Turk File

Turk File 04.25.2007

by Leslie Turk

LHC Group's buying spree continues

Last week Lafayette-based health care provider LHC Group, which has been on a buying spree since its initial public offering in mid-2005, announced that it has signed a definitive agreement to buy a controlling interest in Princeton Community HomeCare, a hospital-owned home health agency in Princeton, W. Va. LHC Group takes over the agency, which will operate as PHC Home Health, May 1. Though the value of the deal was not divulged, LHC Group Chief Financial Officer Barry Stewart says these acquisitions typically go for .7 times Medicare revenues; Princeton Community HomeCare's annual Medicare revenue is about $1.3 million. Stewart says LHC Group's interest in such deals is typically 67 percent, which would put the value of this transaction at about $610,000.

In 2006 alone, LHC Group had 27 acquisitions.

The company, which now has 4,000 employees, provides post-acute health care services — both home- and facility-based — primarily to Medicare patients in rural markets throughout 10 southern states. Among its holdings are more than 125 home nursing agencies, six hospices, 12 facility-based locations (seven are long-term acute care hospitals), and a home health pharmacy.

Before acquiring Princeton, LHC Group operated in 16 West Virginia counties, but the new partnership with Princeton Community Hospital Association expands its business into six additional counties.

Last year, the local health care provider's earnings jumped to $20.6 million, or $1.20 per share, compared with $10.1 million, or 69 cents per share, in 2005. For the year, revenue rose to $215.2 million from $152.7 million. LHC Group beat analysts' predictions for fourth quarter earnings when profits climbed to $6.9 million, or 39 cents per share, compared with $3.2 million, or 19 cents per share, in the fourth quarter of 2005. Fourth quarter revenue was $64.2 million and $42.7 million, respectively. On average, analysts had predicted quarterly earnings of 29 cents per share on $59.8 million in revenue.

The company's first quarter 2007 financial results will be released after the market closes Monday, April 30; an earnings conference call is scheduled for Tuesday, May 1, at 9 a.m.

EatLafayette campaign signing up local eateries

The Lafayette Convention and Visitors Commission is signing up locally-owned restaurants for the third annual EatLafayette campaign, the brainchild of Charley G's owner Charlie Goodson. "The idea is to expose residents to the wide variety of local restaurant options available in and around Lafayette," says Goodson. The six-week campaign is held during the summer, traditionally a slow time for restaurants; this year's runs June 18-July 31.

The specials vary with each restaurant and can range from buy-one-get-one-free entrées to simply a complimentary glass of wine with a meal. Last year 28 restaurants participated, and Goodson says some reported double digit increases in business. The program emphasizes the economic benefits of dining at independent eateries, claiming dollars spent at these establishments have a "multiplier effect" — every dollar generates five times that amount as it cycles back through the community. Restaurants already in the campaign include Charley G's, Blue Dog Café, Nash's, Poor Boys Riverside Inn, Nimbeaux's, Randol's and Tsunami Sushi; those that sign up before the end of May will get the full benefit of advertising exposure that starts in early June, but LCVC is hoping to have the list close to finalization by the end of this month. For more info, visit www.eatlafayette.com, and to participate, contact LCVC's Kelly Strenge at 232-3737.

Lafayette's creative class tops in South

Southern Business & Development magazine named Lafayette one of the top cities in the South for the "creative class," a term penned by author Richard Florida in his 2002 book, The Rise of the Creative Class. Florida's controversial socio-economic theory holds that the creative class, which he defines as knowledge workers, will be driving the American economy in the near future. The class includes the usual suspects — artists, musicians, writers, architects — but is broadened by Florida to encompass other groups like teachers, doctors and lawyers.

If Florida's argument holds, Lafayette will join other southern cities like Atlanta, Austin, Charlotte and Houston as an economic leader in the region. "Lafayette keeps stride with the larger metros with the kind of cultural diversity and forward thinking that sets this creative city and parish apart," the magazine notes. "With a rich French heritage blended with Spanish, American, Indian and African influences, Lafayette represents a colorful combination of lifestyles. Locals still exhibit proudly a 'wildcatter mentality' founded on risk taking and entrepreneurial spirit. An example is the city's 'Fiber to the Premises Initiative,' designed to make state-of-the-art communications and technology available to every household in the area."

Lourdes closes on $14 million Boustany property

On April 11, Our Lady of Lourdes finalized its acquisition of a 45-acre tract on Frem Boustany Drive at Ambassador Caffery Parkway that will eventually house a portion of its campus ("Lourdes on the move?" Jan. 3, 2007). The property, which Lourdes bought for $14 million, is across Ambassador Caffery from the new Cordoba office complex and Home Bank. Confirming only that he will develop an Ambassador Caffery campus and calling the project "a top priority," Lourdes President and CEO Bud Barrow says he will release more details before the end of the year. Hopefully, Barrow will also have news on possible plans for the space Lourdes will be vacating at its existing site, located at the corner of St. Landry and St. Mary streets. The property is a couple of blocks from UL Lafayette and could potentially be used to expand the university's campus.

Should Lourdes relocate most of its services to Ambassador Caffery Parkway, it will be well-positioned to take advantage of that corridor's growth and expanding population. Plans call for Ambassador Caffery Parkway to be extended south to U.S. Highway 90, opening up a large portion of previously undeveloped real estate.