Youth Services International loses $3.4 million

November 14, 1998|By Ted Shelsby | Ted Shelsby,SUN STAFF

Youth Services International Inc., the Owings Mills-based operator of juvenile-offender facilities that is in the process of being acquired by a Florida company, yesterday reported a sharp drop in third-quarter revenue and a net loss of $3.4 million.

The company said results were negatively impacted by losses and costs of about $2.8 million related to the closing of its behavioral health program in College Station, Texas.

The loss in the three months that ended Sept. 30 was equal to 30 cents a share. For the comparable quarter of 1997, Youth Services reported a deficit of $843,000, or 8 cents a share.

Revenue in the most recent quarter totaled $22.4 million, down from $30.65 million.

Youth Services reported a loss of $3.5 million from continuing operations, compared with a profit of $117,000 in the 1997 quarter.

The company announced that it will not continue the operation of its Timberline program after the contract expires this month.

Youth Services was selected by the state of Florida in November last year to manage the 30-bed Timberline Youth Center, an academy for young women serving sentences of nine to 12 months. It had been unable to operate the facility profitably.

Timothy P. Cole, chairman and chief executive, said the closing of program was necessary for the company's financial recovery.

Youth Services was founded in 1991 by W. James Hindman, who made a fortune by founding and building Jiffy Lube, a quick-oil-change retail chain which was eventually sold.

In September, Youth Services announced that it had agreed to be acquired by Correctional Services Corp., based in Sarasota, Fla., in a stock transaction valued about $43 million. Correctional Services will also assume $32.2 million in Youth Services debt.

Youth Services stock closed yesterday at $4.5625, unchanged.

Pub Date: 11/14/98

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