Lincare's third-quarter income drops 32%

CLEARWATER, Fla. - Lincare's earnings may be down again, but it believes it's still better off than most other HME providers.

Lincare last week reported net revenues of $392.6 million for the quarter ended Sept. 30, 2009, compared to $405.7 million for the same period last year. Net income was $36 million vs. $53.3 million. It reported net revenues of $1.145 billion for the nine months ended Sept. 30 compared to $1.249 billion for the same period last year. Net income was $95.5 million vs. $171.7 million.

Still, CEO John Byrnes stated in a release: “As our competitors struggle to deal with the severe financial consequences of Medicare price cuts implemented this year, we continue to focus on meeting the needs of our customers in order to improve their quality of life and to help them manage their disease at home while contributing to lower overall healthcare expenditures.”

Lincare's earnings, as well as those of most other providers, were impacted by: a 9.5% cut to Medicare reimbursement for certain product categories, including oxygen, that went into effect Jan. 1, 2009; a 36-month cap on Medicare reimbursement for oxygen that also went into effect Jan. 1, 2009; and reduced Medicare reimbursement for certain respiratory medications.

In all, these reimbursement changes reduced revenues in the quarter ended Sept. 30 and the nine months ended Sept. 30 by about $62.6 million and $213.5 million.

Lincare generated $254.5 million of cash from operating activities during the first nine months of 2009 and invested $84.5 million in net capital expenditures. As of Sept. 30, total debt outstanding was $477 million; cash and investments were $151.3 million; and common shares outstanding were 68 million.