NOVACARE ANNOUNCES RECORD SECOND-QUARTER PERFORMANCE
NOVACARE ANNOUNCES RECORD SECOND-QUARTER PERFORMANCE VALLEY FORGE, Pa., Jan. 21 /PRNewswire/ -- NovaCare, Inc.
(NYSE: NOV) today announced results for the second quarter ended Dec. 31, 1991.
Net revenues increased 48 percent from $51,314,000 for the quarter ended Dec. 31, 1990, to $75,774,000 in the current quarter. Gross profit for the December quarter increased by 48 percent to $22,537,000 or a 30 percent gross profit margin. Income from operations (before merger and other non-recurring expenses) totalled $12,680,000, a 58 percent increase over income from operations for the same period a year ago. Net income for the three months ended Dec. 31, 1991, was $.18 per share ($.22 per share before merger and other non-recurring expenses) compared with $.14 per share for the three months ended Dec. 31, 1990. The company's performance continues to improve on a quarter-to- quarter basis as well. Compared with the three months ended Sept. 30, 1991, net revenues, gross profits and income from operations (before merger and other non-recurring expenses) increased 8 percent, 10 percent and 10 percent, respectively. Second quarter 1992 results mark the 15th consecutive quarter of record breaking performance. On Jan. 16, 1992, the company canceled a contract with Methodist Hospital of Sacramento, Calif., to manage the hospital's 29-bed rehabilitation wing. Year-to-date operating losses resulting from Sacramento operations aggregated $394,000. A non-recurring provision of $300,000 was recorded for the cost of canceling the Sacramento contract. The company also recorded a $1,615,000 provision for the incurred and anticipated expense of effecting the previously announced merger with Orthopedic Services, Inc. (NASDAQ: OSII). With regard to the pending merger, the company has been advised that the Securities and Exchange Commission will perform no further review of the Form S-4 registration statement filed Dec. 19. Proxy materials will be distributed in early February and a shareholders' meeting is scheduled for March 18. C. Arnold Renschler, M.D., president and chief operating officer, stated, "Improved performance stemmed from hiring 325 therapists, a 3 percent increase in clinical productivity (relative to the same period a year ago), and the return of therapist turnover to anticipated levels of 28 percent. John H. Foster, chairman and chief executive officer, stated, "We are especially pleased with the increasing efficiency of the clinical delivery system company-wide. Despite labor inflation which exceeds price increases by 3 percent to 5 percent, gross profit margins have increased from 28 percent to 30 percent over the last three quarters." He further stated, "Productivity enhancements will continue to be the company's central operating theme for the foreseeable future." NovaCare, Inc. is the largest provider of contract rehabilitation therapy services to the healthcare industry. The company also operates seven freestanding rehabilitation hospitals and six community integrated programs. NOVACARE, INC. Consolidated Statements of Operations (In thousands, except share-related data) Periods ended Three months Six months 12/31/91 12/31/90 9/30/91 12/31/91 12/31/90 Net revenues $75,774 $51,314 $69,915 $145,689 $ 97,361 Cost of services 53,237 36,133 49,363 102,600 69,142 Gross profit 22,537 15,181 20,552 43,089 28,219 S,G&A expenses 9,857 7,136 9,065 18,922 13,599 Merger and other non-recurring expenses 1,915 -- -- 1,915 -- Income from operations 10,765 8,045 11,487 22,252 14,620 Other expense (income), net 175 (44) 74 249 (548) Income before income taxes 10,940 8,001 11,561 22,501 14,072 Income taxes 3,875 2,577 3,673 7,548 4,552 Net income 7,065 5,424 7,888 14,953 9,520 Net income per share $0.18 $0.14 $0.20 $0.38 $0.26 Weighted average number of shares outstg. 39,867,991 37,688,048 39,390,840 39,629,416 36,139,590 -0- 1/21/92 /CONTACT: Timothy E. Foster, senior vice president-finance and administration of NovaCare, 215-631-9300, or Susan A. Noonan or Anthony J. Russo of Noonan/Russo Communications, 212-979-9180, for NovaCare/ (NOV) CO: NovaCare, Inc. ST: Pennsylvania IN: MTC SU: ERN
CK-OS -- NY025 -- 1705 01/21/92 10:19 EST
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|Date:||Jan 21, 1992|
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