IHS profit rises 10.9%, revenue 45% Greater earnings expected with purchase of RoTech

Health care

October 29, 1997|By M. William Salganik | M. William Salganik,SUN STAFF

Growth-minded Integrated Health Services of Owings Mills posted results yesterday showing a third quarter earnings, after one-time charges, of $18.3 million, up 10.9 percent from the corresponding quarter in 1996.

Without a one-time charge of $2.4 million, related to refinancing of debt, earnings were $20.7 million, up 28 percent over the third quarter last year.

Revenue was up 45 percent -- from $326.0 million last year to $472.1 million.

Earnings per share were 66 cents without one-time charges, meeting the consensus of analysts surveyed by Nelson Information Inc. After one-time charges, per-share earnings were cents, compared with 58 cents in 1996.

More growth is on the way. Integrated last week completed its acquisition of RoTech Medical Corp. of Orlando, Fla., which will add about $500 million in annual revenue.

RoTech is strong in home respiratory services and durable medical equipment, adding to Integrated's portfolio of services for patients after they leave the hospital -- already the largest such network in the country.

Integrated now operates 1,900 "post-acute care" locations -- rehabilitation facilities, home health businesses and so on -- in 46 states.

In announcing quarterly results yesterday, Integrated said it plans to build on RoTech with more acquisitions in the home respiratory market.

Despite the overall market rally, Integrated's stock fell 56.25 cents to close at $31.75 a share, after reports that RoTech had received its fourth Food and Drug Administration warning letter in the last six months after inspectors found problems at a RoTech facility in Utah.

The FDA's warning on Oct. 3 said the facility had failed to test medical oxygen properly and had not trained employees adequately. RoTech said it had corrected the problems already.

Pub Date: 10/29/97

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