Ihs Reports 1st-quarter Earnings Up 34 Percent

Revenue Growth Came Mostly From Acquisitions

April 25, 1997|By M. William Salganik | M. William Salganik,SUN STAFF

Integrated Health Services of Owings Mills reported first-quarter earnings of $18.4 million yesterday, up 34 percent from the $13.8 million recorded in the first quarter last year.

Net income was 61 cents per share -- beating consensus analysts' estimates of 57 cents. Per-share earnings were 54 cents in the same period in 1996.

Revenue for the first quarter was $461.1 million, up 41 percent from $327.6 million in 1996.

Marc B. Levin, executive vice president, said 11 to 14 percentage points of the revenue growth came in businesses the company held last year, while the balance came from acquisitions, particularly in the area of home health care.

During the past year, Integrated has built itself into the largest provider in the country of services for people leaving hospitals, or "post-acute" care. Traditionally strong in skilled nursing and rehabilitation facilities, it is the fourth-largest home health care provider as well.

Home health and hospice services account for 35 percent of the company's revenue.

The key acquisition -- Integrated's biggest ever -- was First American Health Care of Brunswick, Ga., which had about $400 million a year in revenue.

In the deal, which was completed in October, Integrated paid $154.1 million in cash, with an additional payout of up to $159 million to be based on earnings and payable from 2000 through 2004.

"The first quarter represents an extremely strong quarter for the company," said Dr. Robert N. Elkins, chairman and chief executive officer. "IHS is now seeing the tangible results of the efforts begun last year to reposition the company by expanding our home health operations and post-acute network. We believe our financial results reflect the improvement we have made in operations of the acquired companies, and this improvement will continue in the quarters ahead."

The expansion pushed revenue from specialty medical services -- everything beyond traditional nursing home care, and generally bringing higher profit margins -- to 79 percent of Integrated's total, up from 67 percent in the first quarter of 1996.

Integrated's stock closed yesterday at $30.875 a share, up 87.5 cents for the day, and near the 52-week high of $31.50, reached March 11.

Pub Date: 4/25/97

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