Vitas to issue 3.8 million shares of common stock
First public sale of hospice stock coming soon
Vitas Healthcare Corporation, a privately owned hospice chain based in Miami with operations in seven states, has filed with the U.S. Securities & Exchange Commission (SEC) to sell 3.8 million shares of common stock to the public. This filing was executed Sept. 23. The proposed offering price per share is $14 to $16, and the company has also applied to be listed on the Nasdaq National Market under the symbol VTAS.
A 600-page document filed with the SEC, which is obtainable on the World Wide Web, describes the company which is incorporated in the state of Delaware its recent corporate actions, and future strategy.
Vitas served 31,000 patients in fiscal year 1996 and carries a total average daily census of 4,500 patients in 21 hospice programs in seven states. The company’s net revenues, 94% from Medicare and Medicaid reimbursement, rose from $102 million in 1992 to $214 million in 1996. It posted net losses of $1 million in 1997 although the two most recent quarters were profitable.
In recent years, according to Vitas’ SEC filling, its operations "have undergone significant changes which have negatively affected its financial performance but which, management believes, have resulted in an improved business model and positioned the company for future growth and profitability." Among these changes are a 1995 restructuring aimed at creating a uniform structure in each local hospice and smaller patient care teams, reversing a previous policy of diversification and large multifunctional service teams incorporating non-hospice services.
In June 1996, Vitas attempted a merger with Apria Healthcare Corp., in Costa Mesa, CA, which was terminated that November. During this period, "the company experienced significant disruptions as a result of the anticipated combination of the operations as well as delaying implementation of restructuring."
Vitas’ current plans for growth are based on leveraging its operating model, including its proprietary information, telecommunications system, new acquisitions, and greater demand for hospice services, "to the extent that such services become increasingly accepted as a means of caring for terminally ill patients."
[Vitas’ SEC stock filing can be obtained through a stockbroker or from: http://www.sec.gov/ Archives/edgar/data/1045996/0000912057-97-031448.txt.]
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