Homedco Posts 1991 Net Income of $8.8 Million : Profit: Record demand for the Fountain Valley-based company’s home health-care products and services reversed its fortunes in the past year.
Homedco Group Inc., spurred by record demand for its home health-care products and services, reversed its fortunes in the past year to post fiscal 1991 net income of $8.8 million, or 23 cents a share.
The profit for the 12 months ended Sept. 30 comes nearly five months after the Fountain Valley company raised $64 million in its first public stock offering and restructured its debt. Homedco reported a loss of $2.2 million, or 48 cents a share, in its previous fiscal year.
Revenue for fiscal 1991 rose 15% to a record $222.1 million from $193.7 million for the preceding fiscal year.
More than half of the company’s business comes from providing customers--mainly patients recuperating at home rather than in hospitals--with respiratory equipment like oxygen tanks and ventilators. A little more than a fifth of its business comes from providing infusion or intravenous products like food and antibiotic solutions. Homedco also provides other home medical equipment.
Increases in everything from asthma to environmental pollution are causing more incidents of respiratory problems and more need for the company’s products, said Larry Smallen, Homedco’s chief financial officer.
“There’s a growing Medicare population who generally utilize home care products,” Smallen said. “There is also greater pressure to get a patient out of the hospital and into the home. Home is less expensive and more conducive to recuperating.”
Indeed, the biggest factor in Homedco’s results, he said, is the growing population of senior citizens who feel the financial strain of hospital stays and turn to home care. Homedco provides everything except nursing care, Smallen said.
Most of the company’s annual results were based on its performance in the final quarter. Homedco earned $3.5 million, or 27 cents a share, for the three-month period that ended Sept. 30, contrasted with net income of $773,000, or 4 cents a share, for last year’s final fiscal quarter. Quarterly revenue rose 17% to $58.9 million from $50.5 million last year.
Though the annual profit is higher than the fourth-quarter earnings, the annual per-share earnings are lower because the company had to account for the one-time exercise of a warrant for common stock and for dividends on preferred stock. That occurred shortly after the company went public in May and restructured its debt, ridding itself of a higher-interest loan.
The company’s debt stemmed from a 1987 management-led leveraged buyout of National Medical Homecare, an Orange-based subsidiary of National Medical Enterprises Inc. in West Los Angeles. The renamed Homedco moved to Fountain Valley the next year.
Homedco has about 2,700 employees in 118 offices in 35 states, including about 100 workers at its Fountain Valley headquarters.
Homedco Turns Yearly Profit
Homedco Group posted net income of $8.8 million for the fiscal year ended Sept. 30, contrasted with a net loss of $2.2 million a year ago. Revenue increased 15%, to $222.1 million from $193.7 million.
Figures are in thousands, except per-share data.
4th Qtr 4th Qtr 12 Months 12 Months 1991 1990 1991 1990 Revenue $58,853 $50,480 $222,105 $193,668 Net income (loss) 3,456 773 8,762 (2,244) Per share (loss) 0.27 0.04 0.23 (0.48)
Source: Homedco Group Inc.