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LIVING CENTERS OF AMERICA ANNUAL RESULTS UP 44 PERCENT

 HOUSTON, Nov. 16 ~PRNewswire~ -- Living Centers of America, Inc. (NYSE: LCA) announced today operating results for the fiscal year ended Sept. 30, 1992 and for its fourth quarter. The company reported net income on a pro forma basis of $10,926,000, or $1.16 per share, for the year as compared to $7,583,000, or $.80 per share, for 1991, up 44 percent over prior year. For the quarter ended Sept. 30, 1992, Living Centers reported net income on a pro forma basis of $2,882,000, or $.31 per share, compared to $1,809,000, or $.19 per share, for the same period in 1991, up 59 percent over prior year.
 "We attribute this strong financial performance to census growth, effective controls on labor expenses, operating costs and overhead, and a reduction in interest expense," said Living Centers of America Chairman and Chief Executive Officer Edward L. Kuntz. "We believe we have met the challenge of becoming a publicly-held company with great success, including both a smooth transition and an outstanding first- year financial performance," Kuntz added.
 Pro forma adjustments for both 1992 and 1991 reflect elimination of the operations of previously divested centers and the recognition of the effect of the recent public offering as though it occurred on Oct. 1, 1990, including the restatement of interest expense as a result of debt restructuring and the removal of certain nonrecurring contingent payments.
 Average center occupancy, after adjusting for divested operations, was 82.1 percent in fiscal 1992, compared to 80.9 percent in fiscal 1991. "We have seen strong census growth across all of our markets. We believe this is due to strengthened facility-level marketing efforts and favorable demographic trends," Kuntz explained.
 Internally generated cash was used to prepay the next four principal payments on the company's major debt instrument, eliminating any current debt obligation under the Bank Credit Facility agreement. The next scheduled principal payment on the outstanding loan is Dec. 31, 1994. "The company's strong cash position has allowed us to reduce our debt to capitalization ratio from 53 percent to 42 percent since becoming a public company," Kuntz said. "We are confident that our financial strength will allow us to take full advantage of potential growth opportunities."
 Living Centers of America, Inc. is the fourth largest provider of long-term health care in the United States. The company operates 216 centers in nine states: Texas, Colorado, Florida, Oklahoma, Louisiana, Nebraska, Wyoming, Arizona and Mississippi. Of the 216 centers, 158 provide long-term health care and 58 are devoted to the care of the developmentally disabled. Headquartered in Houston, the company is a publicly-held corporation whose stock is traded on the New York Stock Exchange. The company's facilities are licensed for 19,431 beds and the company employs more than 15,500 individuals dedicated to providing quality care for the elderly, infirm, developmentally disabled and persons with Alzheimer's disease.
 LIVING CENTERS OF AMERICA, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF INCOME
 (In thousands, except per share amounts -- Unaudited)
 THREE MONTHS
 PRO FORMA HISTORICAL
 Periods ended Sept. 30 1992 1991 1992 1991
 Net Revenues $ 94,925 $ 80,513 $ 94,925 $103,894
 Costs and Expenses:
 Payroll and payroll related 51,640 46,887 51,640 59,831
 Operating and administrative 34,342 26,308 34,336 33,448
 Depreciation & amortization 3,448 2,909 3,448 3,462
 Total 89,430 76,104 89,424 96,741
 Income from operations 5,495 4,409 5,495 7,153
 Interest Expense, Net:
 Intercompany interest expense 0 0 0 1,873

 Interest expense, net 1,038 1,612 1,038 413
 Total 1,038 1,612 1,038 2,286
 Other Income 0 0 0 0
 Income before income taxes
 and equity earnings 4,457 2,797 4,463 4,867
 Provision for Income Taxes 1,936 1,063 1,936 1,813
 Income before equity earnings 2,521 1,734 2,527 3,054
 Equity Earnings 361 75 361 75
 Net Income $ 2,882 $ 1,809 $ 2,888 $ 3,129
 Earnings Per Share $ 0.31 $ 0.19 $ 0.31 $ 0.36
 Weighted Average Common and Common
 Equivalent Shares Outstanding 9,417 9,462 9,417 8,640
 YEAR
 PRO FORMA HISTORICAL
 Period ended Sept. 30 1992 1991 1992 1991
 Net Revenues $349,170 $306,385 $350,977 $396,669
 Costs and Expenses:
 Payroll and payroll related 195,879 176,584 196,488 229,382
 Operating and administrative 118,961 101,003 120,016 130,593
 Depreciation and amortization 12,955 11,234 12,977 13,512
 Total 327,795 288,821 329,481 373,487
 Income from operations 21,375 17,564 21,496 23,182
 Interest Expense, Net:
 Intercompany interest expense 0 0 2,866 7,877
 Interest expense, net 4,784 6,788 2,713 1,288
 Total 4,784 6,788 5,579 9,165
 Other Income 0 0 0 1,300
 Income before income taxes
 and equity earnings 16,591 10,776 15,917 15,317
 Provision for Income Taxes 6,911 4,095 6,632 5,784
 Income before equity earnings 9,680 6,681 9,285 9,533
 Equity Earnings 1,246 902 1,246 902
 Net Income $ 10,926 $ 7,583 $ 10,531 $ 10,435
 Earnings Per Share $ 1.16 $ 0.80 $ 1.16 $ 1.21
 Weighted Average Common and Common
 Equivalent Shares Outstanding 9,450 9,462 9,072 8,640
 LIVING CENTERS OF AMERICA, INC. AND SUBSIDIARIES
 CONSOLIDATED BALANCE SHEETS
 (dollars in thousands, except share amounts)
 September 30,
 1992 1991
 ASSETS
 Current Assets:
 Cash and cash equivalents $9,902 $66
 Receivables (less allowances of
 $2,747 and $2,260) 25,007 30,876
 Notes receivable, net 6,899 5,459
 Supplies 3,689 3,756
 Prepaid insurance 5,592 17,751
 Deferred income taxes 8,734 4,526
 Other (including patient trust funds
 of $2,673 and $2,478) 4,638 4,161
 Total current assets 64,461 66,595
 Property and Equipment:
 Land, buildings and improvements 154,159 146,707
 Furniture, fixtures and equipment 36,520 34,348
 Leased property under capital leases 5,423 5,423
 Total 196,102 186,478
 Less accumulated depreciation 73,071 62,862
 Total 123,031 123,616
 Goodwill, net 26,002 26,923
 Investment in Unconsolidated
 Subsidiary 4,599 3,353
 Notes Receivable, net 6,055 14,101
 Other Assets 2,188 2,031
 Total $226,336 $236,619
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current Liabilities:
 Current maturities of long-term debt $ 1,439 $ 1,497
 Insurance notes payable 4,108 --
 Accounts payable 12,004 11,161
 Accrued payroll and related expenses 17,819 19,552
 Occupational injury and benefit
 reserve 3,669 --
 Accrued property taxes 3,241 3,237
 Patient trust funds 2,673 2,478
 Other accrued expenses 12,301 6,777
 Total current liabilities 57,254 44,702
 Long-Term Debt, net of current
 maturities 69,282 104,030
 Deferred Income Taxes and Other
 Noncurrent Liabilities 2,509 3,918
 Commitments and Contingencies
 Stockholders' Equity:
 Preferred stock, par value $.01;
 5 million shares authorized; none
 issued -- --
 Common stock, par value $.01;
 35 million shares authorized;
 9,462,180 and 8,640,000
 shares issued 95 86
 Capital surplus 90,167 83,627
 Retained earnings 7,630 256
 Treasury stock at cost - 50,000
 shares (601) --
 Total stockholders' equity 97,291 83,969
 Total $226,336 $236,619
 -0- 11~16~92
 ~CONTACT: Dorothy M. Wiley, APR, of Living Centers of America, 713-578-4650~
 (LCA)


CO: Living Centers of America, Inc. ST: Texas IN: HEA SU: ERN

LR -- NY094 -- 1386 11~16~92 15:00 EST
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Date:Nov 16, 1992
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