Apria makes no moves

LAKE FOREST, Calif. - Acquisitions still aren't a priority for Apria--but that may change. "It's pretty difficult at this point in time to really get too excited about the acquisition business, because you're really not sure what reimbursement levels will be," CEO Larry Higby told investors during a question-and-answer session following the company's Oct. 26 earnings conference call. "If you're going to do an acquisition, you have to be able to predict a revenue stream and a margin. I think that's going to be clarified by the end of the year, and if that's the case, there are going to be some acquisitions out there that are worth looking at." But don't buy into rumors that Apria may pick up one of its struggling national competitors. "The problem with some of the larger acquisitions is they have a huge debt load, which makes it hard to see how to proceed, whereas some of the small- and medium-sized ones may provide more of an opportunity," Higby said. The slowdown in the HME mergers and acquisitions market has been well documented, with not only Apria but also Lincare, Air Products and other national providers choosing to sit on the sidelines (See HME News July 2006). During the call, Apria announced increased revenues but flat earnings. It posted $19.3 million in net income for the third quarters of both 2005 and 2006. When it came to revenues, Apria reported $382.2 million for the third quarter of 2006 compared to $376.6 million for the same quarter last year. Lincare The Clearwater, Fla.-based Lincare reported $56.2 million in net income for the third quarter of 2006 compared to $53.9 million for the same quarter last year. Revenues were $358 million compared to $320.1 million, a 12% increase. Gentiva The Melville, N.Y.-based Gentiva Health Services reported $286.2 million in net revenues for the third quarter of 2006 compared to $219.6 million for the same quarter last year. Net income was $5.3 million compared to $4.3 million.