (loss) (7,434,566) 2,614,541 (583,826) (11,456,510)
 Interest expense 602,953 937,074 3,048,021 3,074,348
 Income (loss) from
 cont. opers. bef.
 income taxes (8,037,519) 1,677,467 (3,631,847) (14,530,858)
 Inc. tax (benefit)
 provision (2,476,016) 83,000 (347,000) (722,000)
 Income (loss) from
 cont. opers. (5,561,503) 1,594,467 (3,284,847) (13,808,858)
 Discontinued
 operations, net -- (3,250,236) -- (4,018,183)
 Net income (loss)
 before extraord.
 item (5,561,503) (1,655,769) (3,284,847) (17,827,041)
 Extraord. item,
 net (283,210) -- (2,196,476) --
 Net income (loss) (5,844,713) (1,655,769) (5,481,323) (17,827,041)
 Preferred dividends
 and accretion -- (223,532) (2,059,587) (502,947)
 Net income (loss)
 available to com.
 stockholders (5,844,713) (1,879,301) (7,540,910) (18,329,988)
 Per common share:
 Continuing opers. $(0.48) $ 0.16 $(0.53) $(1.99)
 Discontinued opers. -- (0.38) -- (0.56)
 Extraordinary item (0.03) -- (0.22) --
 Total $(0.51) $(0.22) $(0.75) $(2.55)
 Weighted aver. no. of
 common and common
 equivalent shares
 outstanding 11,573,149 8,531,731 10,053,971 7,205,492
 -0- 12/29/92
 /CONTACT: Gregory S. Campbell, chairman, or Frank Treadaway, vice president of AdvaCare, 214-226-0348; or Anthony J. Russo, Ph.D., or Susan Noonan of Noonan/Russo Communications, in New York, 212-979-9180, for AdvaCare/
 (AVCR)


CO: AdvaCare, Inc. ST: Pennsylvania, Texas IN: HEA SU: ERN

GK-OS -- NY007 -- 0275 12/29/92 10:08 EST
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