Community Psychiatric Posts ’93 Loss : Earnings: Laguna Hills care provider had $24.9-million loss but declares a turnaround. ‘Worst is behind them,’ analyst says.

Community Psychiatric Centers, cleared after an insurance fraud probe in Texas last year, on Tuesday reported a loss for 1993 but declared that a “turnaround is underway.”

The company, whose stock has dropped from a high of $40 a share in 1991 to a low of $9.13 early in 1993--posted progressively better results during the year, however, including earnings of more than $5 million for the latest quarter.

For its fiscal year ended Nov. 30, Community Psychiatric reported a loss of $24.9 million, or 58 cents a share. That contrasted with a profit of $23.1 million, or 52 cents a share, for the previous 12 months. Annual revenue fell to $337.9 million from $347.7 million.

The company, based in Laguna Hills, sold several unprofitable psychiatric hospitals during the year, closed others and eliminated several dozen corporate positions, including six regional vice presidencies. It now operates 51 psychiatric and seven rehabilitation hospitals in the United States and the United Kingdom.

Excluding the costs of those and other changes, the company said, it would have posted an annual profit of $10 million on a 7% increase in revenue.

“The worst is behind them,” said John Hindelong, an analyst at brokerage Donaldson, Lufkin & Jenrette in New York. “The results are better than expected. They reflect the efforts of management over a very difficult period.”

For the fourth quarter, Community Psychiatric said its earnings were $5.4 million, or 13 cents a share, more than four times its profit of $1.2 million, or 3 cents a share, for the same period a year earlier.

The company said the earnings increase resulted from its cost-cutting efforts. Three-month revenue rose only slightly to $87.0 million from $86.9 million.

The report gave the company’s stock a boost in Tuesday’s trading on the New York Stock Exchange. It gained 38 cents a share to close at $17.63.

Analyst Alex Miselson at the brokerage A.T. Brod & Co. in New York said Tuesday that he will recommend Community Psychiatric’s stock.

“This is a good company that has withstood pressure,” he said. “It is not going under, and people still need psychiatric care.”

Until three years ago, when managed care began capping costs on mental health services, Community Psychiatric Centers had enjoyed two solid decades of growth. Today, the company said, it has found ways to prosper despite reduced reimbursements from health insurers. It is offering more outpatient and part-day care, spokeswoman Suzanne Hovdey said.

At the same time, Community Psychiatric has moved into the profitable business of housing and rehabilitating physically ill people who are being released from hospitals--acute long-term care.

Its subsidiary, Transitional Hospitals Corp., opened seven acute long-term facilities in 1993, four of them in the final quarter. The hospitals will become profitable when they begin receiving federal reimbursement for Medicare patients, which lags by six months for new facilities, said Richard L. Conte, chairman and chief executive officer of the parent company.

CPC Ends Year With a Loss

Despite a fourfold increase in fourth-quarter earnings over last year, Community Psychiatric Centers recorded a $25-million loss for fiscal 1993, ending Nov. 30. The company attributed its quarterly performance to cost containment and the sale of unprofitable hospitals. The annual loss reflects an unusual charge to reflect the sales. Amounts in millions, except per-share data:

4TH QUARTER FISCAL YEAR 1992 1993 1992 1993 Revenue $86.9 $87.0 $348.0 $338.0 Net income (loss) 1.2 5.4 23.1 (25.0) Per share (loss) $0.03 $0.13 $0.52 ($0.58)

STOCK CLOSES HIGHER

The company’s stock price during the last 13 months reflects its efforts to shed unprofitable hospitals. It closed Monday at $17.63. Final Friday closing prices:

1993 Jan.: $10.63 Feb.: 10.75 March: 11.50 April: 9.50 May: 9.38 June: 11.50 July: 12.63 Aug.: 11.38 Sept.: 10.38 Oct.: 14.00 Nov.: 12.88 Dec.: 14.00

1994 Jan.: 17.25

Source: Community Psychiatric Centers, Dow Jones; Researched by ANNE MICHAUD and JANICE L. JONES / Los Angeles Times