Home Health & Hospice Week

Profits not so rosy.

Double-digit increases to revenues appeared to be the norm for major home medical equipment companies in the second quarter of 2003.

Lake Forest, CA-based behemoth Apria Healthcare Group Inc. saw a 10 percent jump in revenues to $343.3 million for the quarter ended June 30 compared to the previous year's quarter. Net income for the quarter increased a similar 12 percent over last year, to $29.4 million.

Apria touted its 12 acquisitions at a purchase price of $44.6 million in the first half of 2003. The respiratory, infusion and HME company with 415 branches in 50 states also stressed its commitment to internal growth.

Clearwater, FL-based Lincare Holdings Inc. saw an impressive 21 percent boost to its earnings for the quarter, to $283.1 million. And its net earnings shot up 22 percent to $56.8 million.

Lincare has purchased eight companies in the last six months with annual revenues of $78 million, the primarily respiratory and oxygen company says. It added 38 centers in the second quarter alone - 24 through four acquisitions and 14 through internal growth. That brings Lincare's total locations to 700 in 47 states.

Orlando, FL-based Rotech Healthcare Inc. racked up $145.7 million in sales for the quarter, a 6 percent increase over 2002 levels. But it recorded a $6.5 million loss, compared to a $7.4 million profit a year ago.

Rotech's increased focus on oxygen and nebulizer medications resulted in respiratory therapy equipment and services making up 83.7 percent of the company's total revenues for the quarter, compared to 78 percent in the year-ago quarter. At the same time, HME sales fell from 20 percent to 15 percent of revenues in the same time period.

Rotech's days' sales outstanding was 57 days for the quarter, says the company with 500 locations in 48 states, mostly in non-urban areas.

Finally, Elyria, OH-based Invacare Corp. saw its overall sales increase 10 percent to $300.1 million in the quarter. But its profits fell to $15.4 million from $16.1 million for the same period last year. In North America, Invacare's sales grew 5 percent to $213 million.

North American sales of respiratory products grew an astonishing 41 percent over last year's quarter, while sales of rehab products grew 15 percent, the company says.