â€˜Our prospects are good,’ says PSA CEO Sansone
NORCROSS, Ga. - Pediatric Services of America (PSA) has had a busy couple of months.
In July, the company opened HME branch offices in San Antonio, Texas, and Chesapeake, Va., to better serve and support its existing pediatric nursing operations. Also in July, PSA eliminated some of its debt when it bought back $1 million of its 10% senior subordinated notes that were due in 2008. (Since Sept. 30, 2001, the company has bought back $11 million of the notes.) In May, PSA, which is slated to generate about $220 million in revenue this year, shaved its expenses by $2 million, half of that through layoffs. The company also recently hired a new vice president of sales and marketing and appointed a new board member.
“This is a good go-forward year for us,” said CEO Joe Sansone, who said to expect more news from the company in late summer or early fall. “We’ve strengthened the company’s balance sheet. The business is strong. Our prospects are good, and we are moving forward cautiously and aggressively.
“It’s not like the wild times we had in the â€˜90s when the whole industry was growing like a weed. Our growth is more measured and strategically planned.”
Indeed, since the late 1990s, PSA has shed about $100 million in annual revenue by selling its medical testing facility and adult nursing business in order to focus on its core pediatric business. The company derives about 25% of its revenue from home respiratory services, most of that in the pediatric arena but a small portion comes from adult respiratory services. The rest of its business consists of daycare centers for medically fragile children, private duty nursing and pharmacy services.
In its financial statement for the third quarter that ended June 30, PSA’s net revenue jumped 10% to $54.1 million from $49.2 million during the same quarter last year. Its third quarter operating income jumped 52% from $1.8 million to $2.8 million.
If it weren’t for a nationwide nursing shortage, PSA’s balance sheet might look even better.
“The nursing shortage hurts us in two ways,” Sansone said. “We can’t find nurses to cover some of the shifts we get approval for, and those we do find are more expensive and our costs go way up.” HME