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PROVIDENCE HEALTH CARE REPORTS 11 PERCENT GAIN IN REVENUES

 PROVIDENCE HEALTH CARE REPORTS 11 PERCENT GAIN IN REVENUES
 BEREA, Ohio, Aug. 14 /PRNewswire/ -- Providence Health Care, Inc. (NASDAQ: PHCI) reported an 11 percent revenue increase for the six month period ended June 30, 1992, over the same period in 1991. After extraordinary net charges of $269,663 incurred from the write-off of loan fees and the use of net operating loss tax carryforwards, the company reported net income for the first six months of $35,333 as compared to net income of $10,060 for the same period in 1991. After a $46,027 extraordinary gain recorded in the second quarter from the use of net operating loss tax carryforwards, the company reported $205,412 in net income for the tree months ended June 30, 1992, compared to $152,675 for the same period in 1991.
 Net patient service revenues were $6,816,104 and $13,518,676 for the three and six month periods ending June 30, 1992 as compared to $6,255,601 and $12,129,003 for the same periods in 1991.
 Income before income taxes and extraordinary items was $268,463 and $561,485 for the three and six month periods ending June 30, 1992 as compared to $152,675 and $10,060 for the periods in 1991.
 Operating expenses increased during the first half of 1992, primarily reflecting an increase in total census, including increases in the number of Medicare patients which require (and reimburse) higher levels of ancillary services. During the three and six month periods ended June 30, 1992, an average of 90.6 percent and 91 percent respectively of total beds were filled. During the same period of 1991, 89.8 percent and 88.8 percent respectively of the beds were filled.
 "We expect steady improvement in revenues and earnings for the remaining two quarters of 1992," commented Lawrence B. Cummings, president and chief executive officer of Providence. "As of June 1, 1992 the interest rate on our bank debt fell from 12.13 percent to prime plus 2.5 percent, which will result in substantial earnings improvements in the last two quarters of 1992. Furthermore, we are in the process of replacing a 75 bed older facility with a new 120 bed facility under construction in a more affluent area, and are preparing to renovate another existing facility to enhance its ability attract private pay patients. Also, on July 1, 1992 we began providing services under a contract to manage a 150 bed facility in the Cleveland area. All three projects are expected to further improve long-term revenues and earnings."
 PROVIDENCE HEALTH CARE, INC.
 Consolidated Statements of Operations (Unaudited)
 Period Ended Three Months Ended Six Months Ended
 June 30 1992 1991 1992 1991
 Patient service
 revenue, net $ 6,816,104 $ 6,255,601 $13,518,676 $12,129,003
 Expenses:
 Operating:
 Salaries, wages
 and benefits 3,203,864 2,843,028 6,225,096 5,638,350
 Other 1,420,056 1,096,209 2,744,315 2,089,108
 Sub-total 4,623,920 3,939,237 8,999,411 7,727,458
 General and admin 1,082,084 700,247 2,002,553 1,453,992
 Depreciation and
 amortization 315,732 307,418 645,028 619,852
 Total 6,021,736 4,946,902 11,646,992 9,801,302
 Income before
 interest, income
 taxes and
 extraordinary item 794,368 1,308,699 1,871,684 2,327,701
 Interest:
 Expense (568,037) (1,180,685) (1,375,679)(2,364,035)
 Income 42,132 24,661 65,480 46,394
 Total (525,905) (1,156,024) (1,310,199)(2,317,641)
 Income before
 income taxes and
 extraordinary item 268,463 152,675 561,485 10,060
 Provision for
 income taxes 109,078 54,760 256,488 54,760
 Income (loss) before
 extraordinary items 159,385 97,915 304,997 (44,700)
 Extraordinary items:
 Gain from use of
 net operating loss
 carryforwards 46,027 54,760 46,027 54,760
 Loss from early
 extinguishment of
 debt net of tax
 effect of $210,460 -- -- (315,690) --
 Net income $ 205,412 $152,675 $ 35,333 $ 10,060
 Net income (loss)
 per common share $ 0.04 $ 0.09 $ (0.01) $ (0.04)
 Average common
 shares outstand 4,451,009 1,365,854 3,555,864 1,365,854
 Providence Health Care Inc.: Notes to consolidated financial statements.
 1. Basis of presentation: The accompanying unaudited financial statements have been prepared by the company pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of the company, the accompanying financial statements contain all the adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position of the company as of June 30, 1992 and for the three and six month periods ended June 30, 1992 and 1991.
 The balance sheet as of Dec. 31, 1991 has been taken from the audited financial statements of the company as of that date.
 Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounted principles have been condensed or omitted. These condensed financial statements should be read in conjunction with the consolidated financial statements included in the company's 1991 annual report on Form 10-K.
 The results of operations for the three and six month periods ended June 30, 1992 are not necessarily indicative of the results to be expected for the full year.
 2. Non-cash transactions: Pursuant to certain amendments to the terms of the company's indebtedness entered into in connection with the company's initial public offering, the company's principal lender converted $1,000,000 in long-term debt into warrants to purchase 211,792 shares of the company's common stock at an exercise price of $.01 per share.
 3. Extraordinary items: The amount of net operating loss carryforward that can be utilized is limited to approximately $300,000 per year due to the over 50 percent change in ownership that occurred in connection with the company's initial public stock offering on Feb. 21, 1992.
 The loss from early extinguishment of debt includes the write-offs of $123,035 of deferred loan costs and $403,115 in prepayment penalties, both associated with the portion of the debt prepaid with the proceeds of the company's initial public stock offering.
 -0- 8/14/92
 /CONTACT: Lawrence B. Cummings, chairman, president and CEO of Providence Health Care, 216-243-4732/
 (PHCI) CO: Providence Health Care ST: Ohio IN: HEA SU: ERN


TM-LD -- NY011 -- 9835 08/14/92 07:31 EDT
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