AHP continues slide

BRENTWOOD, Tenn. - American HomePatient (AHP) last week reported $57.7 million in revenues for the second quarter of 2009 compared to $64.2 million for the same period last year, a 10.1% drop. Net losses were $4 million this year vs. $2.1 million last year.



For the six months ended June 30, revenues were $116 million this year vs. $133.4 million last year and net losses were $9.2 million this year vs. $1.6 million last year.



Medicare reimbursement cuts for oxygen and other product lines that went into effect Jan. 1 reduced revenue by $6.9 million for the second quarter and $14.1 million for the six months ended June 30. AHP also blames the drop in revenues on the company's reduced emphasis on less profitable product lines like non-respiratory durable medical equipment and infusion therapy.



A Medicare reimbursement cut for inhalation drugs that went into effect April 1, 2009, reduced revenue by another $3 million for the six months ended June 30. This drop in revenues, however, was partially offset by revenue growth in oxygen and sleep therapy, core product lines.



The silver lining in AHP's earnings report: The company stated that it has entered into a forbearance agreement with NexBank and a majority of secured debt holders for $226.4 million in debt that was due to be repaid Aug. 1. As part of the agreement, debt holders have agreed not to take action before Sept. 1. In the interim, the company and debt holders are trying to “resolve the issue.”



“There can be no assurance that these discussions will result in a resolution with favorable terms to the company and its stockholders or at all,” AHP stated.