Advertisement

Unexpectedly Big Write-Offs Take Bite Out of Apria's Profit

March 02, 1997|JAMES S. GRANELLI | TIMES STAFF WRITER

COSTA MESA — Billing errors and legal settlements at Apria Health Group Inc. contributed to unexpectedly high write-offs totaling $76 million and dropped the health care company's annual profit to $33.3 million, the company said Friday.

Apria's earnings, amounting to 64 cents a share, still marked a turnaround from the previous year's loss of $74.5 million, or 58 cents a share. Even after adjusting its revenue figures, the company posted a 9% increase to $1.2 billion last year from $1.1 billion the previous year.

"As a result of the year's modest revenue and operating income growth, performance fell short of our expectations," said Jeremy M. Jones, Apria's chairman.

The charges and write-offs were dumped into the company's final three months, producing a quarterly loss of $29.7 million, or 58 cents a share. The company earned $17.4 million in the previous year's final quarter. Quarterly revenue fell 4% to $273 million from $284 million.

Had the company been able to avoid the charges and write-offs, it would have posted net income of about $19 million for the quarter.

The biggest cost came from billing errors and other systems-related problems that arose during a systemwide conversion. That erased $40 million in revenue. Settlement costs and legal fees for terminating a planned merger with Vitas Healthcare Corp and a pension plan from Abbey Healthcare Group Inc., a predecessor company, amounted to $17 million.

In addition, Apria took hits of $9 million for bad debts and $10 million for inventory adjustments.

The lackluster results didn't affect its stock price. Apria closed at $17.875 a share, up 62.5 cents, in New York Stock Exchange trading.

Advertisement
Los Angeles Times Articles
|
|
|