Quarterly revenue up 101% at Integrated Health


Integrated Health Services Inc. churned out record revenues of $278.4 million in the second quarter, up 101 percent from a year ago, as it converted more health care beds to ones that are reimbursed by the government at a higher rate.

The low-cost provider of health care services earned $13.9 million before extraordinary items, up 104 percent from a year ago. Earnings per share before extraordinary items were up 35 percent, to 54 cents a share.

This is the 18th consecutive quarter that the Owings Mills-based company has chalked up record revenues and earnings, officials said.

Despite its robust earnings, IHS's stock closed yesterday at $32 a share, down 87.5 cents.

"IHS continues to achieve strong earnings growth," said Dr. Robert Elkins, chairman and chief executive. "We are finding that the managed care industry -- which we view as a large growth opportunity -- is highly receptive to our subacute and specialty programs."

Dr. Elkins said the company would "continue our strategy of building full post-acute care systems, which include subacute care, inpatient and outpatient rehabilitation, pharmacies, home health care and diagnostic services."

For the first six months of the year, revenues jumped 101 percent to $543.8 million, and earnings before extraordinary items increased 109 percent to $27.6 million.

The company said revenues from higher-margin specialty medical services increased 142 percent to $180 million. Specialty medical services revenue now represent 65 percent of total company revenue.

"I thought revenues were excellent," said Anthony V. Vendetti, a health care services analyst with Ladenburg, Thalmann & Co., a New York brokerage and investment banking firm.

Mr. Vendetti believes the company is a good buy with its stock trading at 1.5 times book value. He said the stock of industry competitors trades on average at 2.1 times book value.

In April Integrated Health completed a long-term management contract, with purchase options, with Preferred Care Inc. to operate 34 facilities and 3,958 beds in several cities.

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