Coram Healthcare Reports First Quarter 1998 Results
DENVER, May 11 /PRNewswire/ -- Coram Healthcare (NYSE: CRH) announced today net revenue of $107.7 million for the quarter ended March 31, 1998, compared to $106.9 million for the quarter ended December 31, 1997. Net loss for the quarter was $15.1 million or $(0.31) per share, compared to a net loss of $19.2 million or $(0.39) per share for the last quarter of 1997. Gross profit as a percentage of net revenue increased to 25.3% of net revenue from 22.4% in the last quarter of 1997. Coram's operating margin improved across all divisions, and in total by over $5.2 million in the first quarter compared to the quarter ended December 31, 1997. First Quarter SG&A expenses declined by approximately $1.9 million from the last quarter of 1997.
"We are confident that our first quarter improvement is the result of the continued commitment of each Coram employee to bring focus to our mission and to improve long-term value for our shareholders," said Donald J. Amaral, Coram's Chairman and CEO. "Our continued outstanding JCAHO survey results, most recently accreditation with commendation in Las Vegas and Portland, Oregon, are just one indicator of that commitment. And, our recently announced agreement exclusively to provide home health care services in eight states for certain members of Aetna U.S. Healthcare is a sign of the market's recognition of Coram's ability and commitment to provide the highest quality services available," said Mr. Amaral.
"In addition, we are pleased with the vote of confidence Coram has received from its debt holders through the signing of our agreement to restructure the Rollover Notes," continued Mr. Amaral. On May 6, 1998, Coram entered into an agreement with such holders to restructure its debt which is subject to certain usual and customary closing conditions including obtaining shareholder approval at the June 24, 1998 Annual Meeting. As previously announced, the debt restructuring, upon its closing, would involve an exchange of the Rollover Notes for two debt instruments: $150.0 million of Series A Subordinated Notes with an initial annual interest rate of 9.875%; and, approximately $87.9 million of Series B Convertible Subordinated Notes at an interest rate of 8%. In addition, all warrants issued in connection with the Rollover Notes will be returned and canceled as part of the agreement. "Once consummated, the restructuring of our debt with more favorable rates will provide significant interest expense savings for Coram -- approximately $17 million annually," said Wendy L. Simpson, Coram's Chief Financial Officer. "In addition to the agreement to restructure our debt, we have selected a commercial bank and are proceeding with due diligence to secure a credit line of approximately $60 million for future healthcare acquisitions and other purposes," said Ms. Simpson.
For the remainder of 1998, Coram plans to continue to focus on increasing profitable sales, improving operations and cash flow and seeking new avenues and markets for delivering quality home health care services. "We are enthusiastic about growing at all levels -- through our base infusion business, Coram Prescription Services, and our One-Stop-Shop services at the Resource Network," said Richard M. Smith, Coram's President. "The need for home health care services continues to grow, and as a quality leader in the infusion industry, Coram plans to be a part of that growth." |
