KS: Interview with R. Scrushy,ÿ CEO of HRC on CNBC
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Interview with Richard Scrushy, ChM and CEO of HRC
From: C R Nasmythe
Date: 03 Nov 1999
Time: 11:28:49
Remote Name: 63.22.104.99
Comments
HRC meets reduced estimates at 16½; revenue down 5% to $993m, net income down 45% to $66.9mÿ
HRC dropping plans to spin-off inpatient unit in September, saying it expects to take $300m in restructuring charges by year’s endÿ
Will continue to look at spin-off; just postponed it indefinitelyÿ
Adjusting themselves now to crushing changes brought on 1997 Balanced Budget Act and to changes in managed care reimbursement; this Q good example of operating margins of a
company like thatÿ
27-28% margins mean company is in good shapeÿ
Thinks street still likes idea of spin-off, it’s just uncertain about changes in reimbursement – HRC delay was due to tax reasons, and that they didn’t want to drag
shareholders through processÿ
HRC instead focused on managing facilities, pricing issues, margins, and taking advantage of development opportunitiesÿ
Results seeing this q indicates they made the right decisionÿ
On September10th Scrushy and managing team purchased 6-7m shares at 5 ó; he thinks it’s a good investmentÿ
Scrushy thinks HRC has bottomed out; can see growth Q over Qÿ
Outstanding assets, strong balance sheet, very good companyÿ
Thinks margins will continue to grow; 27-29% margins strong for any industry – growth is just a matter of timeÿ
HRC Facts:ÿ
HRC the largest US provider of rehabilitative health care and outpatient surgery services with over 1900 locations in US, UK, Australia and Puerto Ricoÿ
Partnered with HLTH and WBMD to form sports medicine web siteÿ
Contracts with major insurers, HMOs and large employers like WMT, GT and WINÿ
Centres include: Outpatient surgery centres, diagnostic centres for imaging services, occupational medicine centres for work-related illnesses and injuryÿ
Plans to terminate some existing national and regional managed care contracts with unfavourable pricing and renegotiate new contracts in local marketsÿ
Postponed plans to spin-off inpatient operation to shareholdersÿ
Will invest up to $1b over 3-5 yrs to make technology and facility upgrades and improve mgmt info and billing systemsÿ
HRC down 1/16 to 6 1/8ÿ
cnetinvestor.com;
Last changed: November 03, 1999ÿ |
