Bankruptcy court OKs AHPs reorganization plan
May 19, 2003
BRENTWOOD, Tenn. - A U.S. Bankruptcy Court confirmed last week American HomePatient’s plan to reorganize under Chapter 11.
The confirmed plan allows the company to continue its business operations uninterrupted, led by its current management team, and accomplishes the company's primary goal of restructuring its long term debt obligations to its secured lenders.
In addition, the confirmed plan provides that the company's shareholders retain their equity interest in the company, and all of the company's creditors and vendors will be paid 100% of all amounts they are owed, either immediately or over time with interest.
The confirmed plan was proposed jointly by the company and the Unsecured Creditors Committee but was objected to by the company's secured lenders. In the decision, the court overruled all of the secured lenders' objections to confirmation of the plan. The secured lenders may appeal the Court's decision.
In other news, AHP recorded net income of $4.3 million and revenues of $82.5 million for the quarter that ended March 31.
The company's net income in the first quarter compares to a net loss of $66.9 million in the 2002 first quarter. The net loss for the first quarter of 2002 included a $68.5 million charge for the cumulative effect of a change in accounting principle associated with the company's adoption of Statement of Financial Accounting Standards No. 142 ("Goodwill and Other Intangible Assets"), an income tax benefit of $2 million, and a gain on the sale of the assets of an infusion center of $0.7 million.
Excluding these items, American HomePatient's income increased in the first quarter of 2003 compared to the first quarter of 2002 primarily due
to increased same-location revenues and lower bad debt expense.
The Company's revenues for the 2003 first quarter of $82.5 million represent an increase of $2.7 million over the same quarter of 2002.