Delaware | 000-33009 | 56-2248952 | ||
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (IRS Employer Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
MEDCATH CORPORATION |
||||
Date: May 9, 2011 | By: | /s/ James A. Parker | ||
James A. Parker | ||||
Executive Vice President and Chief Financial Officer | ||||
Exhibit No. | Description | |
Exhibit 99.1
|
Press Release dated May 9, 2011 | |
Exhibit 99.2
|
Supplemental Financial Information |
MEDCATH CONTACT: |
||
O. Edwin French
|
Art Parker | |
President/Chief Executive Officer
|
Chief Financial Officer | |
(704) 815-7700
|
(704) 815-7700 |
| Net revenue of $97.2 million, up 0.4% compared to the second quarter of fiscal 2010. | ||
| Loss from continuing operations of ($12.3) million and adjusted EBITDA of $9.8 million, up 8.2% compared to second quarter of fiscal 2010. Adjusted EBITDA margin up 80 basis points to 10.1% from 9.3%. |
| Diluted loss per share from continuing operations of ($0.61) and adjusted EPS of $0.05. | ||
| Total admissions decrease for the second fiscal quarter of 2011 of 0.3%, and adjusted admissions decrease of 0.4%, compared to second quarter of fiscal 2010. |
| $19.5 million, or ($0.59) per diluted share, in long-lived asset impairment expense related to two hospitals; | ||
| $1.6 million, or ($0.05) per diluted share, of professional fees and other expenses incurred in connection with MedCaths strategic options process announced on March 1, 2010; | ||
| $0.9 million, or ($0.03) per diluted share, in share-based compensation expense; and | ||
| $0.2 million, or $0.01 per diluted share, related to a gain on the sale of a small unconsolidated affiliate. |
| $14.7 million, or ($0.60) per diluted share, in impairment expense; | ||
| $1.2 million, or ($0.03) per diluted share, in share-based compensation expense; and | ||
| $1.5 million, or ($0.05) per diluted share, loss on a note receivable. |
Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net revenue |
$ | 97,163 | $ | 96,777 | $ | 186,063 | $ | 184,607 | ||||||||
Operating expenses: |
||||||||||||||||
Personnel expense |
33,859 | 33,150 | 66,313 | 64,786 | ||||||||||||
Medical supplies expense |
23,189 | 23,581 | 42,411 | 45,688 | ||||||||||||
Bad debt expense |
10,006 | 9,931 | 19,715 | 17,437 | ||||||||||||
Other operating expenses |
22,843 | 22,296 | 46,959 | 44,640 | ||||||||||||
Pre-opening expenses |
| | | 866 | ||||||||||||
Depreciation |
4,630 | 6,124 | 9,517 | 12,064 | ||||||||||||
Impairment of long-lived assets |
19,548 | 14,700 | 19,548 | 14,700 | ||||||||||||
Loss (gain) on disposal of property, equipment and other assets |
178 | (69 | ) | 271 | 27 | |||||||||||
Total operating expenses |
114,253 | 109,713 | 204,734 | 200,208 | ||||||||||||
Loss from operations |
(17,090 | ) | (12,936 | ) | (18,671 | ) | (15,601 | ) | ||||||||
Other income (expenses): |
||||||||||||||||
Interest expense |
(997 | ) | (1,054 | ) | (2,079 | ) | (1,999 | ) | ||||||||
Interest and other income |
50 | 15 | 539 | 85 | ||||||||||||
Gain on sale of unconsolidated affiliates |
179 | | 15,570 | | ||||||||||||
Loss on note receivable |
| (1,507 | ) | | (1,507 | ) | ||||||||||
Equity in net earnings of unconsolidated affiliates |
1,258 | 3,092 | 1,860 | 4,608 | ||||||||||||
Total other income (expense), net |
490 | 546 | 15,890 | 1,187 | ||||||||||||
Loss from continuing operations before income taxes |
(16,600 | ) | (12,390 | ) | (2,781 | ) | (14,414 | ) | ||||||||
Income tax benefit |
(7,695 | ) | (5,639 | ) | (3,213 | ) | (6,976 | ) | ||||||||
(Loss) income from continuing operations |
(8,905 | ) | (6,751 | ) | 432 | (7,438 | ) | |||||||||
(Loss) income from discontinued operations, net of taxes |
(1,401 | ) | (1,934 | ) | 37,727 | (3,064 | ) | |||||||||
Net (loss) income |
(10,306 | ) | (8,685 | ) | 38,159 | (10,502 | ) | |||||||||
Less: Net income attributable to noncontrolling interest |
(3,189 | ) | (2,524 | ) | (14,615 | ) | (3,364 | ) | ||||||||
Net (loss) income attributable to MedCath Corporation |
$ | (13,495 | ) | $ | (11,209 | ) | $ | 23,544 | $ | (13,866 | ) | |||||
Amounts attributable to MedCath Corporation common stockholders: |
||||||||||||||||
Loss from continuing operations, net of taxes |
$ | (12,341 | ) | $ | (8,970 | ) | $ | (5,179 | ) | $ | (10,872 | ) | ||||
(Loss) income from discontinued operations, net of taxes |
(1,154 | ) | (2,239 | ) | 28,723 | (2,994 | ) | |||||||||
Net (loss) income |
$ | (13,495 | ) | $ | (11,209 | ) | $ | 23,544 | $ | (13,866 | ) | |||||
(Loss) earnings per share, basic |
||||||||||||||||
Loss from continuing operations attributable to MedCath Corporation common stockholders |
$ | (0.61 | ) | $ | (0.46 | ) | $ | (0.26 | ) | $ | (0.55 | ) | ||||
(Loss) income from discontinued operations attributable to MedCath Corporation common stockholders |
(0.06 | ) | (0.11 | ) | 1.43 | (0.15 | ) | |||||||||
(Loss) earnings per share, basic |
$ | (0.67 | ) | $ | (0.57 | ) | $ | 1.17 | $ | (0.70 | ) | |||||
(Loss) earnings per share, diluted |
||||||||||||||||
Loss from continuing operations attributable to MedCath Corporation common stockholders |
$ | (0.61 | ) | $ | (0.46 | ) | $ | (0.26 | ) | $ | (0.55 | ) | ||||
(Loss) income from discontinued operations attributable to MedCath Corporation common stockholders |
(0.06 | ) | (0.11 | ) | 1.43 | (0.15 | ) | |||||||||
(Loss) earnings per share, diluted |
$ | (0.67 | ) | $ | (0.57 | ) | $ | 1.17 | $ | (0.70 | ) | |||||
Weighted average number of shares, basic |
20,208 | 19,829 | 20,075 | 19,786 | ||||||||||||
Dilutive effect of stock options and restricted stock |
| | 6 | | ||||||||||||
Weighted average number of shares, diluted |
20,208 | 19,829 | 20,081 | 19,786 | ||||||||||||
March 31, | September 30, | |||||||
2011 | 2010 | |||||||
(Unaudited) | ||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 119,735 | $ | 33,141 | ||||
Accounts receivable, net |
49,748 | 43,811 | ||||||
Income tax receivable |
| 6,188 | ||||||
Medical supplies |
10,373 | 10,550 | ||||||
Deferred income tax assets |
8,500 | 13,247 | ||||||
Prepaid expenses and other current assets |
12,949 | 13,453 | ||||||
Current assets of discontinued operations |
46,619 | 47,920 | ||||||
Total current assets |
247,924 | 168,310 | ||||||
Property and equipment, net |
153,469 | 182,222 | ||||||
Other assets |
18,484 | 24,716 | ||||||
Non-current assets of discontinued operations |
1,152 | 119,290 | ||||||
Total assets |
$ | 421,029 | $ | 494,538 | ||||
Current liabilities: |
||||||||
Accounts payable |
$ | 16,633 | $ | 15,716 | ||||
Income tax payable |
3,205 | | ||||||
Accrued compensation and benefits |
14,775 | 16,418 | ||||||
Other accrued liabilities |
15,503 | 16,663 | ||||||
Current portion of long-term debt and obligations
under capital leases |
32,793 | 16,672 | ||||||
Current liabilities of discontinued operations |
14,174 | 35,044 | ||||||
Total current liabilities |
97,083 | 100,513 | ||||||
Long-term debt |
| 52,500 | ||||||
Obligations under capital leases |
5,191 | 6,500 | ||||||
Other long-term obligations |
2,804 | 5,053 | ||||||
Long-term liabilities of discontinued operations |
| 35,968 | ||||||
Total liabilities |
105,078 | 200,534 | ||||||
Commitments and contingencies |
||||||||
Redeemable noncontrolling interest |
7,356 | 11,534 | ||||||
Stockholders equity: |
||||||||
Preferred stock, $0.01 par value, 10,000,000 shares authorized;
none issued |
| | ||||||
Common stock, $0.01 par value, 50,000,000 shares authorized;
22,281,828 issued and 20,327,467 outstanding at March 31, 2011;
22,423,666 issued and 20,469,305 outstanding at September 30, 2010 |
216 | 216 | ||||||
Paid-in capital |
458,573 | 457,725 | ||||||
Accumulated deficit |
(116,247 | ) | (139,791 | ) | ||||
Accumulated other comprehensive loss |
| (444 | ) | |||||
Treasury stock, at cost; |
||||||||
1,954,361 shares at March 31, 2011 and September 30, 2010 |
(44,797 | ) | (44,797 | ) | ||||
Total MedCath Corporation stockholders equity |
297,745 | 272,909 | ||||||
Noncontrolling interest |
10,850 | 9,561 | ||||||
Total equity |
308,595 | 282,470 | ||||||
Total liabilities and equity |
$ | 421,029 | $ | 494,538 | ||||
Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||||||||||
2011 | 2010 | % Change | 2011 | 2010 | % Change | |||||||||||||||||||
Statement of Operations Data: |
||||||||||||||||||||||||
Net revenue |
$ | 97,163 | $ | 96,777 | 0.4 | % | $ | 186,063 | $ | 184,607 | 0.8 | % | ||||||||||||
Adjusted EBITDA (1) |
$ | 9,770 | $ | 9,033 | 8.2 | % | $ | 15,575 | $ | 13,882 | 12.2 | % | ||||||||||||
Loss from operations |
$ | (17,090 | ) | $ | (12,936 | ) | 32.1 | % | $ | (18,671 | ) | $ | (15,601 | ) | 19.7 | % | ||||||||
Loss from continuing operations, net of taxes |
$ | (12,341 | ) | $ | (8,970 | ) | 37.6 | % | $ | (5,179 | ) | $ | (10,872 | ) | (52.4 | )% | ||||||||
Loss per share from continuing operations, basic |
$ | (0.61 | ) | $ | (0.46 | ) | 32.1 | % | $ | (0.26 | ) | $ | (0.55 | ) | (53.0 | )% | ||||||||
Loss per share from continuing operations, diluted |
$ | (0.61 | ) | $ | (0.46 | ) | 32.1 | % | $ | (0.26 | ) | $ | (0.55 | ) | (53.1 | )% |
(1) | See Supplemental Financial Disclosure-Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures. |
Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||||||||||
2011 | 2010 | % Change | 2011 | 2010 | % Change | |||||||||||||||||||
Selected Operating Data (a): |
||||||||||||||||||||||||
Number of hospitals |
5 | 5 | 5 | 5 | ||||||||||||||||||||
Licensed beds (c) |
421 | 421 | 421 | 421 | ||||||||||||||||||||
Staffed and available beds (d) |
380 | 380 | 380 | 380 | ||||||||||||||||||||
Admissions (e) |
4,905 | 4,918 | (0.3 | )% | 9,343 | 9,404 | (0.6 | )% | ||||||||||||||||
Adjusted admissions (f) |
7,231 | 7,257 | (0.4 | )% | 14,074 | 13,745 | 2.4 | % | ||||||||||||||||
Patient days (g) |
18,840 | 18,690 | 0.8 | % | 35,085 | 35,362 | (0.8 | )% | ||||||||||||||||
Adjusted patient days (h) |
28,018 | 27,626 | 1.4 | % | 53,194 | 51,905 | 2.5 | % | ||||||||||||||||
Average length of stay (days) (i) |
3.84 | 3.80 | 1.1 | % | 3.76 | 3.76 | 0.0 | % | ||||||||||||||||
Occupancy (j) |
55.1 | % | 54.6 | % | 50.7 | % | 51.1 | % | ||||||||||||||||
Inpatient catheterization procedures (k) |
1,940 | 2,054 | (5.6 | )% | 3,732 | 3,888 | (4.0 | )% | ||||||||||||||||
Inpatient surgical procedures (l) |
1,187 | 1,171 | 1.4 | % | 2,219 | 2,259 | (1.8 | )% | ||||||||||||||||
Hospital net revenue |
$ | 94,996 | $ | 93,881 | 1.2 | % | $ | 181,614 | $ | 178,263 | 1.9 | % | ||||||||||||
Combined Operating Data (b): |
||||||||||||||||||||||||
Number of hospitals |
6 | 6 | 6 | 6 | ||||||||||||||||||||
Licensed beds (c) |
533 | 533 | 533 | 533 | ||||||||||||||||||||
Staffed and available beds (d) |
489 | 488 | 489 | 488 | ||||||||||||||||||||
Admissions (e) |
6,658 | 6,933 | (4.0 | )% | 12,914 | 13,136 | (1.7 | )% | ||||||||||||||||
Adjusted admissions (f) |
10,441 | 10,953 | (4.7 | )% | 20,608 | 20,622 | (0.1 | )% | ||||||||||||||||
Patient days (g) |
24,514 | 24,883 | (1.5 | )% | 46,233 | 46,710 | (1.0 | )% | ||||||||||||||||
Adjusted patient days (h) |
38,409 | 38,985 | (1.5 | )% | 73,593 | 72,817 | 1.1 | % | ||||||||||||||||
Average length of stay (days) (i) |
3.68 | 3.59 | 2.5 | % | 3.58 | 3.56 | 0.6 | % | ||||||||||||||||
Occupancy (j) |
55.7 | % | 56.7 | % | 51.9 | % | 52.6 | % | ||||||||||||||||
Inpatient catheterization procedures (k) |
2,129 | 2,286 | (6.9 | )% | 4,101 | 4,318 | (5.0 | )% | ||||||||||||||||
Inpatient surgical procedures (l) |
1,603 | 1,553 | 3.2 | % | 3,054 | 3,002 | 1.7 | % | ||||||||||||||||
Hospital net revenue |
$ | 122,606 | $ | 119,333 | 2.7 | % | $ | 235,325 | $ | 227,980 | 3.2 | % |
(a) | Selected operating data includes consolidated hospitals in operation as of the end of the period reported in continuing operations but does not include hospitals which are accounted for using the equity method or as discontinued operations in our consolidated financial statements. | |
(b) | Combined operating data includes hospitals in operation as of the end of the period reported in continuing operations including hospitals which are accounted for using the equity method in our consolidated financial statements. | |
(c) | Licensed beds represent the number of beds for which the appropriate state agency licenses a facility regardless of whether the beds are actually available for patient use. | |
(d) | Staffed and available beds represent the number of beds that are readily available for patient use at the end of the period. | |
(e) | Admissions represent the number of patients admitted for inpatient treatment. | |
(f) | Adjusted admissions is a general measure of combined inpatient and outpatient volume. We computed adjusted admissions by dividing gross patient revenue by gross inpatient revenue and then multiplying the quotient by admissions. | |
(g) | Patient days represent the total number of days of care provided to inpatients. | |
(h) | Adjusted patient days is a general measure of combined inpatient and outpatient volume. We computed adjusted patient days by dividing gross patient revenue by gross inpatient revenue and then multiplying the quotient by patient days. | |
(i) | Average length of stay (days) represents the average number of days inpatients stay in our hospitals. | |
(j) | We computed occupancy by dividing patient days by the number of days in the period and then dividing the quotient by the number of staffed and available beds. | |
(k) | Inpatients with a catheterization procedure represent the number of inpatients with a procedure performed in one of the hospitals catheterization labs during the period. | |
(l) | Inpatient surgical procedures represent the number of surgical procedures performed on inpatients during the period. |
Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Loss from continuing operations, net of taxes |
$ | (12,341 | ) | $ | (8,970 | ) | $ | (5,179 | ) | $ | (10,872 | ) | ||||
Add: |
||||||||||||||||
Income tax (benefit) expense |
(7,695 | ) | (5,639 | ) | (3,213 | ) | (6,976 | ) | ||||||||
Net income attributable to noncontrolling interest |
3,436 | 2,216 | 5,610 | 3,434 | ||||||||||||
Equity in net earnings of unconsolidated affiliates |
(1,258 | ) | (3,092 | ) | (1,860 | ) | (4,608 | ) | ||||||||
Interest and other income |
(50 | ) | (15 | ) | (539 | ) | (85 | ) | ||||||||
Loss on note receivable |
| 1,507 | | 1,507 | ||||||||||||
Gain on sale of unconsolidated affiliates |
(179 | ) | | (15,570 | ) | | ||||||||||
Interest expense |
997 | 1,054 | 2,079 | 1,999 | ||||||||||||
Loss (gain) on disposal of property, equipment and other assets |
178 | (69 | ) | 271 | 27 | |||||||||||
Impairment of long-lived assets |
19,548 | 14,700 | 19,548 | 14,700 | ||||||||||||
Depreciation |
4,630 | 6,124 | 9,517 | 12,064 | ||||||||||||
Pre-opening expenses |
| | | 866 | ||||||||||||
Share-based compensation expense |
922 | 1,217 | 2,854 | 1,826 | ||||||||||||
Professional fees for strategic options process |
1,582 | | 4,144 | | ||||||||||||
Sales tax refunds, net |
| | (2,087 | ) | | |||||||||||
Adjusted EBITDA |
$ | 9,770 | $ | 9,033 | $ | 15,575 | $ | 13,882 | ||||||||
Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Diluted (loss) earnings per share |
$ | (0.61 | ) | $ | (0.46 | ) | $ | (0.26 | ) | $ | (0.55 | ) | ||||
Add: |
||||||||||||||||
Gain on sale of unconsolidated affiliates |
(0.01 | ) | | (0.47 | ) | | ||||||||||
Professional fees for strategic options process |
0.05 | | 0.13 | | ||||||||||||
Sales tax refunds |
| | (0.06 | ) | | |||||||||||
Impairment of long-lived assets |
0.59 | 0.60 | 0.59 | 0.60 | ||||||||||||
Loss on note receivable |
| 0.05 | | 0.05 | ||||||||||||
Share-based compensation expense |
0.03 | 0.04 | 0.09 | 0.06 | ||||||||||||
Pre-opening expense |
| | | 0.02 | ||||||||||||
Adjusted diluted earnings per share |
$ | 0.05 | $ | 0.23 | $ | 0.02 | $ | 0.18 | ||||||||