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HOME NUTRITIONAL SERVICES ANNOUNCES 1992 FINANCIAL RESULTS

 MARIETTA, Ga., March 3 /PRNewswire/ -- Home Nutritional Services, Inc. (NASDAQ: HNSI) today announced financial results for the fourth quarter and fiscal year ended Dec. 31, 1992.
 Revenues for the year grew 27 percent to $129 million. Net earnings, before giving effect for an after-tax charge due to restructuring and a special provision for doubtful accounts receivable totaling $10.9 million, were $8.3 million, or $0.70 per share, compared with 1991 earnings of $11.4 million, or $0.97 per share
 For the fourth quarter, revenue increased 26 percent to $36.2 million. Net earnings for the quarter, before giving effect to the special charges, were $1.4 million, or $0.12 per share, compared to $3.2 million or $0.26 per share, in the prior year's quarter.
 During the year, the company relocated its corporate headquarters from Parsippany, N.J. to Marietta, added a second major reimbursement center, and restructured its operations as a result of changes in reimbursement patterns that have been occurring in the home infusion therapy industry. As a result, after-tax restructuring charges totaling $4.2 million were incurred. In addition, changes in the reimbursement patterns of indemnity insurance carriers developed late in the year necessitated a special provision for doubtful accounts of $6.7 million after-tax. These charges resulted in the company incurring a net loss for both the fourth quarter and for the year of $0.83 and $0.22 per share, respectively.
 Commenting on the results, John W. Anderson, president and CEO, stated: "While we are very pleased with the continued strong growth in our revenues which we largely attribute to our focus on managed care, we are disappointed to report to our shareholders that because of the dramatic industry changes in 1992, we are taking these special charges. This brings to an end HNS's seven years of consistent growth in revenues and earnings. However, all of the accumulated costs associated with our move and corporate staff reorganization have required us to take the $4.2 million charge for these activities. This move will greatly increase our efficiency and productivity, and I believe you will begin to see these benefits when we report our 1993 first quarter results. You should recall that we were the first company to report in mid-1992 that more infusion therapy revenues were being generated from managed care sources, but, fortunately, that happened to be one of our strategic plans. This increased managed care business resulted in lower prices for our therapies and reduced gross profit margins. During the latter part of 1992, further changes in the reimbursement patterns of indemnity insurance carriers required an additional charge for doubtful accounts of $6.7 million after-tax. Many of the indemnity carriers either arbitrarily took discounts from our list prices or demanded discounts through case management. In many instances, discounts were even taken on invoices for services rendered in 1991. Despite our firm resistance to these pressures through threatened and actual litigation, we found our rates of collection for these types of accounts decreased to the point that additional reserves against our accounts receivable were considered necessary. We believe that our new management information system has been extremely helpful with decisions relating to the management of our accounts receivable which is evidenced by a 35-day decline in the aging during 1992."
 Anderson further stated that: "We strongly believe that we have positioned HNS for the new environment in which home and alternate site infusion therapy companies will operate. Implementation of our new management information system has been very timely because it has helped us prepare for the essential task in this new environment of managing our business more closely and efficiently. Combined with our new management structure and personnel, I am confident that we will continue to grow our revenues at rates higher than the industry and see our profits begin to increase quarter to quarter as we proceed into 1993 and beyond. We have made the necessary changes in our clinical and operational procedures, we have procured new national purchasing agreements to reduce the costs of our drugs and supplies, and we continue to aggressively pursue managed care contracts on a national, regional and local basis. We believe we have taken the correct steps and are pursuing the proper strategies to continue to be a major national provider of alternate site and home infusion therapy services in the years ahead."
 HNS is a national provider of home infusion therapies and related alternate site services. The corporation is one of the oldest and largest providers of home infusion care and conducts its business through 40 regional centers, 19 satellite facilities, and 28 additional sites of service.
 HOME NUTRITIONAL SERVICES, INC. AND SUBSIDIARIES
 Consolidated Condensed Statements of Earnings
 (Amounts in thousands, except per share amounts)
 3 mos. ended 12/31 12 mos. ended 12/31
 1992 1991 1992 1991
 (Unaudited)
 Revenues $36,225 28,700 128,980 101,320
 Cost of revenues 18,536 11,868 61,069 40,687
 Gross profit 17,689 16,832 67,911 60,633
 Selling and administrative
 expenses 11,330 8,976 41,205 32,097
 Provision for doubtful
 accounts 3,616 2,797 12,505 10,075
 Special provision for doubtful
 accounts and restructuring
 expenses 17,870 --- 17,870 ---
 Operating earnings (loss) (15,127) 5,059 (3,669) 18,461
 Interest income 57 195 442 609
 Interest expense (436) (51) (713) (205)
 Other expense, net (45) (2) (48) (10)
 Minority interest in earnings
 of partnerships (125) (30) (341) (57)
 Earnings (loss) before income
 tax expense (15,676) 5,171 (4,329) 18,798
 Income tax expense (benefit)(6,138) 2,000 (1,688) 7,358
 Net earnings (loss) $(9,538) 3,171 (2,641) 11,440
 Net earns. (loss) per common share
 and common share equivalent $(.83) .26 (.22) .97
 Weighted avg. number of common
 shares and common
 share equivalents 11,525 12,015 11,749 11,849
 Consolidated Condensed Balance Sheets
 (Amounts in thousands)
 Dec. 31, 1992 Dec. 31, 1991
 ASSETS
 Current assets:
 Cash and short-term investments $ 7,811 16,073
 Trade accounts receivable, net 45,376 47,453
 Inventories 3,722 2,951
 Deferred income taxes 4,690 735
 Other current assets 912 669
 Total current assets 62,511 67,881
 Property and equipment, net 6,649 4,421
 Goodwill, net 22,931 3,328
 Other assets 1,352 1,205
 Total $93,443 76,835
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities:
 Current installments of
 long-term debt $ 2,780 168
 Accounts payable, principally trade 5,191 4,025
 Due to affiliate 502 33
 Accrued liabilities 2,638 4,938
 Total current liabilities 11,111 9,164
 Long-term debt, excluding
 current installments 23,381 715
 Total liabilities 34,492 9,879
 Minority interest 593 60
 Shareholders' equity 58,358 66,896
 Total $93,443 76,835
 -0- 3/3/93
 /CONTACT: Donald R. Millard of Home Nutritional Services, 404-423-4529/
 (HNSI)


CO: Home Nutritional Services, Inc. ST: Georgia IN: MTC SU: ERN

RA-BN -- AT001 -- 2280 03/03/93 08:10 EST
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