EX-99.2 3 g07246k1exv99w2.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 March 31,     Six Months Ended March 31,  
    2007     2006     2007     2006  
Net revenue
   $ 192,491     $ 183,270     $ 368,040     $ 346,883  
Operating expenses:
                                
Personnel expense
     61,356       65,023       118,531       117,516  
Medical supplies expense
     50,649       51,671       98,819       97,865  
Bad debt expense
     15,445       15,555       29,276       28,610  
Other operating expenses
     37,323       35,385       73,788       71,173  
Depreciation
     8,772       8,647       17,641       17,205  
Amortization
     127       252       379       504  
Loss (gain) on disposal of property, equipment and other assets
     802       (38 )     859       59  
 
                        
Total operating expenses
     174,474       176,495       339,293       332,932  
 
                        
Income from operations
     18,017       6,775       28,747       13,951  
Other income (expenses):
                                
Interest expense
     (5,768 )     (8,384 )     (13,226 )     (16,305 )
Loss on early extinguishment of debt
     (662 )     (364 )     (5,142 )     (1,370 )
Interest and other income, net
     1,808       1,336       4,533       2,733  
Equity in net earnings of unconsolidated affiliates
     1,482       1,410       2,920       2,475  
 
                        
Total other expenses, net
     (3,140 )     (6,002 )     (10,915 )     (12,467 )
 
                        
Income from continuing operations before minority interest, income taxes and discontinued operations
     14,877       773       17,832       1,484  
Minority interest share of earnings of consolidated subsidiaries
     (3,960 )     (4,790 )     (6,440 )     (7,608 )
 
                        
Income (loss) from continuing operations before income taxes and discontinued operations
     10,917       (4,017 )     11,392       (6,124 )
Income tax expense (benefit)
     5,106       (1,609 )     5,327       (2,451 )
 
                        
Income (loss) from continuing operations
     5,811       (2,408 )     6,065       (3,673 )
Income (loss) from discontinued operations, net of taxes
     439       468       (4,711 )     400  
 
                        
Net income (loss)
   $ 6,250     $ (1,940 )   $ 1,354     $ (3,273 )
 
                        
 
                                
Earnings (loss) per share, basic
                                
Continuing operations
   $ 0.28     $ (0.13 )   $ 0.30     $ (0.20 )
Discontinued operations
   $ 0.02       0.03     $ (0.23 )     0.02  
 
                        
Earnings (loss) per share, basic
   $ 0.30     $ (0.10 )   $ 0.07     $ (0.18 )
 
                        
 
                                
Earnings (loss) per share, diluted
                                
Continuing operations
   $ 0.27     $ (0.13 )   $ 0.29     $ (0.20 )
Discontinued operations
   $ 0.02       0.03     $ (0.23 )     0.02  
 
                        
Earnings (loss) per share, diluted
   $ 0.29     $ (0.10 )   $ 0.06     $ (0.18 )
 
                        
 
                                
Weighted average number of shares, basic
     21,019       18,618       20,568       18,559  
Dilutive effect of stock options and restricted stock
     625       —       634       —  
 
                        
Weighted average number of shares, diluted
     21,644       18,618       21,202       18,559  
 
                        

 

 

MEDCATH CORPORATION
SELECTED OPERATING DATA
(In thousands, except per share data and selected operating data)
(Unaudited)
                                                 
    Three Months Ended March 31,     Six Months Ended March 31,  
    2007     2006     % Change     2007     2006     % Change  
Statement of Operations Data:
                                                
Net revenue
   $ 192,491     $ 183,270       5.0 %   $ 368,040     $ 346,883       6.1 %
Adjusted EBITDA (1)
   $ 29,841     $ 25,842       15.5 %   $ 50,775     $ 42,342       19.9 %
Income from operations
   $ 18,017     $ 6,775       165.9 %   $ 28,747     $ 13,951       106.1 %
Income (loss) from continuing operations
   $ 5,811     $ (2,408 )     341.3 %   $ 6,065     $ (3,673 )     265.1 %
Earnings (loss) per share from continuing operations, basic
   $ 0.28     $ (0.13 )     315.4 %   $ 0.30     $ (0.20 )     250.0 %
Earnings (loss) per share from continuing operations, diluted
   $ 0.27     $ (0.13 )     307.7 %   $ 0.29     $ (0.20 )     245.0 %
(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,  
    2007     2006     % Change     2007     2006     % Change  
Selected Operating Data (a):
                                                
Number of hospitals
     9       9               9       9          
Licensed beds ( b )
     580       580               580       580          
Staffed and available beds ( c )
     559       568               559       568          
Admissions ( d )
     10,674       10,904       (2.1 )%     20,404       20,809       (1.9 )%
Adjusted admissions ( e )
     14,508       14,081       3.0 %     27,844       26,977       3.2 %
Patient days ( f )
     36,961       36,874       0.2 %     71,050       70,156       1.3 %
Adjusted patient days ( g )
     50,011       47,748       4.7 %     96,505       90,941       6.1 %
Average length of stay (days) ( h )
     3.46       3.38       2.4 %     3.48       3.37       3.3 %
Occupancy ( i )
     73.5 %     72.1 %             69.8 %     67.9 %        
Inpatient catheterization procedures (j)
     5,354       5,653       (5.3 )%     10,212       10,588       (3.6 )%
Inpatient surgical procedures (k)
     2,727       2,824       (3.4 )%     5,265       5,334       (1.3 )%
Hospital net revenue
   $ 177,944     $ 168,055       5.9 %   $ 339,002     $ 317,469       6.8 %
(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.
 
(j)   Inpatient catheterization procedures represent the number of inpatients with a procedure performed in one of the hospitals’ catheterization labs during the period.
 
(k)   Inpatient surgical procedures represent the number of surgical procedures performed on inpatients during the period.

 

 

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 six months ended March 31, 2007 and 2006.
                                 
    Three Months Ended March 31,     Six Months Ended March 31,  
    2007     2006     2007     2006  
            (in thousands)          
Income (loss) from continuing operations
   $ 5,811     $ (2,408 )   $ 6,065     $ (3,673 )
Add:
                                
Income tax expense (benefit)
     5,106       (1,609 )     5,327       (2,451 )
Minority interest share of earnings of consolidated subsidiaries
     3,960       4,790       6,440       7,608  
Equity in net earnings of unconsolidated affiliates
     (1,482 )     (1,410 )     (2,920 )     (2,475 )
Interest and other income, net
     (1,808 )     (1,336 )     (4,533 )     (2,733 )
Interest expense
     5,768       8,384       13,226       16,305  
Loss on early extinguishment of debt
     662       364       5,142       1,370  
Loss (gain) on disposal of property, equipment and other assets
     802       (38 )     859       59  
Amortization
     127       252       379       504  
Depreciation
     8,772       8,647       17,641       17,205  
Share-based compensation expense
     2,123       10,206       3,149       10,623  
 
                        
Adjusted EBITDA
   $ 29,841     $ 25,842     $ 50,775     $ 42,342