Care Enterprises, a Tustin-based nursing home operator that filed for bankruptcy last year, reported Tuesday that it earned $273,000 in the first quarter.
The profit contrasts with a $4.1-million loss in the same quarter a year ago. Care said revenue in the quarter increased 4% to $66.4 million, compared to $63.8 million in the year-earlier period.
The company, which lost $29 million in 1988 and has lost more than $100 million over the last three years, said its first-quarter performance benefited from cost cuts and from new Medicare provisions for bigger reimbursements and coverage for more patients.
Care said it has reduced administrative expenses by 24% since it filed for Chapter 11 bankruptcy protection from creditors in March, 1988. The company said it has cut its corporate staff to 150 from 220 workers 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." With 94 homes across the country, Care is one of the nation's largest nursing home operators.
In a business plan filed last year, the company projected that earnings would exceed $1 million in the 1989 first quarter. Anderson said Care fell short of the goal because payments from Medicaid and state Medi-Cal programs have remained below expectations.
Also Tuesday, a partnership of the Foothill Group said it has increased its ownership in Care and now controls more than 16% of the company's voting stock.
The partnership, a Los Angeles money-management firm that invests in financially distressed companies, said it recently purchased $3 million in unsecured convertible Care bonds, and on June 8 bought 15,000 shares of Care stock at 26.5 cents per share.
Foothill Vice President Dennis Asher said the partnership may increase its ownership, but he said it is not seeking a position on the board of a Care creditors' committee.