EX-99.2 3 g04424k1exv99w2.htm EXHIBIT 99.2 Exhibit 99.2
 

Exhibit 99.2
MEDCATH CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
                                 
    Three Months Ended September 30,     Twelve Months Ended September 30,  
    2006     2005     2006     2005  
Net revenue
   $ 177,444     $ 167,881     $ 706,374     $ 672,001  
Operating expenses:
                                
Personnel expense
     55,472       52,603       228,350       205,469  
Medical supplies expense
     47,684       46,458       196,046       189,953  
Bad debt expense
     14,395       13,348       56,845       48,220  
Other operating expenses
     35,008       33,426       141,498       135,618  
Depreciation
     8,863       9,766       34,792       34,862  
Amortization
     252       290       1,008       1,160  
(Gain) loss on disposal of property, equipment and other assets
     95       (824 )     (142 )     (646 )
Impairment of long-lived assets
     7       2,662       458       2,662  
 
                        
Total operating expenses
     161,776       157,729       658,855       617,298  
 
                        
Income from operations
     15,668       10,152       47,519       54,703  
Other income (expenses):
                                
Interest expense
     (7,952 )     (8,324 )     (33,210 )     (31,832 )
Interest and other income, net
     2,029       1,167       7,733       3,018  
Equity in net earnings of unconsolidated affiliates
     1,036       802       4,919       3,356  
 
                        
Total other expenses, net
     (4,887 )     (6,355 )     (20,558 )     (25,458 )
 
                        
Income from continuing operations before minority interest, income taxes and discontinued operations
     10,781       3,797       26,961       29,245  
Minority interest share of earnings of consolidated subsidiaries
     (3,171 )     (3,611 )     (15,521 )     (15,968 )
 
                        
Income from continuing operations before income taxes and discontinued operations
     7,610       186       11,440       13,277  
Income tax expense
     3,120       275       4,729       5,643  
 
                        
Income (loss) from continuing operations
     4,490       (89 )     6,711       7,634  
Income (loss) from discontinued operations, net of taxes
     6,449       (2,212 )     5,865       1,157  
 
                        
Net income (loss)
   $ 10,939     $ (2,301 )   $ 12,576     $ 8,791  
 
                        
 
                                
Earnings (loss) per share, basic
                                
Continuing operations
   $ 0.24     $ —     $ 0.36     $ 0.42  
Discontinued operations
     0.34       (0.12 )     0.31       0.06  
 
                        
Earnings (loss) per share, basic
   $ 0.58     $ (0.12 )   $ 0.67     $ 0.48  
 
                        
 
                                
Earnings (loss) per share, diluted
                                
Continuing operations
   $ 0.23     $ —     $ 0.34     $ 0.39  
Discontinued operations
     0.32       (0.12 )     0.30       0.06  
 
                        
Earnings (loss) per share, diluted
   $ 0.55     $ (0.12 )   $ 0.64     $ 0.45  
 
                        
 
                                
Weighted average number of shares, basic
     18,872       18,493       18,656       18,286  
Dilutive effect of stock options and restricted stock
     1,037       —       899       1,184  
 
                        
Weighted average number of shares, diluted
     19,909       18,493       19,555       19,470  
 
                        

 

 

MEDCATH CORPORATION
SELECTED OPERATING DATA
(In thousands, except per share data and selected operating data)
(Unaudited)
                                                 
    Three Months Ended September 30,     Twelve Months Ended September 30,  
    2006     2005     % Change     2006     2005     % Change  
Statement of Operations Data:
                                                
Net revenue
   $ 177,444     $ 167,881       5.7 %   $ 706,374     $ 672,001       5.1 %
Adjusted EBITDA (1)
   $ 25,727     $ 23,514       9.4 %   $ 96,857     $ 94,209       2.8 %
Income from operations
   $ 15,668     $ 10,152       54.3 %   $ 47,519     $ 54,703       (13.1 )%
Income (loss) from continuing operations
   $ 4,490     $ (89 )     5144.9 %   $ 6,711     $ 7,634       (12.1 )%
Earnings per share from continuing operations, basic
   $ 0.24     $ —       100.0 %   $ 0.36     $ 0.42       (14.3 )%
Earnings per share from continuing operations, diluted
   $ 0.23     $ —       100.0 %   $ 0.34     $ 0.39       (12.8 )%
(1)   See Supplemental Financial Disclosure—Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures.
                                                 
    Three Months Ended September 30,     Twelve Months Ended September 30,  
    2006     2005     % Change     2006     2005     % Change  
Selected Operating Data (consolidated) (a):
                                                
Number of hospitals
     9       9               9       9          
Licensed beds (b)
     580       580               580       580          
Staffed and available beds (c)
     563       546               563       546          
Admissions (d)
     9,991       10,021       (0.3 )%     41,406       39,876       3.8 %
Adjusted admissions (e)
     13,356       13,102       1.9 %     54,186       51,942       4.3 %
Patient days (f)
     32,258       33,598       (4.0 )%     136,532       139,115       (1.9 )%
Adjusted patient days (g)
     43,018       43,614       (1.4 )%     178,667       180,248       (0.9 )%
Average length of stay (days) (h)
     3.23       3.35       (3.6 )%     3.30       3.49       (5.4 )%
Occupancy (i)
     62.3 %     66.9 %             66.4 %     69.8 %        
Inpatient catheterization procedures
     5,032       5,335       (5.7 )%     21,163       20,760       1.9 %
Inpatient surgical procedures
     2,671       2,680       (0.3 )%     10,911       10,815       0.9 %
Hospital net revenue
   $ 163,867     $ 154,122       6.3 %   $ 648,898     $ 615,991       5.3 %
(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 (loss) from continuing operations as derived directly from MedCath’s consolidated financial statements for the three and twelve months ended September 30, 2006 and 2005.
                                 
    Three Months Ended September 30,     Twelve Months Ended September 30,  
    2006     2005     2006     2005  
            (in thousands)          
Income (loss) from continuing operations
   $ 4,490     $ (89 )   $ 6,711     $ 7,634  
Add:
                                
Income tax expense
     3,120       275       4,729       5,643  
Minority interest share of earnings of consolidated subsidiaries
     3,171       3,611       15,521       15,968  
Equity in net earnings of unconsolidated affiliates
     (1,036 )     (802 )     (4,919 )     (3,356 )
Interest and other income, net
     (2,029 )     (1,167 )     (7,733 )     (3,018 )
Interest expense
     7,952       8,324       33,210       31,832  
Impairment of long-lived assets
     7       2,662       458       2,662  
(Gain) loss on disposal of property, equipment and other assets
     95       (824 )     (142 )     (646 )
Amortization
     252       290       1,008       1,160  
Depreciation
     8,863       9,766       34,792       34,862  
Share-based compensation expense
     842       1,468       13,222       1,468  
 
                        
Adjusted EBITDA
   $ 25,727     $ 23,514     $ 96,857     $ 94,209