LAKE FOREST, Calif., April 22 /PRNewswire-FirstCall/ -- Apria Healthcare Group Inc. , the nation's leading home healthcare company, today announced revenues for the quarter ended March 31, 2004, of $350.9 million, a 5% increase compared to revenues of $335.1 million for the first quarter of 2003. Net income for the quarter was $27.8 million or $.55 per share (diluted) compared to $27.8 million or $.50 per share for the first quarter of 2003. Revenue growth in the quarter was reduced by approximately $9 million or 3% due to the Medicare respiratory medication reimbursement cuts and the Company's decision not to renew the Gentiva CareCentrix Inc. business. Gross profit margins of 71.8% reflect a reduction of 0.3% as a result of Medicare reimbursement changes.
Earnings before interest, taxes, depreciation and amortization (EBITDA) was $85.9 million for the first quarter of 2004 compared to $81.4 million for the first quarter of 2003. Days sales outstanding (DSO) were 53 days for the first quarter, unchanged from the prior year quarter. During the quarter, the Company also repurchased $50 million of its common stock.
"We are pleased with our 2004 first quarter results," said Lawrence M. Higby, Apria's Chief Executive Officer. "Our consistently strong operating performance and free cash flow supports and reinforces our strategy to pursue growth, both internally and through acquisitions. During the quarter, we partially offset the impact of the Medicare respiratory cuts and the reduction of the Gentiva CareCentrix Inc. business with strong revenue growth of 8% and continued lower costs as a result of our productivity initiatives. Selling, distribution and administrative costs were reduced to 53.4% of sales, a 0.6% improvement from the prior year quarter."
"During the first quarter of 2004, we continued our momentum in acquiring home health businesses. We purchased seven businesses for approximately $42 million, increasing our penetration in the Southeast and Texas markets in which we already operate. We also expanded our capabilities to distribute diabetic supplies with the acquisition of Star Medical Rx, located in Kansas City. Our acquisitions pipeline is full and we now expect that we will exceed our target of $100 million in acquisitions this year. In addition, our internal efforts to focus on Medicare referral sources and improve our service levels have resulted in increasing our growth in the respiratory business."
"For the rest of 2004, we expect that our productivity improvements will continue and we are increasing our efforts to expand our respiratory business. Because of our accelerated acquisition activity, we now expect 2004 revenues to increase in the 6 to 7 percent range and earnings per share to increase in the 7 to 9 percent range despite the Medicare cuts."
Apria provides home respiratory therapy, home infusion therapy and home medical equipment through approximately 435 branches serving patients in 50 states. With nearly $1.4 billion in annual revenues, it is the nation's leading homecare company.
This release may contain statements regarding anticipated future developments that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Results may differ materially as a result of the risk factors included in the Company's filings with the Securities and Exchange Commission and other factors over which the Company has no control.
For further information, please contact Lawrence M. Higby, Chief Executive Officer, +1-949-639-4960, or Amin I Khalifa, Chief Financial Officer, +1-949-639-4990, both of Apria Healthcare Group Inc.
APRIA HEALTHCARE GROUP INC. CONDENSED CONSOLIDATED BALANCE SHEETS March 31, December 31, (dollars in thousands) 2004 2003 (unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $105,297 $160,553 Accounts receivable, net of allowance for doubtful accounts 204,851 196,413 Inventories, net 30,997 29,089 Other current assets 43,677 43,280 TOTAL CURRENT ASSETS 384,822 429,335 PATIENT SERVICE EQUIPMENT, NET 212,081 209,551 PROPERTY, EQUIPMENT & IMPROVEMENTS, NET 50,621 50,192 OTHER ASSETS, NET 390,015 354,357 TOTAL ASSETS $1,037,539 $1,043,435 LIABILITIES & STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and accrued liabilities $166,683 $158,574 Current portion of long-term debt 31,354 31,522 TOTAL CURRENT LIABILITIES 198,037 190,096 LONG-TERM DEBT, net of current portion 462,069 469,241 OTHER NON-CURRENT LIABILITIES 24,543 18,150 TOTAL LIABILITIES 684,649 677,487 STOCKHOLDERS' EQUITY 352,890 365,948 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,037,539 $1,043,435 APRIA HEALTHCARE GROUP INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) Three Months Ended March 31, (dollars in thousands, except per share data) 2004 2003 Respiratory therapy $242,386 $224,214 Infusion therapy 58,688 58,803 Home medical equipment/other 49,807 52,052 NET REVENUES 350,881 335,069 GROSS PROFIT 251,960 242,908 Provision for doubtful accounts 13,469 12,801 Selling, distribution and administrative expenses 187,340 180,972 Amortization of intangible assets 1,276 696 OPERATING INCOME 49,875 48,439 Interest expense, net 4,955 3,481 INCOME BEFORE TAXES 44,920 44,958 Income tax expense 17,073 17,132 NET INCOME $27,847 $27,826 Income per common share -- assuming dilution $0.55 $0.50 Weighted average number of common shares outstanding 50,841 55,392 Reconciliation -- EBITDA: Reported net income $27,847 $27,826 Add back: Interest expense, net 4,955 3,481 Add back: Income tax expense 17,073 17,132 Add back: Depreciation 34,748 32,252 Add back: Amortization of intangible assets 1,276 696 Adjusted EBITDA $85,899 $81,387 APRIA HEALTHCARE GROUP INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) Three Months Ended March 31, (dollars in thousands) 2004 2003 OPERATING ACTIVITIES Net income $27,847 $27,826 Items included in net income not requiring cash: Provision for doubtful accounts 13,469 12,801 Depreciation and amortization 36,024 32,948 Deferred income taxes and other 7,602 8,208 Changes in operating assets and liabilities, exclusive of effects of acquisitions (19,197) (23,253) NET CASH PROVIDED BY OPERATING ACTIVITIES 65,745 58,530 INVESTING ACTIVITIES Purchases of patient service equipment and property, equipment and improvements, exclusive of effects of acquisitions (32,405) (38,521) Proceeds from disposition of assets 39 201 Cash paid for acquisitions, including payments of deferred consideration (34,601) (23,107) NET CASH USED IN INVESTING ACTIVITIES (66,967) (61,427) FINANCING ACTIVITIES Net payments on debt (8,862) (590) Capitalized debt issuance costs (37) -- Outstanding checks included in accounts payable (4,916) (3,350) (Repurchases) issuances of common stock, net (40,219) 100 NET CASH USED IN FINANCING ACTIVITIES (54,034) (3,840) NET DECREASE IN CASH AND CASH EQUIVALENTS (55,256) (6,737) Cash and cash equivalents at beginning of year 160,553 26,383 CASH AND CASH EQUIVALENTS AT END OF PERIOD $105,297 $19,646
Apria Healthcare Group Inc.CONTACT: Lawrence M. Higby, Chief Executive Officer, +1-949-639-4960, orAmin I Khalifa, Chief Financial Officer, +1-949-639-4990, both of ApriaHealthcare Group Inc.
