Wednesday June 30, 8:15 am Eastern Time
NCS HealthCare sees earnings shortfall
CLEVELAND, June 30 (Reuters) - NCS HealthCare Inc. said Wednesday its fiscal 1999 fourth-quarter and fiscal year 2000 earnings would fall short of expectations, due largely to changes in the Medicare reimbursement structure.
The pharmacy services company said it expects earnings of 10 cents per diluted share for the fourth quarter, ended today, compared with analysts' consensus estimate of 28 cents.
It anticipates earnings of 40 to 50 cents a share for fiscal year 2000, compared with a consensus estimate of $1.26.
The estimates were compiled by First Call Corp.
NCS said it might require a waiver of one covenant in its bank credit facility due to the expected shortfall in fourth quarter earnings. It said it was ''optimistic'' it would receive such a waiver before making its official fourth quarter earnings report public on or about August 5.
The Medicare reimbursement system, the Prospective Payment System, which came into effect in 1997, has put pricing pressure on its Medicare-reimbursed facilities, particularly nursing homes, NCS said.
''The adverse impact of PPS has exceeded what we anticipated. While we experienced Medicare price pressure in the March quarter, April and May results indicate sharp declines in acuity and census levels at our customers' facilities,'' Kevin Shaw, president and chief executive officer of NCS, said in the company's statement.
In addition to the Medicare reimbursement pricing pressures, Shaw said the company has also lost customers ''due to industry consolidation.''
NCS shares closed Tuesday at $5.75 on the Nasdaq Stock Market.
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OUCH!
Well, the market already reflects all of this. It's uphill from here. |
