National Medical Enterprises Reports a $54.2-Million Loss

Santa Monica-based National Medical Enterprises reported a loss of $54.2 million in the fourth quarter before extraordinary charges, contrasted with a profit of $79.1 million in the same period a year before.

The company attributed the poor performance, which was expected, in part to the costs of divesting hospitals in its troubled psychiatric hospital division, where the company has been burdened with the legal costs of fighting charges of insurance fraud in Texas.

NME took a pretax charge of $189 million in the quarter to cover those expenses. The company lost 32 cents per share on both a primary and fully diluted basis before extraordinary charges of 14 cents in the quarter.

NME Chief Executive Richard Eamer said in a release that the psychiatric division returned to profitability in the fourth quarter, following a loss in third quarter, despite a revenue drop of 32%. He said the chain’s general hospital division performed well, with operating profit rising 18%. Operating profit at NME’s rehabilitation hospital division also rose sharply, registering a 31% gain for the quarter.