Provider Giants Report 2004 Earnings

Lake Forest, Calif., and Clearwater, Fla.

According to earnings reports released by two of the HME industry’s largest providers, both Apria Healthcare and Lincare Holdings saw revenue growth and substantial acquisition activity last year — but also felt the effects of Medicare respiratory drug cuts to 80 percent of AWP (Average Wholesale Price).

Apria, Lake Forest, Calif., ended the year with $1.45 billion in revenue, a 5.1 percent increase from 2003 revenues of $1.38 billion. The company’s net income fell by $2 million, to $114 million. According to a company statement, earnings were affected by respiratory medication cuts, which cost the company $15.2 million for the year.

Meanwhile, Lincare, Clearwater, Fla., reported 2004 net income at $273.4 million, compared to $232.1 million for the prior year — a 16 percent increase. Revenue now stands at $1.27 billion, an 11 percent increase. The drop in respiratory drug pricing last year, however, reduced the year’s revenues by $14.3 million, the company said.

While Apria acquired 27 companies worth more than $148.7 million last year, Lincare acquired 26 companies with annual revenues of $49 million. Both companies “have the money and the wherewithal and the need to buy more than others,” said Bob Leonard, managing director at Pittsburgh-based merger and acquisition firm The Braff Group. “They’re truly national in scope and well-capitalized.”