Apria bullish on success under bid program

LAKE FOREST, Calif. - Execs at Apria Healthcare revealed during an earnings call March 11 that the company was offered “a significant number of contracts” for Round 2 of competitive bidding.

CEO John Figueroa said that, like in Round 1, Apria was offered contracts in oxygen, CPAP, enteral nutrition and a few “non-core” products. For Round 2, it was also offered contracts for negative pressure wound therapy.

“We are pleased with the outcome despite the average 45% cut that emerged—a cut caused not by our bid prices but by some of the shortcomings of the bidding rules themselves,” he said. “Although the cuts are tough to absorb, we believe our strategic plans, operational efficiencies and branch footprint will enable us to serve the bid markets very well.”

CMS plans to release a list of the contract suppliers for Round 2 some time this spring.

HME vs. home infusion

During the call, Apria execs noted that the growth of the company's home infusion division continues to outpace the RT/HME division. For the fourth quarter, Apria reported $310.1 million in revenues for RT/HME (a 1.4% decline from the same period in 2011) vs. $314.3 million for home infusion (an 8.8% increase).

For the year, Apria reported $1.21 billion in net revenues for RT/HME (a 3.5% increase over 2011) vs. $1.22 billion for home infusion (an 8.3% increase).

“Good solid growth for (home infusion) continues,” said Peter Reynolds, principal financial officer.

Overall performance

For the fourth quarter, Apria reported net revenues of $624.4 million in 2012 compared to $603.4 million in 2011, an increase of 3.5%. Net losses were $52.4 million vs. $712.2 million, including a non-cash impairment charge related to the company's trade name and the associated tax impact.

For the year, Apria reported net revenues of $2.44 billion in 2012 compared to $2.3 billion in 2011, a 5.9% increase. Net losses were $260.4 million vs. $747.3 million, including a non-cash impairment charge related to the company's trade name and the associated tax impact.

Management shake-up

Apria execs also reviewed management changes at the company that put Figueroa in the CEO and chairman seat, as well as CEO of the home infusion division, in November. Reynolds took over as principal financial officer in January, replacing Chris Karkenny, former executive vice president and CFO.

“We undertook (these) management changes as part of our ongoing effects to reduce overhead and to better align management within our two business segments,” Figueroa said.