Comprehensive Care Reports Profit After Years of Losses

After a succession of financially treacherous years during which auditors questioned whether Comprehensive Care Corp. could stay in business, the company said Tuesday that it earned money in the fiscal second quarter.

“It’s a happy day for CompCare, after . . . years of horrible losses and a lot of effort to make big changes,” said Chriss W. Street, chairman and chief executive.

The company had a profit of $718,000, or 27 cents per share, in the three months ended Nov. 30, compared with a loss of $2.5 million, or $1.18 per share, in the same period a year earlier. Revenue rose to $7.6 million from $7.3 million.

Last year, with the company facing $9.5 million in overdue debt, auditors reported a “substantial doubt that the company can continue as a going concern.” The company had posted losses of more than $50 million over the previous five years.

Comprehensive Care, which provides mental health programs and refers patients to a network of doctors, hospitals and allied professionals, fell on hard times after it began buying psychiatric and substance abuse hospitals across the United States, Street said. The company bought or built 33 hospitals, most of which it has since sold.

“We’re quickly exiting that business and rapidly growing on the managed care business,” he said, adding that the company closed two hospitals during the second quarter. It is in the process of selling three other hospitals and has almost quadrupled the number of people on managed care contracts, he said.

For the fiscal first half, the company narrowed its losses to $590,000, or 22 cents a share, from $5 million, or $2.28 a share, a year ago. Revenue rose to $16.4 million from $15.4 million.