Second-Quarter Net Fell 95% to $50,000, Care Enterprises Says

Still struggling under a mountain of debt resulting from its rapid expansion, Care Enterprises said that net earnings during the second quarter fell 95% to $50,000 from $953,000 despite slightly higher sales for the period. Revenues of $65.2 million were up 7.1% from $60.9 million.

Laguna Hills-based Care, the fourth largest nursing home operator in the United States, said that net earnings during the six months fell to $314,000, down 79% from $1.5 million. First-half revenues climbed 20% to $129.3 million from $107.5 million.

Company officials said the decline in earnings resulted from the cost of servicing the debt run up during Care’s 1985 expansion binge. Additional pressure on earnings came from increased spending on employee benefits, insurance and marketing, combined with lower nursing home occupancy in some areas.

In July, Care raised approximately $13 million through a public stock offering, proceeds of which were applied to the company’s $194 million in long-term debt. During the quarter, Care sold a facility in northern California and laid off about a dozen employees, according to Derwin Williams, chief financial officer, who predicted improved earnings for the balance of 1986.