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Care Enterprises Reports $296,000 Net for 2nd Quarter

August 11, 1987

Crediting aggressive marketing and continuing cost cutting, Care Enterprises reported that second-quarter operating profit jumped to $296,000, almost eight times the $38,000 reported a year ago.

The Laguna Hills-based nursing home operator said revenues for the period ended June 30 were $65.8 million, less than 1% above the $65.2 million posted last year. When the gains from the sales of some Care nursing homes are included in the quarterly results, profit in the 1987 period totaled $1.5 million, compared with $50,000 a year ago.

Chairman Lee R. Bangerter said he was pleased with the results, particularly because the improved performance comes at a time of increasing competition and higher nursing expenses.

"Our marketing program has enabled us to increase the number of private patients and maintain our occupancy rates. In addition, we are continuing to reap the savings from our cost-containment and debt-restructuring programs announced last year," he said in a statement.

For the first six months of the year, Care had operating profit of $534,000, compared with a loss of $152,000 the year before. Including the gains from nursing home sales, the 1987 first-half profit was $1.6 million, compared with a profit of $314,000 the year before.

Revenues for the first half of 1987 were $130.2 million, less than 1% higher than the $129.4 million in the prior year.

Bangerter said the company continues to negotiate the extension of payments on its bank debt and hopes to arrange a refinancing of that debt, which totals about $175 million. The high debt load and the resulting high interest payments had been a major factor in the company's losses last year and its decision to abandon its aggressive expansion program.

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