Looks like they are turning it around
Coram Announces Second Quarter 1998 Results
DENVER, July 28 /PRNewswire/ -- Coram Healthcare Corporation (NYSE: CRH) announced financial results today for the second quarter ended June 30, 1998.
Comparing the Company's second quarter results with those of the first quarter ended March 31, 1998:
* Revenue increased to $117.2 million from $107.7 million.
* Selling, general and administrative expenses decreased to 18.5% of net revenue.
* EBITDA margins improved to 6% from 5%.
* Net loss for the quarter improved to $4.5 million or ($.09) per share from $15.1 million or ($.31) per share.
* The number of base business patients served in the quarter increased by approximately 1,000 patients, or 2%.
"Coram's second quarter performance demonstrates that the strategies we are pursuing to return Coram to profitability are working," said Donald J. Amaral, Coram's Chairman and Chief Executive Officer. "The sale of our lithotripsy business last year allowed us to significantly reduce our debt and focus our management team on our strategic business units. The results have been gratifying. Since the end of March, our sales have increased 7% in the base business -- all internally generated. We signed 27 new home infusion contracts and renewed 11 contracts in the second quarter at rates which we anticipate will allow us to provide high quality patient care in exchange for reasonable rates. In addition, sales in our ancillary divisions, Resource Network (R-Net) and Coram Prescription Services (CPS) have grown by over 20% since the end of March."
"Our business plan calls for continued growth in the second half of 1998 and in 1999," said Richard M. Smith, Coram's President. "We plan to grow our base business by: focusing our efforts on more medically intensive services; designing a lower cost delivery model for lower acuity patient services; entering new markets; and acquiring complementary companies. Coram Prescription Services plans to grow its mail order business by continuing to convert appropriate Coram patients to mail order pharmacy, by expanding its services to diabetics and patients with H.I.V., and through strategic acquisitions. CPS also plans to pursue the expansion of its pharmacy benefit management services by focusing on specific markets and making strategic acquisitions. Our R-Net division is marketing its network management services on an exclusive basis to health maintenance organizations, at-risk physician groups, integrated delivery systems and other managed care payers. In addition, we plan to further integrate R-Net and CPS with Coram's base business to expand cross-selling opportunities for Coram's core services."
On June 30, 1998, Coram finalized the restructuring of its Subordinated Rollover Notes, with the completed exchange of the 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%. All warrants issued in connection with the Rollover Notes have been returned and cancelled. The new debt instruments will reduce the Company's interest expense by approximately $17 million annually and strengthen the balance sheet.
The holders of the Series A and B Notes have agreed to extend up to $60 million of senior secured debt to Coram. The line of credit is subject to the completion of a definitive agreement that is expected within 30 days. "The debt restructuring, combined with the new line of credit, will allow Coram to make a series of strategic acquisitions," Mr. Amaral said. "The first of these acquisitions was HealthQuest, completed at the end of this quarter. HealthQuest is a home infusion company with operations in Wyoming, Idaho, and Montana -- all attractive new markets for Coram." |
