Original Source: FD (FAIR DISCLOSURE) WIRE
MODERATOR: Ladies and gentlemen, our next speaker is Amin Khalifa, who is the Executive Vice President and CFO of Apria Healthcare.
AMIN KHALIFA, EVP, CFO, APRIA HEALTHCARE GROUP: Thank you, Paul, and good morning, ladies and gentlemen. I'm excited to be here today. We've got a great story at Apria. Never mind the Medicare cuts; we have a lot of other things want to talk about as well. But don't worry, we'll talk about Medicare as well!
I just wanted to first say that Safe Harbor rules do apply and then get into the important part of the presentation.
I would characterize Apria as a company that strives to be the best value in home healthcare. This company is very focused short-term on improving its productivity, as well as increasing its market share across both Medicare as well as managed care.
Longer-term, we're looking at pursuing several other opportunities because we see home healthcare as being sort of the win-win solution of delivering medical care over the long-term. We believe the footprint will expand and some services that are now done in hospitals will be done in the home. We know, from many different studies, that people are better off at home when they are able to be at home; the infection rates are lower and even from a state of mind, people are much happier being at home. So, we will talk also about some future direction as we move forward.
First of all, just looking at where our revenues come from, we are very different than most of our competitors, I would say actually all of our competitors. From a mix standpoint, respiratory is 69 percent of our product mix, but we also have a big component in home medical equipment as well as in infusion therapy. We're focused on growing our respiratory business, which is a higher-margin line, but we also look at doing the full suite of home healthcare, or at least a large amount of home healthcare.
As far as the payer mix is concerned, 64 percent of our mix there is from managed care organizations. We have very strong relationships in the industry and therefore, we are more limited to the government reimbursement changes. We do have a very complex business, I would say, compared to a lot of our competitors. We have an information system that right now has close to 4 million rules of how to bill 2000 managed care organizations. We can do all kinds of custom reporting, utilization management, a lot of things that managed care thinks about. We have a large platform; we have a footprint in all 50 states; we have high patient satisfaction ratings, and we're very committed to compliance. We think we are the industry leader in compliance and we take that very, very seriously.
From a financial standpoint, we continue to have very steady and improving margins and overall financial performance. Our EPS was up about 10 percent in the first quarter and we continue to just have overall pretty strong trends here.
If you want to look specifically our first quarter, our topline growth was lower than it has been in previous quarters. I'm happy to say this will be the low quarter of the year. We grew reported just under 5 percent. However, we had two things that affected of the quarter. One was, we resigned the Gentiva contract when it became apparent that it was going to become unprofitable. That cost us about 2, 2.5 percent in the quarter. It will cost us more than 3 percent in revenue growth for the year. We also had the Medicare reimbursement cuts that were around $3.5 million in the quarter, and that obviously will affect us all through the year and will bring down the growth rate by about 1 percent.
So when we strip out all of the ins and outs, our organic growth rate was about 5 percent. Acquisitions also were -- contributed about 3 percent to our growth. But because of our acquisition pipeline right now, you'll find that we will have significant growth in future quarters. We are estimating, for the year, we should be …