-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EDkc5Zm4q60KWb+yoyD70T8jOxMw6tAGpzrkFnVewTQ60+OsPuaSCedkJ+b32wH6 zSkR4OeBLNPAa6kQmwTZdQ== 0000891092-04-002042.txt : 20040429 0000891092-04-002042.hdr.sgml : 20040429 20040428202811 ACCESSION NUMBER: 0000891092-04-002042 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040428 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040429 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENTIVA HEALTH SERVICES INC CENTRAL INDEX KEY: 0001096142 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HOME HEALTH CARE SERVICES [8082] IRS NUMBER: 364335801 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15669 FILM NUMBER: 04762208 BUSINESS ADDRESS: STREET 1: 3 HUNTINGTON QUADRANGLE 2S CITY: MELVILLE STATE: NY ZIP: 11747-8943 BUSINESS PHONE: 6315017000 MAIL ADDRESS: STREET 1: 3 HUNTINGTON QUADRANGLE 2S CITY: MELVILLE STATE: NY ZIP: 11747-8943 FORMER COMPANY: FORMER CONFORMED NAME: OLSTEN HEALTH SERVICES HOLDING CORP DATE OF NAME CHANGE: 19991001 8-K 1 e17683_8k.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (date of earliest event reported): April 28, 2004 GENTIVA HEALTH SERVICES, INC. (Exact name of registrant as specified in its charter) Delaware 1-15669 36-4335801 (State or other jurisdiction (Commission File No.) (IRS Employer of incorporation) Identification No.) 3 Huntington Quadrangle, Suite 200S, Melville, New York 11747-4627 (Address of principal executive offices) (Zip Code) (631) 501-7000 (Registrant's telephone number, including area code) Item 7. Financial Statements and Exhibits. (c) Exhibits. The following exhibit is furnished herewith pursuant to Item 12: Exhibit No. Description - ----------- ----------- 99.1 Press Release Item 12. Results of Operations and Financial Condition. On April 28, 2004, Gentiva Health Services, Inc. (the "Company") issued a press release on the subject of 2004 first quarter consolidated earnings for the Company. A copy of such release is attached hereto as Exhibit 99.1. In accordance with General Instruction B.6 of Form 8-K, the information in this Item 12 and Exhibit 99.1 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such a filing. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. GENTIVA HEALTH SERVICES, INC. (Registrant) /s/ John R. Potapchuk ------------------------------- John R. Potapchuk Senior Vice President and Chief Financial Officer Date: April 28, 2004 EX-99.1 2 e17683ex99_1.txt PRESS RELEASE [LOGO] Gentiva HEALTH SERVICES - -------------------------------------------------------------------------------- Press Release Financial and Investor Contact: John R. Potapchuk 631-501-7035 john.potapchuk@gentiva.com Media Contact: David Fluhrer 631-501-7102 516-857-7231 david.fluhrer@gentiva.com FOR IMMEDIATE RELEASE Gentiva(R) Reports First Quarter 2004 Increases in EPS and Net Revenues Melville, N.Y., April 28, 2004 -- Gentiva Health Services, Inc. (NASDAQ: GTIV), the nation's largest provider of comprehensive home health services, today reported net income of $9.2 million, or $0.34 per diluted share, for the first quarter ended March 28, 2004 as compared to $5.2 million, or $0.19 per diluted share, for the corresponding period of fiscal 2003. Results for the fiscal 2004 period included special items related to the favorable settlement of the Company's 1997 Medicare cost reports net of a revenue adjustment to reflect an industrywide repayment of certain Medicare reimbursements relating to periods since the inception of the Prospective Payment Reimbursement System in October 2000. The special items contributed $8.0 million to net revenues and income before income taxes in the 2004 first quarter. Net income for the first quarter of 2004 - excluding the impact of the special items - was $4.3 million, or $0.16 per diluted share, compared to $3.5 million, or $0.13 per diluted share, assuming a normalized tax rate of 39% for the first quarter of 2003. In the 2003 period, the actual effective tax rate was 10.5%, resulting from the reversal of a portion of Gentiva's deferred tax valuation allowance. (See Supplemental Information for a reconciliation between Net income - As Reported and Net income - Pro Forma.) First quarter 2004 net revenues, excluding the $8.0 million in special items, were $205.9 million compared to the $202.0 million reported in the first quarter of 2003. Gentiva's Medicare revenues for the first quarter of 2004 increased 28.3% over the first quarter of 2003, excluding the impact of the special items. 2 Medicare revenue growth was driven by an increase of 20% in admissions, as well as higher reimbursement rates compared to the prior year period, and various operational and clinical process enhancements. Revenues from the Company's two other major payor categories - Commercial Insurance and Other, and Medicaid and Other Government -- declined 4.2% and 7.5%, respectively, compared to the first quarter of 2003 due to two factors: lower revenue from the recently renewed managed care contract with CIGNA HealthCare that more than offset an increase in other managed care revenue, and continuation of reductions in reimbursements and services associated with certain Medicaid and other state and county health programs that remain under state budget pressure. Net revenues, excluding the special items and revenues from CIGNA, increased $16.2 million, or 12.9%, in the first quarter of 2004. Revenues from CIGNA, which declined 16% in the first quarter, represented approximately 30% of Gentiva's total net revenues in the first quarter of 2004 versus 38% in the comparable period of 2003. "Our Company generated positive results in the first quarter because we have executed the sales, operational and clinical strategies to deal effectively with expected changes in our revenue mix," said Gentiva Chairman and CEO Ron Malone. "Excluding the special items, our net revenues grew about 2%, while our pre-tax income increased 23%. We have said before that our strategies are designed to generate healthier results in a constantly changing environment. Our first quarter results continue to demonstrate that those strategies are working." Non-GAAP Financial Measures The information provided in the following tables includes certain non-GAAP financial measures as defined under Securities and Exchange Commission (SEC) rules. In accordance with SEC rules, the Company has provided, in the supplemental information and the footnotes to the tables, a reconciliation of those measures to the most directly comparable GAAP measures. Conference Call and Web Cast Details The Company will comment further on its first quarter results during its quarterly conference call and live web cast to be held tomorrow morning, April 29, 2004, at 10:00 a.m. Eastern Daylight Time. To participate in the call from the United States or Canada, dial: (612) 326-1019. The web cast is an audio only, one-way event. Web cast listeners who wish to ask questions must participate in the conference call. To hear the web cast, log onto http://www.gentiva.com/investor/events.asp. This press release is also accessible at the same link, and a transcript of the conference call will be available on the site within 24 hours after the call. 3 About Gentiva Health Services Gentiva Health Services is the nation's largest provider of comprehensive home health services. Gentiva serves patients through more than 350 direct service delivery units within approximately 250 locations in 35 states, and through CareCentrix(R), which manages home health care services for many major managed care organizations throughout the United States. The Company is a single source for skilled nursing; physical, occupational, speech and neuro-rehabilitation services; social work; nutrition; disease management education and help with daily living activities, as well as other therapies and services. Gentiva's revenues are generated from commercial insurance, federal and state government programs and individual consumers. For more information, visit Gentiva's web site, www.gentiva.com, and its investor relations section at http://www.gentiva.com/investor. (Tables and notes follow) (in 000's, except per share data) 1st Quarter ----------- 2004 2003 ---- ---- Statements of Income Net revenues $ 213,905 $ 202,016 Cost of services sold 130,643 133,250 ---------------------- Gross profit 83,262 68,766 Selling, general and administrative expenses (66,369) (61,253) Depreciation and amortization (1,845) (1,745) ---------------------- Operating income 15,048 5,768 Interest income, net 82 43 ---------------------- Income before income taxes 15,130 5,811 Income tax expense (5,900) (610) ---------------------- Net income $ 9,230 $ 5,201 ====================== Earnings per Share Net income: Basic $ 0.36 $ 0.19 ====================== Diluted $ 0.34 $ 0.19 ====================== Average shares outstanding: Basic 25,542 26,696 ====================== Diluted 27,084 27,752 ====================== 4 Condensed Balance Sheets ASSETS Mar 28, 2004 Dec 28, 2003 ------------ ------------ Cash, cash equivalents and restricted cash $111,110 $100,013 Short-term investments -- 10,000 Net receivables 138,127 132,998 Deferred tax assets 22,311 26,464 Prepaid expenses and other current assets 8,275 6,524 --------------------- Total current assets 279,823 275,999 Fixed assets 18,082 15,135 Deferred tax assets, net 27,006 28,025 Other assets 16,447 15,929 --------------------- Total assets $341,358 $335,088 ===================== LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable $ 19,559 $ 16,079 Payroll and related taxes 12,120 12,932 Medicare liabilities 13,178 12,736 Cost of claims incurred but not reported 27,897 28,525 Obligations under insurance programs 36,708 37,200 Other accrued expenses 30,473 32,230 --------------------- Total current liabilities 139,935 139,702 Other liabilities 19,805 18,207 Shareholders' equity 181,618 177,179 --------------------- Total liabilities and shareholders' equity $341,358 $335,088 ===================== Common shares outstanding 25,309 25,598 ===================== Note: Cash, cash equivalents and restricted cash includes restricted cash of $21.8 million at March 28, 2004 and December 28, 2003. 5 1st Quarter ----------- Condensed Statements of Cash Flows 2004 2003 ---- ---- OPERATING ACTIVITIES: Net income $ 9,230 $ 5,201 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 1,845 1,745 Provision for doubtful accounts 2,047 2,031 Gain on sale / disposal of businesses and fixed assets -- (191) Deferred income taxes 5,172 -- Changes in assets and liabilities, net of acquisitions/divestitures (8,927) (1,118) Other, net (13) (5) ----------------------- Net cash provided by operating activities 9,354 7,663 ----------------------- INVESTING ACTIVITIES: Purchase of fixed assets (3,370) (2,487) Proceeds from sale of assets / business -- 200 Acquisition of businesses -- (1,300) Maturities (purchase) of short-term investments 10,000 (10,000) ----------------------- Net cash provided by (used in) investing activities 6,630 (13,587) ----------------------- FINANCING ACTIVITIES: Proceeds from issuance of common stock 1,039 714 Repurchases of common stock (5,830) -- Repayment of capital lease obligations (96) -- ----------------------- Net cash (used in) provided by financing activities (4,887) 714 ----------------------- Net change in cash, cash equivalents and restricted cash 11,097 (5,210) Cash, cash equivalents and restricted cash at beginning of period 100,013 101,241 ----------------------- Cash, cash equivalents and restricted cash at end of period $ 111,110 $ 96,031 ======================= Supplemental Schedule of Non-Cash Investing and Financing Activities: Fixed assets acquired under capital lease $ 1,443 $ -- ======================= 6 1st Quarter ----------- 2004 2003 ---- ---- Supplemental Information Net Revenues by Major Payor Source: Medicare (1) $ 62,601 $ 42,568 Medicaid and other government 39,167 42,345 Commercial insurance and other 112,137 117,103 ----------------------- Total net revenues $ 213,905 $202,016 ======================= A reconciliation of net income between As Reported and Pro Forma amounts follows(2): Net income - As Reported $ 9,230 $ 5,201 Add: income tax expense - As Reported (3) 5,900 610 ----------------------- Income before income taxes - As Reported 15,130 5,811 Less: Medicare cost report settlement (1) (9,003) -- Add: Revenue adjustment for estimated Medicare repayment (1) 1,000 -- ----------------------- Income before income taxes - Pro Forma 7,127 5,811 Less: income tax expense - At assumed 39% rate (3) 2,780 2,266 ----------------------- Net income - Pro Forma $ 4,347 $ 3,545 ======================= Diluted Earnings per Share Net income - As Reported $ 0.34 $ 0.19 ======================= Net income - Pro Forma $ 0.16 $ 0.13 ======================= Notes: 1) Medicare revenues for the first quarter of fiscal 2004 included approximately $9 million received in settlement of the Company's appeal filed with the U.S. Provider Reimbursement Review Board ("PRRB") related to the reopening of all of its 1997 cost reports net of a $1 million estimated repayment to Medicare in connection with services rendered to certain patients since the inception of the Prospective Payment Reimbursement System in October 2000. The Centers for Medicare & Medicaid Services has recently determined that homecare providers should have received lower reimbursements for certain services rendered to beneficiaries discharged from inpatient hospitals within fourteen days immediately preceding admission to home healthcare. 2) Although "Net income - Pro Forma" is a non-GAAP financial measure, management believes that the presentation of net income as calculated using an effective tax rate of 39% and excluding the PRRB settlement and the estimated Medicare repayments as described in Note 1, is a useful adjunct to "Net income - As Reported" under GAAP because it measures the Company's performance in a consistent manner between the results for the first quarter of fiscal years 2004 and 2003. In addition, "Net income - Pro Forma" facilitates comparison between Gentiva and other companies. Furthermore, due to the lower effective tax rate for the first quarter of fiscal 2003 as described in Note 3, the presentation of "Net income - Pro Forma" incorporates an effective tax rate which is more representative of the Company's normalized rate. Management also believes that the PRRB settlement net of the Medicare estimated repayment recorded in the first quarter of fiscal 2004 should be excluded from "Net income - Pro Forma" for fiscal year 2004, as these items relate to reimbursement activities from prior periods as described in Note 1. For these reasons, management believes that "Net income - Pro Forma" is useful to investors. Investors should not view "Net income - Pro Forma" as an alternative to the GAAP measure of Net income. 7 3) For the first quarter of fiscal 2003, the Company's effective tax rate was 10.5%. This effective rate was lower than the statutory income tax rate due to the reversal of a portion of the Company's valuation allowance relating to the realization of tax benefits associated with a net operating loss carry forward and other net deferred tax assets. A 39% effective tax rate is more representative of the Company's normalized tax rate for reporting purposes. Forward-Looking Statement Certain statements contained in this news release, including, without limitation, statements containing the words "believes," "anticipates," "intends," "expects," "assumes," "trends" and similar expressions, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based upon the Company's current plans, expectations and projections about future events. However, such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, general economic and business conditions; demographic changes; changes in, or failure to comply with, existing governmental regulations; legislative proposals for health care reform; changes in Medicare and Medicaid reimbursement levels; effects of competition in the markets the Company operates in; liability and other claims asserted against the Company; ability to attract and retain qualified personnel; availability and terms of capital; loss of significant contracts or reduction in revenues associated with major payor sources; ability of customers to pay for services; a material shift in utilization within capitated agreements; and changes in estimates and judgments associated with critical accounting policies. For a detailed discussion of these and other factors that could cause actual results to differ from those contained in this news release, please refer to the Company's various filings with the Securities and Exchange Commission (SEC), including the "risk factors" section contained in the Company's annual report on Form 10-K for the year ended December 28, 2003. # # # -----END PRIVACY-ENHANCED MESSAGE-----