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Apria chairman quits
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April 29, 1998: 7:08 p.m. ET
Argyros said to have planned taking firm private; company posts 1Q loss
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NEW YORK (CNNfn) - Apria Healthcare Group Inc.'s chairman resigned Wednesday amid rumors he is leading an attempt to take the company private. The company also posted a loss for the first quarter against a profit in the year-ago period, citing sharply lower revenue.
Chairman George Argyros also resigned from a three-person committee formed last month to assess the respiratory therapy company's future course.
The company appointed Ralph Whitworth as chairman and named Terry Hartshorn to replace Argyros on the special committee. Whitworth is managing director of Relational Investors LLC, Apria's largest institutional shareholder. Hartshorn, an Apria director since 1991, is chairman of PacifiCare Health Systems.
In documents submitted to the Securities and Exchange Commission in late April, Argyros indicated he intended to explore several strategic alternatives. According to the filing, those could include a management shakeup in which Argyros would be involved. However, his role was not clearly defined.
Argyros holds 2.7 million shares, or 5.4 percent, of the company's outstanding stock.
In early April, the Costa Mesa, Calif.-based company unveiled plans to replace most of its board as part of a $242-million recapitalization.
Analysts blame many of its problems on the fact that Apria -- formed by a merger between Abbey Healthcare Group and Homedco Group -- has never fully realized any benefits from the deal
Separately Wednesday, the company reported a first-quarter loss of $6.6 million, or 13 cents a diluted share, compared with net income of $19.2 million, or 37 cents a share, a year ago. The company's revenues shrank to $250.5 million from $313.8 million a year ago.
The company blamed the revenue decline on a 25 percent reduction in Medicare reimbursement rates for home oxygen services, which it said reduced revenues by about $60 million. Discontinued businesses and managed care contracts also reduced revenues by about $80 million.
First Call analysts had projected the company would earn 3 cents a share in the quarter.
Officials promised to refocus the company on key businesses, including respiratory therapy and home medical equipment.
"We are beginning to see progress toward our goal of revitalizing and reshaping the company to address the changes in government reimbursement rates and compete aggressively in the changing homecare marketplace," said Lawrence M. Higby, president and chief executive officer.
"Apria is aggressively pursuing three primary objectives: to achieve quality growth, to improve revenue management and to control expenses."
April (AHG) shares ended up 5/8 to 9-1/2. 
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