Integrated Health rebounds $1.97 a share for 1996, compared with 1995 loss

March 06, 1997|By M. William Salganik | M. William Salganik,SUN STAFF

Integrated Health Services, the rapidly growing provider of post-hospital services based in Owings Mills, reported earnings for 1996, after one-time items, of $46.3 million, or $1.97 per share, compared with a loss of $27 million, or $1.26 a share, in 1995.

Discounting the one-time items, related to a disposal of assets in 1996 and a write-off in 1995 related to a canceled contract, earnings were $59.7 million last year, up 7 percent from $55.8 million the previous year.

"The results were a little stronger than our expectations, but in line with the Street," said Kenneth Weakley, an assistant vice president with Merrill Lynch in New York.

Revenue for the year jumped 22 percent, to $1.4 billion, from $1.2 billion in 1995. And revenue for the fourth quarter, $445.7 million, was 40 percent higher than the $319.1 million of the corresponding period a year earlier.

During the last quarter, the company completed the acquisition of two large home health care companies, First American Health Care of Georgia and Signature Home Care of Texas. It also announced an agreement to buy the largest provider of home intravenous drug treatment in the country, Coram Healthcare.

The home health growth adds to a business that had concentrated on "sub-acute" facilities, nursing homes with extra services to care for people coming out of hospital stays. The new business add other types of "post-acute" services for recovering patients. It now operates 1,000 post-acute service locations in 40 states.

While the home health acquisitions produce "a greater degree of integration risk," Weakley said, "the core business is strong." He said Integrated has made a good start on turning around First American, which was in bankruptcy when it was acquired.

D. Scott Mackesy, an analyst with Dean Witter Reynolds in New York, said, "Strategically, what the company is doing in terms of building out its post-acute network is prudent, given the changes in the health field."

While the federal Medicare program is looking to tighten home health reimbursements, he said, he expects over the next few years that home health will move from fee-for-service to per-case rates, giving an efficient operator such as Integrated a chance to improve its margins.

Integrated shares fell 87 1/2 cents yesterday, to $30.

Pub Date: 3/06/97

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