EX-99.2 3 g96670exv99w2.htm EX-99.2 EX-99.2
 

Exhibit 99.2
MEDCATH CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
                                 
    Three Months Ended June 30,     Nine Months Ended June 30,  
    2005     2004     2005     2004  
Net revenue
   $ 195,116     $ 176,165     $ 571,890     $ 499,968  
Operating expenses:
                                
Personnel expense
     58,663       54,818       175,278       154,245  
Medical supplies expense
     55,838       50,983       163,888       138,940  
Bad debt expense
     14,814       9,556       38,245       32,819  
Other operating expenses
     39,313       37,353       115,218       105,468  
Pre-opening expenses
     —       —       —       5,103  
Depreciation
     9,517       10,921       28,684       31,074  
Amortization
     290       290       870       870  
Loss (gain) on disposal of property, equipment and other assets
     171       24       245       (27 )
 
                        
Total operating expenses
     178,606       163,945       522,428       468,492  
 
                        
Income from operations
     16,510       12,220       49,462       31,476  
Other income (expenses):
                                
Interest expense
     (8,454 )     (6,863 )     (24,227 )     (19,925 )
Interest and other income, net
     887       218       1,903       614  
Equity in net earnings of unconsolidated affiliates
     899       900       2,554       2,624  
 
                        
Total other expenses, net
     (6,668 )     (5,745 )     (19,770 )     (16,687 )
 
                        
Income from continuing operations before minority interest, income taxes and discontinued operations
     9,842       6,475       29,692       14,789  
Minority interest share of earnings of consolidated subsidiaries
     (3,956 )     (2,852 )     (12,357 )     (3,878 )
 
                        
Income from continuing operations before income taxes and discontinued operations
     5,886       3,623       17,335       10,911  
Income tax expense
     2,528       1,169       7,107       3,978  
 
                        
Income from continuing operations
     3,358       2,454       10,228       6,933  
Income (loss) from discontinued operations, net of taxes
     (609 )     (1,074 )     864       (3,845 )
 
                        
Net income
   $ 2,749     $ 1,380     $ 11,092     $ 3,088  
 
                        
 
Earnings (loss) per share, basic
                                
Continuing operations
   $ 0.18     $ 0.14     $ 0.56     $ 0.38  
Discontinued operations
     (0.03 )     (0.06 )     0.05       (0.21 )
 
                        
Earnings per share, basic
   $ 0.15     $ 0.08     $ 0.61     $ 0.17  
 
                        
 
Earnings (loss) per share, diluted
                                
Continuing operations
   $ 0.17     $ 0.13     $ 0.53     $ 0.38  
Discontinued operations
     (0.03 )     (0.06 )     0.04       (0.21 )
 
                        
Earnings per share, diluted
   $ 0.14     $ 0.07     $ 0.57       0.17  
 
                        
 
Weighted average number of shares, basic
     18,425       17,990       18,216       17,974  
Dilutive effect of stock options
     1,248       826       1,193       482  
 
                        
Weighted average number of shares, diluted
     19,673       18,816       19,409       18,456  
 
                        

 

 

MEDCATH CORPORATION
SELECTED OPERATING DATA
(In thousands, except per share data and selected operating data)
(Unaudited)
                                                 
    Three Months Ended June 30,     Nine Months Ended June 30,  
    2005     2004     % Change     2005     2004     % Change  
Statement of Operations Data:
                                                
Net revenue
   $ 195,116     $ 176,165       10.8 %   $ 571,890     $ 499,968       14.4 %
Adjusted EBITDA (1)
   $ 26,488     $ 23,455       12.9 %   $ 79,261     $ 63,393       25.0 %
Income from operations
   $ 16,510     $ 12,220       35.1 %   $ 49,462     $ 31,476       57.1 %
Income from continuing operations
   $ 3,358     $ 2,454       36.8 %   $ 10,228     $ 6,933       47.5 %
Earnings per share from continuing operations, basic
   $ 0.18     $ 0.14       33.6 %   $ 0.56     $ 0.38       49.4 %
Earnings per share from continuing operations, diluted
   $ 0.17     $ 0.13       30.9 %   $ 0.53     $ 0.38       40.3 %
 
                                                
(1) See Supplemental Financial Disclosure—Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures.
 
                                                
    Three Months Ended June 30,     Nine Months Ended June 30,  
    2005     2004     % Change     2005     2004     % Change  
Selected Operating Data (consolidated) (a):
                                                
Number of hospitals
     11       11               11       11          
Licensed beds (b)
     672       672               672       672          
Staffed and available beds (c)
     631       601               631       601          
Admissions (d)
     11,345       10,774       5.3 %     33,947       30,985       9.6 %
Adjusted admissions (e)
     14,963       13,713       9.1 %     44,851       39,188       14.5 %
Patient days (f)
     39,232       36,460       7.6 %     118,893       108,119       10.0 %
Adjusted patient days (g)
     51,443       46,255       11.2 %     156,264       136,451       14.5 %
Average length of stay (days) (h)
     3.46       3.38       2.4 %     3.50       3.49       0.3 %
Occupancy (i)
     68.3 %     66.7 %             69.0 %     65.7 %        
Inpatient catheterization procedures
     6,028       5,764       4.6 %     17,727       15,871       11.7 %
Inpatient surgical procedures
     3,104       2,758       12.5 %     9,030       7,768       16.2 %
Hospital division revenue
   $ 181,068     $ 162,573       11.4 %   $ 530,541     $ 457,521       16.0 %
 
                                                
    Three Months Ended June 30,     Nine Months Ended June 30,  
    2005     2004     % Change     2005     2004     % Change  
Selected Operating Data (same facility) (a):
                                                
Number of hospitals
     11       11               9       9          
Licensed beds (b)
     672       672               580       580          
Staffed and available beds (c)
     631       601               547       531          
Admissions (d)
     11,345       10,774       5.3 %     30,414       29,797       2.1 %
Adjusted admissions (e)
     14,963       13,713       9.1 %     40,749       37,804       7.8 %
Patient days (f)
     39,232       36,460       7.6 %     106,099       104,247       1.8 %
Adjusted patient days (g)
     51,443       46,255       11.2 %     141,431       131,945       7.2 %
Average length of stay (days) (h)
     3.46       3.38       2.4 %     3.49       3.50       (0.3 )%
Occupancy (i)
     68.3 %     66.7 %             71.0 %     71.7 %        
Inpatient catheterization procedures
     6,028       5,764       4.6 %     15,259       14,992       1.8 %
Inpatient surgical procedures
     3,104       2,758       12.5 %     8,171       7,489       9.1 %
Hospital division revenue
   $ 181,068     $ 162,573       11.4 %   $ 469,272     $ 436,131       7.6 %
(a)   Selected operating data includes consolidated hospitals 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. Same facility for the nine months ended June 30, 2005 excludes the results of Texsan Heart Hospital and Heart Hospital of Lafayette.
(b)   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.
(c)   Staffed and available beds represent the number of beds that are readily available for patient use at the end of the period.
(d)   Admissions represent the number of patients admitted for inpatient treatment.
(e)   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.
(f)   Patient days represent the total number of days of care provided to inpatients.
(g)   Adjusted patient days is a general measure of combined inpatient and outpatient days. We computed adjusted patient days by dividing gross patient revenue by gross inpatient revenue and then multiplying the quotient by patient days.
(h)   Average length of stay (days) represents the average number of days inpatients stay in our hospitals.
(i)   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.

 

 

MEDCATH CORPORATION
SUPPLEMENTAL FINANCIAL DISCLOSURE — RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES
(Unaudited)
     The following table reconciles Adjusted EBITDA with MedCath’s income from continuing operations as derived directly from MedCath’s consolidated financial statements for the three and nine months ended June 30, 2005 and 2004.
                                 
    Three Months Ended June 30,     Nine Months Ended June 30,  
    2005     2004     2005     2004  
            (in thousands)          
Income from continuing operations
   $ 3,358     $ 2,454     $ 10,228     $ 6,933  
Add:
                                
Income tax expense
     2,528       1,169       7,107       3,978  
Minority interest share of earnings of consolidated subsidiaries
     3,956       2,852       12,357       3,878  
Equity in net earnings of unconsolidated affiliates
     (899 )     (900 )     (2,554 )     (2,624 )
Interest and other income, net
     (887 )     (218 )     (1,903 )     (614 )
Interest expense
     8,454       6,863       24,227       19,925  
Loss (gain) on disposal of property, equipment and other assets
     171       24       245       (27 )
Amortization
     290       290       870       870  
Depreciation
     9,517       10,921       28,684       31,074  
 
                        
Adjusted EBITDA
   $ 26,488     $ 23,455     $ 79,261     $ 63,393