EX-99.2 3 g02876exv99w2.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,  
    2006     2005     2006     2005  
Net revenue
   $ 189,832     $ 179,787     $ 554,156     $ 524,156  
Operating expenses:
                                
Personnel expense
     58,033       53,893       181,211       159,874  
Medical supplies expense
     52,657       51,047       154,735       148,813  
Bad debt expense
     14,228       13,874       44,405       36,063  
Other operating expenses
     37,916       36,286       114,123       107,316  
Depreciation
     9,366       9,034       27,801       27,214  
Amortization
     252       290       756       870  
Loss (gain) on disposal of property, equipment and other assets
     (296 )     148       (237 )     204  
Impairment of long-lived assets
     451       —       451       —  
 
                        
Total operating expenses
     172,607       164,572       523,245       480,354  
 
                        
Income from operations
     17,225       15,215       30,911       43,802  
Other income (expenses):
                                
Interest expense
     (7,870 )     (8,440 )     (25,828 )     (24,129 )
Interest and other income, net
     2,977       868       5,748       1,870  
Equity in net earnings of unconsolidated affiliates
     1,408       899       3,883       2,554  
 
                        
Total other expenses, net
     (3,485 )     (6,673 )     (16,197 )     (19,705 )
 
                        
Income from continuing operations before minority interest, income taxes and discontinued operations
     13,740       8,542       14,714       24,097  
Minority interest share of earnings of consolidated subsidiaries
     (4,742 )     (3,956 )     (12,350 )     (12,357 )
 
                        
Income from continuing operations before income taxes and discontinued operations
     8,998       4,586       2,364       11,740  
Income tax expense
     3,649       1,952       993       4,814  
 
                        
Income from continuing operations
     5,349       2,634       1,371       6,926  
Income (loss) from discontinued operations, net of taxes
     (439 )     115       266       4,166  
 
                        
Net income
   $ 4,910     $ 2,749     $ 1,637     $ 11,092  
 
                        
 
                                
Earnings (loss) per share, basic
                                
Continuing operations
   $ 0.28     $ 0.14     $ 0.07     $ 0.38  
Discontinued operations
     (0.02 )     0.01       0.01       0.23  
 
                        
Earnings per share, basic
   $ 0.26     $ 0.15     $ 0.08     $ 0.61  
 
                        
 
                                
Earnings (loss) per share, diluted
                                
Continuing operations
   $ 0.27     $ 0.13     $ 0.07     $ 0.36  
Discontinued operations
     (0.02 )     0.01       0.01       0.21  
 
                        
Earnings per share, diluted
   $ 0.25     $ 0.14     $ 0.08     $ 0.57  
 
                        
 
                                
Weighted average number of shares, basic
     18,630       18,425       18,583       18,216  
Dilutive effect of stock options and restricted stock
     661       1,248       921       1,193  
 
                        
Weighted average number of shares, diluted
     19,291       19,673       19,504       19,409  
 
                        

 

 

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,  
    2006     2005     % Change     2006     2005     % Change  
Statement of Operations Data:
                                                
Net revenue
   $ 189,832     $ 179,787       5.6 %   $ 554,156     $ 524,156       5.7 %
Adjusted EBITDA (1)
   $ 28,754     $ 24,687       16.5 %   $ 72,062     $ 72,090       (0.0 )%
Income from operations
   $ 17,225     $ 15,215       13.2 %   $ 30,911     $ 43,802       (29.4 )%
Income from continuing operations
   $ 5,349     $ 2,634       103.1 %   $ 1,371     $ 6,926       (80.2 )%
Earnings per share from continuing operations, basic
   $ 0.28     $ 0.14       100.0 %   $ 0.07     $ 0.38       (81.6 )%
Earnings per share from continuing operations, diluted
   $ 0.27     $ 0.13       107.7 %   $ 0.07     $ 0.36       (80.6 )%
 
                                                
(1) See Supplemental Financial Disclosure—Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures.
 
                                                
    Three Months Ended June 30,     Nine Months Ended June 30,  
    2006     2005     % Change     2006     2005     % Change  
Selected Operating Data (consolidated) (a):
                                                
Number of hospitals
     10       10               10       10          
Licensed beds (b)
     612       612               612       612          
Staffed and available beds (c)
     595       571               595       571          
Admissions (d)
     11,115       10,364       7.2 %     32,987       31,119       6.0 %
Adjusted admissions (e)
     14,494       13,555       6.9 %     42,822       40,349       6.1 %
Patient days (f)
     35,508       36,281       (2.1 )%     109,497       109,738       (0.2 )%
Adjusted patient days (g)
     46,318       47,202       (1.9 )%     142,178       141,677       0.4 %
Average length of stay (days) (h)
     3.19       3.50       (8.9 )%     3.32       3.53       (5.9 )%
Occupancy (i)
     65.6 %     69.8 %             67.4 %     70.4 %        
Inpatient catheterization procedures
     5,838       5,457       7.0 %     17,029       16,220       5.0 %
Inpatient surgical procedures
     2,920       2,915       0.2 %     8,702       8,495       2.4 %
 
(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.
 
(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 GAAP FINANCIAL MEASURES
TO NON-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, 2006 and 2005.
                                 
    Three Months Ended June 30,     Nine Months Ended June 30,  
    2006     2005     2006     2005  
            (in thousands)          
Income from continuing operations
   $ 5,349     $ 2,634     $ 1,371     $ 6,926  
Add:
                                
Income tax expense
     3,649       1,952       993       4,814  
Minority interest share of earnings of consolidated subsidiaries
     4,742       3,956       12,350       12,357  
Equity in net earnings of unconsolidated affiliates
     (1,408 )     (899 )     (3,883 )     (2,554 )
Interest and other income, net
     (2,977 )     (868 )     (5,748 )     (1,870 )
Interest expense
     7,870       8,440       25,828       24,129  
Impairment of long-lived assets
     451       —       451       —  
Loss (gain) on disposal of property, equipment and other assets
     (296 )     148       (237 )     204  
Amortization
     252       290       756       870  
Depreciation
     9,366       9,034       27,801       27,214  
Share-based compensation expense
     1,756       —       12,380       —  
 
                        
Adjusted EBITDA
   $ 28,754     $ 24,687     $ 72,062     $ 72,090