Total Renal to Take $190 Million in 4th-Quarter Charges

Total Renal Care Holdings Inc., one of the largest operators of kidney dialysis centers that has been struggling to turn itself around, on Wednesday said it will take as much as $190 million in fourth-quarter charges as it ends some operations.

It will take a charge of $65 million to $85 million for the sale and closure of all its noncontinental U.S. operations as well as a charge of $25 million to $40 million associated with facility closures. It will take a charge of $55 million to $65 million for uncollected bills.

The Torrance-based company earned $24.6 million, or 30 cents a share, in the year-ago quarter. The charges, more than seven times the year-ago earnings, will put Total Renal Care out of compliance with some of its loans. It will negotiate with its bankers to correct the problem, executives said.

“We have a multitude of challenges that we are tackling as a company. This announcement reflects our continuing progress,” said Kent J. Thiry, chairman and chief executive, in a prepared statement.

Total Renal Care shares fell 32%, dropping $2.31 to close at $4.88 on the New York Stock Exchange. The stock has lost 27% in the last year.

The company replaced its chief executive and its chief financial officer last year after earnings fell short of expectations because of higher costs and lower revenue per treatment at certain offices.

The company expects quarterly earnings before interest, taxes, depreciation and amortization to average $62 million to $68 million during 2000 because of lower revenue per treatment, higher medical-supply and labor costs, and ongoing restructuring expenses. The earnings also will be affected by the exclusion of noncontinental U.S. operations.

Total Renal Care operates more than 500 outpatient-dialysis facilities serving more than 45,000 patients.