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 BEREA, Ohio, Aug. 16 /PRNewswire/ -- Providence Health Care, Inc. (NASDAQ: PHCI) reported an 18 percent gain in revenues from $13.5 million in the first six months of 1992 to $16.0 million in the first six months of 1993. The company reported income per common share before the extraordinary items and the cumulative effect of the change in accounting principle of $.07 and $.02 for the six and three month periods ended June 30, 1993, in comparison to $.07 and $.03 for the same periods in 1992 respectively. After a $99,000 or $0.02 per common share increase in earnings from the adoption of Statement of Financial Accounting Standards No. 109 -- Accounting for Income Taxes, net income was $349,113 or $.09 and $72,423 or $.02 per common share for the six and three month periods ended June 30, 1993, respectively. These compare to $35,333 or, after preferred stock dividends, a loss of $0.01 per common share, and $205,412 or $.04 per common share for the six and three month periods ended June 30, 1992, respectively, after net extraordinary charges, net of tax benefit, of $269,664 or $0.08 per common share.
 Lawrence B. Cummings, chairman and chief executive officer, said, "Earnings were lower in the second quarter of 1993 partially due to increased administrative and general costs associated with seeking acquisitions, including costs associated with a significant acquisition that the company declined further pursuit of in the second quarter of 1993. Another cause was a decline in census at three of our facilities which we are addressing. However, we continue to be excited about the progress of our existing projects. The new Greenbriar facility has now reached occupancy of 118 out of 120 beds. Even though they only became available in May of 1993, 21 of the 50 new beds at our Northwestern facility are currently occupied. The benefits of both of these projects were not fully realized in the second quarter results. The Westwood facility in Bluefield, Va., which we acquired in January of 1993, has so far met our expectations. We are currently applying for a certificate of need to convert nine of Westwood's assisted living beds into sub- acute beds. We expect these projects to be profitable operations in the future."
 Providence Health Care is a provider of long-term nursing care, principally in the State of Ohio. The company operates 13 nursing facilities in Ohio, one in Vermont and one in Virginia for an aggregate of 1,245 beds. Providence also has a contract to manage a 175-bed facility in Ohio.
 Consolidated Statements of Income
 Periods ended Three months Six months
 June 30, 1993 1992 1993 1992
 Patient service
 revenue, net $8,296,807 $6,816,104 $15,960,082 $13,518,676
 Salaries, wages
 and benefits 3,713,387 3,203,864 7,067,052 6,255,096
 Other 2,060,390 1,420,056 3,858,891 2,744,315
 Total operg. expenses 5,773,777 4,623,920 10,925,943 8,999,411
 General and
 administrative 1,414,785 1,082,084 2,761,966 2,002,553
 Depreciation and
 amort. (Note B) 425,233 315,732 815,697 645,028
 Interest 633,268 568,037 1,259,024 1,375,679
 Total expenses 8,247,063 6,589,773 15,672,630 13,022,671
 Income from operations 49,744 226,331 287,452 496,005
 Other income 72,715 42,132 135,464 65,480
 Inc. bef. inc. taxes,
 extraord. item and
 cumulative effect of
 change in accounting
 for income taxes 122,459 268,463 422,916 561,485
 Provision for
 inc. taxes (Note B) 50,036 109,078 172,803 256,488
 Inc. bef. extraord. item
 and cumulative effect
 of accounting change 72,423 159,385 250,113 304,997
 Extraordinary item:
 Gain from use of net operg.
 loss carryforwards --- 46,027 --- 46,026
 Loss from early
 extinguishment of debt,
 net of tax effect
 of $210,460 --- --- --- (315,960)
 Inc. bef. cumulative effect
 of accounting change 72,423 205,412 250,113 35,333
 Cumulative effect as of
 Jan. 1, 1993 of change in
 method of accounting for
 income taxes (Note B) --- --- 99,000 ---
 Net income $72,423 $205,412 $349,113 $35,333
 Inc. bef. extraord. item and
 cumulative effect of acct.
 change per common share $.02 $.03 $.07 $.07
 Extraordinary item per
 common share --- .01 --- (.08)
 Cumulative effect as of
 Jan. 1, 1993 of change in
 method of accounting for inc.
 taxes per common share --- --- .02 ---
 Net income (loss)
 per common share $.02 $.04 $.09 ($.01)
 Avg. common shares
 outstng. 3,763,004 4,451,009 3,803,738 3,555,864
 Notes to Consolidated Financial Statements
 (A) 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, 1993 and its results of operations for the three and six month periods ended June 30, 1993 and 1992.
 The balance sheet as of Dec. 31, 1992 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 accounting 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 1992 annual report on Form 10-K.
 The results of operation for the three and six month periods ended June 30, 1993 are not necessarily indicative of the results to be expected for the full year.
 Certain general and administrative expenses for the three and six month periods ended June 30, 1992 were reclassified to conform to the 1993 presentation.
 (B) Income Taxes: The Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," (FAS 109) effective for 1993. Effective Jan. 1, 1993, the company changed its method of accounting from the deferred method to the liability method required by FAS 109. As permitted under the new rules, the prior year's financial statements have not been restated.
 The cumulative effect of adopting FAS 109 as of Jan. 1, 1993 was to increase net income by $99,000. For the six months ended June 30, 1993, application of the new statement decreased pretax income by $106,000 due to increased depreciation expense resulting from the FAS 109 requirement to report assets acquired in prior business combinations at their pretax amounts. The adoption of FAS 109 was also the principal factor in the reduction of the company's effective tax rate from 1992 to 1993.
 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities financial reporting purposes and the amounts used for income tax purposes. Significant components of the company's deferred tax liabilities and assets as of Jan. 1, 1993 are as follows:
 Current deferred income tax assets:
 Current portion of non-compete agreement amort. $147,000
 Valuation allowance for deferred tax assets (109,000)
 Other deferred tax assets 40,000
 Total: $ 78,000
 Noncurrent deferred income tax liabiliti
 Difference between book and tax basis of property $8,413,000
 Net operating tax loss carryforwards (931,000)
 Valuation allowance for deferred tax assets 625,000
 Other deferred tax liabilities (137,000)
 Total: $7,970,000
 -0- 8/16/93
 /CONTACT: Lawrence B. Cummings, chairman, president and CEO, of Providence Health Care, Inc., 216-243-4732/

CO: Providence Health Care, Inc. ST: Ohio IN: HEA SU: ERN

MP -- NYM013 -- 3110 08/16/93 13:20 EDT
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Publication:PR Newswire
Date:Aug 16, 1993

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