AHP Struggles Continue with Losses for Q4, Year

BRENTWOOD, Tenn. — On Thursday, American HomePatient
reported losses for the fourth quarter and the year.

Revenues for the quarter ended Dec. 31 were $61.3 million
compared to $67.8 million for the fourth quarter of 2008, a 9.6
percent decrease. Revenues for the year were $236.3 million
compared to $266.9 million in 2008, an 11.5 percent drop.

The giant provider, which operates in 33 states, blamed Medicare
reimbursement cuts that took effect in January 2009 for the losses.
The company said further revenue reductions resulted from policy
changes related to coverage for PAP devices, a change in inhalation
drug product mix and its reduced emphasis on less profitable
product lines such as non-respiratory DME and infusion therapy.

Operating expenses declined in the fourth quarter by
approximately $1.6 million, or 4.9 percent, and for the year by $8
million, or 6 percent. These decreases, the company said, were
primarily the result of improved efficiencies including
centralization of branch functions, consolidation of branches,
improved routing and delivery systems and more effective
utilization of leased space.

In February, the company entered into an eighth
forbearance agreement with NexBank SSB on $226.4 million in
debt that was due to be repaid Aug. 1, 2009. The latest agreement
expires March 16.

AHP said it is making monthly interest payments on the debt and
continues to work with lenders toward a resolution. “However, there
can be no assurance a resolution will be reached with favorable
terms to the company and its stockholders or at all,” the company
said.