Can Rotech turn itself around?
Orlando, Fla. - Despite plunging revenues, don't count Rotech out just yet, says CEO Phil Carter.
In August, the company reported losses of $433.7 million for the six months ended June 30, 2006, and revenues of $256.3 million.
Net revenues were negatively impacted by a $17.5 million set-aside to cover a slowdown in accounts receivable; a $449 million non-cash impairment charge that was recorded as an operating expense; and Medicare cuts reduced net revenue by $28.5 million.
"Aside from these three charges, our operating results are essentially unchanged," said Carter in an Aug. 9 news release. "We are pleased to report organic growth in our patient and product counts for the sixth consecutive quarter."
Carter said Rotech employees continue to meet the needs of patients. Industry watchers say Rotech still a the chance to reverse its declining fortunes.
"There's every reason to believe that once there's stability brought to the company and some consistency in terms of the earnings achieved--they will bounce back," said healthcare consultant Schuyler Hoss.
Carter, who was brought onboard in 2002, has a reputation in the industry for being a turnaround specialist, say industry watchers, who point to his prior success at Apria.
"He's been applying many of the same cost-cutting measures to Rotech's model," said one insider. "But it's just one thing after another. They can't get a break."