EX-99.2 3 g05433exv99w2.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  
    December 31,  
    2006     2005  
Net revenue
   $ 175,549     $ 163,613  
Operating expenses:
                
Personnel expense
     57,175       52,493  
Medical supplies expense
     48,170       46,194  
Bad debt expense
     13,831       13,055  
Other operating expenses
     36,465       35,789  
Depreciation
     8,869       8,557  
Amortization
     252       252  
Loss on disposal of property, equipment and other assets
     57       97  
 
            
Total operating expenses
     164,819       156,437  
 
            
Income from operations
     10,730       7,176  
Other income (expenses):
                
Interest expense
     (7,458 )     (7,921 )
Loss on early extinguishment of debt
     (4,480 )     (1,006 )
Interest and other income, net
     2,725       1,397  
Equity in net earnings of unconsolidated affiliates
     1,438       1,065  
 
            
Total other expenses, net
     (7,775 )     (6,465 )
 
            
Income from continuing operations before minority interest, income taxes and discontinued operations
     2,955       711  
Minority interest share of earnings of consolidated subsidiaries
     (2,480 )     (2,818 )
 
            
Income (loss) from continuing operations before income taxes and discontinued operations
     475       (2,107 )
Income tax expense (benefit)
     221       (842 )
 
            
Income (loss) from continuing operations
     254       (1,265 )
Loss from discontinued operations, net of taxes
     (5,150 )     (68 )
 
            
Net loss
   $ (4,896 )   $ (1,333 )
 
            
 
                
Earnings (loss) per share, basic
                
Continuing operations
   $ 0.01     $ (0.07 )
Discontinued operations
     (0.25 )     —  
 
            
Loss per share, basic
   $ (0.24 )   $ (0.07 )
 
            
 
                
Earnings (loss) per share, diluted
                
Continuing operations
   $ 0.01     $ (0.07 )
Discontinued operations
     (0.25 )     —  
 
            
Loss per share, diluted
   $ (0.24 )   $ (0.07 )
 
            
 
                
Weighted average number of shares, basic
     20,121       18,501  
Dilutive effect of stock options and restricted stock
     —       —  
Weighted average number of shares, diluted
     20,121       18,501  
 
            

 

 

MEDCATH CORPORATION
SELECTED OPERATING DATA
(In thousands, except per share data and selected operating data)
(Unaudited)
                         
    Three Months Ended December 31,  
    2006     2005     % Change  
Statement of Operations Data:
                        
Net revenue
   $ 175,549     $ 163,613       7.3 %
Adjusted EBITDA (1)
   $ 20,934     $ 16,500       26.9 %
Income from operations
   $ 10,730     $ 7,176       49.5 %
Income (loss) from continuing operations
   $ 254     $ (1,265 )     120.1 %
Earnings per share from continuing operations, basic
   $ 0.01     $ (0.07 )     114.3 %
Earnings per share from continuing operations, diluted
   $ 0.01     $ (0.07 )     114.3 %
(1)   See Supplemental Financial Disclosure — Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures.
                         
    Three Months Ended December 31,  
    2006     2005     % Change  
Selected Operating Data (a):
                        
Number of hospitals
     9       9          
Licensed beds (b)
     580       580          
Staffed and available beds (c)
     563       578          
Admissions (d)
     9,730       9,905       (1.8 )%
Adjusted admissions (e)
     13,345       12,899       3.5 %
Patient days (f)
     34,089       33,282       2.4 %
Adjusted patient days (g)
     46,520       43,215       7.6 %
Average length of stay (days) (h)
     3.50       3.36       4.2 %
Occupancy (i)
     65.8 %     62.6 %        
Inpatient catheterization procedures
     4,858       4,935       (1.6 )%
Inpatient surgical procedures
     2,516       2,517       (0.0 )%
Hospital net revenue
   $ 161,058     $ 149,414       7.8 %
(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)   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 volume. 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 months ended December 31, 2006 and 2005.
                 
    Three Months Ended December 31,  
    2006     2005  
    (in thousands)  
Income (loss) from continuing operations
   $ 254     $ (1,265 )
Add:
                
Income tax expense (benefit)
     221       (842 )
Minority interest share of earnings of consolidated subsidiaries
     2,480       2,818  
Equity in net earnings of unconsolidated affiliates
     (1,438 )     (1,065 )
Interest and other income, net
     (2,725 )     (1,397 )
Interest expense
     7,458       7,921  
Loss on early extinguishment of debt
     4,480       1,006  
Loss on disposal of property, equipment and other assets
     57       97  
Amortization
     252       252  
Depreciation
     8,869       8,557  
Share-based compensation expense
     1,026       418  
 
            
Adjusted EBITDA
   $ 20,934     $ 16,500