2 Health Care Firms Report Strong Quarterly Earnings

Care Enterprises Inc. and Regency Health Services, two Orange County-based health care providers, on Tuesday reported strong quarterly earnings growth.

Care Enterprises, a Tustin-based provider of inpatient and home-based health care, said its first-quarter net income grew by 141% to $996,000, up from $414,000 a year ago. Care Enterprises linked its growth to ongoing development of specialized clinical services at its nursing and rehabilitation centers.

First-quarter revenue was nearly flat at $47.7 million, compared to $47.9 million a year ago. Care Enterprises posted healthy revenue gains in its nursing, rehabilitation and home-health operations, but those gains were wiped out by a $5.2-million revenue decrease driven by the sale last year of a 300-bed nursing home in San Diego and the transfer of a pharmacy operation with five locations to a partnership in which the company holds an equity position.

Care Enterprises operates 51 nursing and rehabilitation centers in California, New Mexico, Ohio and West Virginia.

Care Enterprises executives said they don’t believe that national health care reform will have an immediate impact on their business. “The cost of getting 36 million uninsured people insured is a big enough chunk . . . so that long-term care (changes) will be put on the back burner for a while,” said Richard K. Matros, Care Enterprises president and chief operating officer.

“Direct actions imposed on doctors, hospitals and drug companies will prompt some indirect changes on our business,” Matros said. “But as far as a long-term impact on us, as a provider of institutional and home-health care . . . there will be good opportunities.”

Similarly, Newport Beach-based Regency expects to benefit from national health care reforms, said Regency Chief Financial Officer Jim Wodach.

“We operate subacute facilities and we take care of medically complex patients on a more cost-effective basis than acute-care facilities,” Wodach said. “From everything we hear, we feel we’ll be a beneficiary for that reason--changes will benefit companies that understand how to provide good care at a good cost.”

Regency reported record profit and revenue for its third quarter ended March 31.

Regency said its net income rose by 79% to $1.4 million, up from $798,000 a year ago. Revenue rose by 21% to $29.4 million, up from $24.3 million. Net income for the nine-month period rose by 104% to $4 million. Revenue grew by 51% to $84 million.

Newport Beach-based Regency operates 35 health care facilities in California that provide nursing services for the elderly and mentally disordered and developmentally disabled people. Regency closed up 25 cents at $8.625 on Tuesday in NASDAQ trading. Care Enterprises closed up 25 cents at $4.25 in American Stock Exchange trading.

Care Enterprises Doubles Earnings Continued development of specialized clinical services at existing nursing and rehabilitation centers prompted firs-quarter net income to grow during the quarter ended March 31. Figures in thousands of dollars, except per-share data:

1993 1992 Percent change Total revenue $47,748 $47,933 -0.4 Net earnings 996 414 141 Earnings per share 0.08 0.04 100

Source: Care Enterprises Inc.

Regency Health Services’ Income Up In the third quarter ended March 31, Regency Health Services Inc. reported record net income and revenue. The company linked improvements to an improved patient mix and an emphasis on higher m1634887529

3rd qtr 3rd qtr 9 months 9 months 1993 1992 1993 1992 Revenue $29,403 $24,291 $83,953 $55,709 Net income (loss) 1,427 798 4,016 1,968 Per share (loss) 0.21 0.20 0.59 0.59

Source: Regency Health Services Inc.