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LIVING CENTERS OF AMERICA THIRD QUARTER RESULTS UP 40 PERCENT

 LIVING CENTERS OF AMERICA THIRD QUARTER RESULTS UP 40 PERCENT
 HOUSTON, July 21 /PRNewswire/ -- Living Centers of America Inc. (NYSE: LCA) announced today operating results for the third quarter ended June 30, 1992. The company reported net income on a pro forma basis of $3,138,000, or $.33 per share, for the quarter compared to $2,239,000, or $.24 per share, for the same period in 1991, up 40 percent over prior year. For the nine months ended June 30, 1992, Living Centers reported net income on a pro forma basis of $8,044,000, or $.85 per share, compared to $5,775,000, or $.61 per share, for the same period in 1991, up 39 percent over prior year.
 Pro forma adjustments for both 1992 and 1991 reflect the elimination of the operations of previously divested centers and the recognition of the effect of the recent initial 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.
 "This strong financial performance is reflective of solid census growth and of our continuing emphasis upon quality of services to our residents while maintaining effective controls over labor expenses, operating costs and overhead," said Living Centers of America Chairman and Chief Executive Officer Edward L. Kuntz.
 Average center occupancy, after adjusting for divested operations, was 82.2 percent for the current quarter, up from 80.6 percent for the same period in 1991. The year-to-date average center occupancy, after adjusting for divested operations, was 81.7 percent, up from 80.7 percent for the same period in 1991.
 In June and July 1992, the company acquired 50,000 shares of its common stock for an aggregate cost of $600,000 as part of a plan to fund an anticipated employer's contribution to a company sponsored 401-K Plan and Deferred Retirement Incentive Plan. Contributions to the plan are expected to take place subsequent to fiscal 1992 year end.
 Internally generated cash flow was used to prepay the fifth installment due under the long-term portion of the company's Bank Credit Facility. The next scheduled principal payment on the outstanding loan is September 30, 1993. "The company's strong cash position has allowed us to reduce our long-term debt to capitalization ratio to 43 percent and to position ourselves to take advantage of potential growth opportunities," Kuntz said.
 Living Centers of America is the fourth largest operator of long- term health care centers in the United States. The company operates 212 long-term care centers and centers for the developmentally disabled+ with 19,178 beds in nine states: Texas, Colorado, Florida, Oklahoma, Louisiana, Nebraska, Wyoming, Arizona and Mississippi. The corporate office is located in Houston, Texas. The company has approximately 15,600 employees.
 LIVING CENTERS OF AMERICA, INC. AND SUBSIDIARIES
 Consolidated Statements of Income
 (In thousands, except per share amounts)
 (unaudited)
 Three Months Ended June 30,
 Pro Forma Historical
 1992 1991 1992 1991
 Net revenues $86,171 $77,820 $86,171 $99,543
 Costs and expenses:
 Payroll and
 payroll related 47,911 44,327 47,911 57,629
 Operating and
 administrative 29,055 25,762 29,020 32,544
 Depreciation and
 amortization 3,220 2,884 3,220 3,454
 80,186 72,973 80,151 93,627
 Income from
 operations 5,985 4,847 6,020 5,916
 Interest expense, net:
 Intercompany interest
 expense 0 0 0 1,903
 Interest expense,
 net 1,120 1,676 1,033 282
 1,120 1,676 1,033 2,185
 Other income 0 0 0 0
 Income before
 income taxes and
 equity earnings 4,865 3,171 4,987 3,731
 Provision for income
 taxes 1,994 1,204 2,045 1,418
 Income before
 equity earnings 2,871 1,967 2,942 2,313
 Equity earnings 267 272 267 272
 Net income $3,138 $2,239 $3,209 $2,585
 Earnings per share $ 0.33 $ 0.24 $ 0.34 $ 0.30
 Weighted average
 common and common
 equivalent shares
 outstanding 9,459 9,462 9,459 8,640
 LIVING CENTERS OF AMERICA, INC. AND SUBSIDIARIES
 Consolidated Statements of Income
 (In thousands, except per share amounts)
 (unaudited)
 Nine Months Ended June 30,
 Pro Forma Historical
 1992 1991 1992 1991
 Net revenues $254,245 $225,872 $256,052 $292,775
 Costs and expenses:
 Payroll and
 payroll related 144,289 129,697 144,848 169,551
 Operating and
 administrative 84,569 74,695 85,680 97,145
 Depreciation and
 amortization 9,507 8,325 9,529 10,050
 238,365 212,717 240,057 276,746
 Income from
 operations 15,880 13,155 15,995 16,029
 Interest expense, net:
 Intercompany interest
 expense 0 0 2,866 6,004
 Interest expense,
 net 3,746 5,176 1,675 875
 3,746 5,176 4,541 6,879
 Other income 0 0 0 1,300
 Income before
 income taxes and
 equity earnings 12,134 7,979 11,454 10,450
 Provision for income
 taxes 4,975 3,031 4,696 3,971
 Income before
 equity earnings 7,159 4,948 6,758 6,479
 Equity earnings 885 827 885 827
 Net income $8,044 $5,775 $7,643 $7,306
 Earnings per share $ 0.85 $ 0.61 $ 0.85 $ 0.85
 Weighted average
 common and common
 equivalent shares
 outstanding 9,461 9,462 8,954 8,640
 LIVING CENTERS OF AMERICA, INC. AND SUBSIDIARIES
 Consolidated Balance Sheets
 (In thousands, except share amounts)
 June 30, September 30,
 1992 1991
 (Unaudited)
 Assets
 Current assets:
 Cash and cash equivalents $ 9,154 $ 66
 Receivables (less allowances
 of $3,024 and $2,260) 22,616 30,876
 Notes receivable 4,954 5,459
 Supplies 3,827 3,756
 Prepaid insurance 9,120 17,751
 Deferred income taxes 4,846 4,526
 Other (including patient
 trust funds of $2,626 and
 $2,478) 5,290 4,161
 Total current assets 59,807 66,595
 Property and equipment:
 Land, buildings and
 improvements 150,777 146,707
 Furniture, fixtures and
 equipment 35,544 34,348
 Leased property under
 capital leases 5,423 5,423
 191,744 186,478
 Less accumulated
 depreciation 70,354 62,862
 121,390 123,616
 Goodwill 26,316 26,923
 Notes receivable and other
 assets 15,749 19,485
 $223,262 $236,619
 Liabilities and Stockholders' Equity
 Current liabilities:
 Current maturities of
 long-term debt $ 1,503 $ 1,497
 Insurance notes payable 7,311 0
 Accounts payable 14,345 11,161
 Accrued payroll and related
 expenses 21,177 19,552
 Accrued property taxes 2,332 3,237
 Patient trust funds 2,626 2,478
 Other accrued expenses 5,905 6,777
 Total current liabilities 55,199 44,702
 Long-term debt 70,052 104,030
 Deferred income taxes and other
 noncurrent liabilities 3,345 3,918
 Stockholders' equity:
 Preferred stock, par value $.01;
 authorized - 5 million shares;
 none issued -- --
 Common stock, par value $.01;
 authorized - 35 million shares;
 issued - 9,462,180 and
 8,640,000 shares 95 86
 Capital surplus 90,167 83,627
 Retained earnings 4,742 256
 Treasury stock at cost -
 30,000 shares (338) --
 Total stockholders' equity 94,666 83,969
 $223,262 $236,619
 -0- 7/21/92
 /CONTACT: Dorothy M. Wiley of Living Centers of America, 713-578-4650/
 (LCA) CO: Living Centers of America Inc. ST: Texas IN: HEA SU: ERN


PS -- NY045 -- 1234 07/21/92 10:46 EDT
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