IHS profits go up 115% in quarter

October 27, 1994|By John Fairhall | John Fairhall,Sun Staff Writer

Integrated Health Services Inc. yesterday reported record operating earnings of $9.9 million in the third quarter, a 115 percent increase that helped drive its stock to a 52-week high of $38.75.

The Owings Mills company, a national leader in providing post-hospital care, reported that revenues in the quarter ended Sept. 30 rose 145 percent, to $177.2 million, over the same period last year.

Integrated's net earnings were less, $5.6 million, reflecting an extraordinary charge of $4.3 million for paying off debt incurred in acquiring Central Park Lodges Inc., a nursing home chain, last year.

Earnings per share, before the extraordinary charge, increased 29 percent, to 44 cents -- growth that was achieved, noted Dr. Robert N. Elkins, chairman and chief executive officer of Integrated, even though outstanding shares of stock increased 67 percent over the same period last year.

Net earnings per share were 27 cents a share vs. 35 cents a year ago.

Meeting or exceeding analysts' expectations, the company is well positioned to continue its earnings and revenue growth, according to William Hicks of Cowen & Company in Boston. Mr. Hicks said that the company has money to "fund expansion programs going forward without having to tap into the public capital markets."

Integrated provides a less costly alternative to hospital care, treating medically stable patients in converted nursing homes. The rapidly expanding firm operates 186 facilities with more than 24,000 beds.

Kurt Funderburg of Ferris Baker Watts in Baltimore said the company has been able to increase earnings through "better operating practices" and by efficient conversion of nursing facilities.

Integrated "will continue to grow horizontally through the acquisition and integration of long-term care facilities," Dr. Elkins said. "We will also grow vertically, through the acquisition of companies servicing various post-acute needs like home care, pharmacy and rehabilitation."

Integrated Health

Services Inc. ... ... ... ... Ticker ... ... ... ... Yesterday's

Owings Mills ... ... .. .. .. Symbol ... ... ... ... Cls. ... Chg.

... ... ... ... ... ... .. .. IHS ... ... ... .. ... 38 5/8 .. .. +1 3/8

Period ended

9/30/94 ... ... ... ... 3rd qtr. ... ... ... ... Year ago ... ... Chg.

Revenue ... ... ... ... $177,165 ... ... ... ... $72,171 .. .. .. +145.5%

Net Income ... .. .. .. $5,588 ... ... ... .. .. $4,597 ... .. .. +21.6%

Primary EPS .. .. .. .. $0.27 ... ... ... ... .. $0.35 .. ... ... -22.9%

... ... ... ... ... 9 mos. ... ... ... ... Year ago ... ... ... Chg.

Revenue ... ... ... $448,187 ... .. .. ... $192,693 ... ... ... +132.6%

Net Income .. .. .. $18,754 ... ... ... .. $12,399 .. .. .. ... +51.3%

Primary EPS ... ... $1.12 ... ... .. .. .. $0.98 ... ... .. ... +14.3%

Figures in thousands (except per share data.)

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