Rotech Improves Profitability in Q1

ORLANDO, Fla.—As of
March 31, revenue-generating patients in Rotech’s core
product lines of oxygen and CPAP grew 13.6 percent in this
year’s first quarter compared to the first quarter of 2010,
the company announced May 6.

According to the
provider’s Q1 financials, adjusted EBITDA for the three
months increased 13 percent to $28.3 million from $25.2 million for
the same period last year. Its ratio of net debt to last 12
months’ adjusted EBITDA decreased to 4 times compared to 4.8
times at March 31, 2010.

The Florida-based
provider, which operates about 425 locations in 48 states, also
completed a refinancing of former senior subordinated notes due
2012 with the issuance of $290 million in aggregate principal
amount of senior second lien notes. Along with an October 2010
offering of $230 million in senior secured notes to refinance its
former payment-in-kind term loan facility, “we have now
addressed our short-term debt maturities until 2015 and
2018,” the company reported.

“In comparing first
quarter of 2011 with that of 2010, we are pleased to report
improvement in profitability with increases in gross profit and
adjusted EBITDA percentages, as well as reductions in SG&A
percentage,” said Rotech President and CEO Philip Carter.
“This was in spite of a $3.7 million decline in Medicare
reimbursements and other non-patient service
revenue.”