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Ailing Nursing Home Operator Posts Turnaround in Quarter

June 21, 1989|JOHN CHARLES TIGHE | Times Staff Writer

Care Enterprises, a nursing home operator that filed for bankruptcy court protection last year, reported Tuesday that it earned $273,000 in the first quarter of this year.

The profit is a reversal from a $4.1-million loss in the same period a year earlier. Tustin-based Care Enterprises said revenue in the quarter increased 4% to $66.4 million.

The company, which lost $29 million in 1988 and has lost more than $100 million over the past three years, said its first-quarter performance benefited from cost cutting and new Medicare provisions that provide larger reimbursements and cover more patients.

Care Enterprises said it has reduced administrative expenses by 24% since it filed to reorganize under Chapter 11 of federal bankruptcy law in March, 1988. The company said it has cut corporate staff to 150 workers from 220 and has reduced executive salaries.

Company spokesman Mike Anderson described the earnings report as a significant step toward recovery but said the company still has "a long way to go." Care Enterprises is one of the nation's largest nursing home operators, with 94 facilities across the country.

Also Tuesday, a partnership of Foothill Group, a Los Angeles money management firm, said it has increased its stake in Care Enterprises to more than 16% of the company's voting stock. It previously had an 11.1% interest.

The partnership, which invests in financially distressed firms, said it recently purchased $3 million in unsecured convertible Care Enterprises bonds, and on June 8 bought 15,000 shares of Care stock at 26.5 cents per share.

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