Phoenix Healthcare Corporation Reports First Quarter Results
DALLAS, May 14 /PRNewswire/ -- Phoenix Healthcare Corporation -- (OTC Bulletin Board: PHHC) ("Phoenix") today announced the operating results of its first fiscal quarter ended March 31, 1999. For the quarter ended March 31, 1999, Phoenix reported a net loss from continuing operations of $2,389,450 or ($.12) per share compared to a net loss from continuing operations for the first quarter of the prior year of $296,427 or ($.02) per share.
Operating revenue reported by Phoenix for the quarter ended March 31, 1999 totaled $5,955,872 compared to $8,198,081 for the prior year quarter, representing a decrease of $2,242,209 or 27%. Reduced revenue reported during the first quarter results principally from the Company having closed certain ancillary operations during 1998.
At March 31, 1999 the Company reports total assets of $17,131,140 representing an increase of $5,150,228 or 43% from December 31, 1998. This increase in assets is largely attributed to the Company's acquisition of Trinity Rehab, Inc. ("Trinity") during the first quarter.
Commenting on the first quarter fiscal 1999 results, Ron Lusk, Chairman and Chief Executive Officer stated: "The losses associated with Trinity are attributable to restructuring and non-recurring charges, operating and severance payment costs, and a non-recurring $390,212 bad debt expense attributed to a multi-facility customer filing bankruptcy. This write-off is subject to re-capture by the Company depending on the bankruptcy proceeding."
Oasis Healthcare, the Company's long-term care and assisted living division reported net revenues of $4.57 million for the quarter versus $4.59 million in the same quarter of the prior year. The Oasis management team went through extensive training in 1998 in preparation for the Prospective Payment System (PPS) under Medicare. In addition to engaging an outside consultant, the Company purchased a software package allowing timely MDS (Minimum Data Set) input resulting in the highest potential RUG (Resource Utilization Group) category for reimbursement. The system permits effective tracking and data management. PPS is an ongoing learning process and continuous improvement is expected.
Mr. Lusk stated, "While external pressures and changes in reimbursement due to the Balanced Budget Act of 1997, including the transition to PPS will continue to present challenges to our industry, we continue to focus on reducing costs and improving operating efficiencies, especially in Trinity where in response to the reported performance the Company eliminated certain management positions, changed the pay structure of its therapists from salary to hourly based on efficiency and productivity, terminated several rural contracts, closed administrative offices and instituted a number of other cost saving initiatives."
Mr. Lusk continued, "We have been successful in reducing levels of our corporate overhead and general administrative costs. Going forward, additional reductions in operating costs will be realized through more efficient delivery of rehabilitation therapy services and reduction in non- salary costs. During the remainder of 1999, the Company will endeavor to secure new sources of working capital and focus efforts to further develop the businesses we operate. We do not, however, wish to minimize the significant challenge faced by the Company in addressing its significant liquidity constraints and outstanding obligations to its creditors."
Overview Of Events During And Subsequent To The Quarter
-- In February, the Company completed its acquisition of Trinity Rehab,
Inc., a provider of rehabilitation therapy services to long-term care
centers in Texas and Oklahoma.
-- Significant progress was made during the first quarter to resolve
certain material legal matters, which have pre-occupied the Company
during fiscal 1998 and to date. Management will continue its efforts
during the second quarter to resolve remaining legal issues.
-- On April 7, 1999, the Company acquired all of the capital stock of
Southland Medical Supplies, Inc. ("Southland"), a medical supply
company based in Knoxville, Tennessee. Southland provides medical
supplies to healthcare providers including hospitals, long-term care
facilities as well as to home care customers in sixteen states
-- In February, the Company entered into a $1.0 million line of credit
with Match, Inc. for working capital requirements to settle certain
claims, and for general corporate purposes. On April 29th, the Board
of Directors authorized the Company to amend the line of credit from
$1,000,000 to $2,000.000. The Company anticipates utilizing this
available credit to support continuing working capital requirements and
in settling its creditor obligations.
-- At the annual shareholder's meeting held on April 29, 1999 shareholders
approved all proposals including the change in the Company's name to
Phoenix Healthcare Corporation.
Phoenix Healthcare Corporation, owns, leases, or manages seven long-term care facilities and two assisted living facilities in the New England region and also provides rehabilitation therapy services through Trinity Rehab, Inc. its wholly owned subsidiary. The Company also operates Southland Medical Supply, Inc. which provides medical supplies to hospitals, nursing homes and assisted living facilities in 16 states.
Certain of the matters discussed in this press release contain forward-looking statements that involve risk and uncertainties. Although Phoenix believes that its expectations are based on reasonable assumptions, it can give no assurance that anticipated results will occur.
SOURCE Phoenix Healthcare Corporation
/CONTACT: Robert Woodson III, President and Chief Operating Office of
Phoenix Healthcare Corporation, 214-599-9777/
(PHHC) |
