EX-99.2 3 g08665kexv99w2.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,  
    2007     2006     2007     2006  
Net revenue
   $ 192,278     $ 182,047     $ 560,319     $ 528,930  
Operating expenses:
                                
Personnel expense
     59,338       55,362       177,869       172,878  
Medical supplies expense
     50,310       50,497       149,129       148,362  
Bad debt expense
     15,881       13,840       45,157       42,450  
Other operating expenses
     37,650       35,316       111,439       106,489  
Depreciation
     8,629       8,725       26,270       25,930  
Amortization
     126       252       505       756  
Loss (gain) on disposal of property, equipment and other assets
     188       (296 )     1,047       (237 )
Impairment of long-lived assets
     —       451       —       451  
 
                        
Total operating expenses
     172,122       164,147       511,416       497,079  
 
                        
Income from operations
     20,156       17,900       48,903       31,851  
Other income (expenses):
                                
Interest expense
     (5,224 )     (7,583 )     (18,450 )     (23,888 )
Loss on early extinguishment of debt
     —       —       (5,142 )     (1,370 )
Interest and other income, net
     1,752       2,971       6,285       5,704  
Equity in net earnings of unconsolidated affiliates
     1,175       1,408       4,095       3,883  
 
                        
Total other expenses, net
     (2,297 )     (3,204 )     (13,212 )     (15,671 )
 
                        
Income from continuing operations before minority interest, income taxes and discontinued operations
     17,859       14,696       35,691       16,180  
Minority interest share of earnings of consolidated subsidiaries
     (3,914 )     (4,742 )     (10,354 )     (12,350 )
 
                        
Income from continuing operations before income taxes and discontinued operations
     13,945       9,954       25,337       3,830  
Income tax expense
     5,315       4,060       10,642       1,609  
 
                        
Income from continuing operations
     8,630       5,894       14,695       2,221  
Income (loss) from discontinued operations, net of taxes
     635       (984 )     (4,076 )     (584 )
 
                        
Net income
   $ 9,265     $ 4,910     $ 10,619     $ 1,637  
 
                        
 
                                
Earnings (loss) per share, basic
                                
Continuing operations
   $ 0.41     $ 0.31     $ 0.70     $ 0.11  
Discontinued operations
     0.03       (0.05 )     (0.19 )     (0.03 )
 
                        
Earnings (loss) per share, basic
   $ 0.44     $ 0.26     $ 0.51     $ 0.08  
 
                        
 
                                
Earnings (loss) per share, diluted
                                
Continuing operations
   $ 0.39     $ 0.30     $ 0.69     $ 0.11  
Discontinued operations
     0.03       (0.05 )     (0.19 )     (0.03 )
 
                        
Earnings (loss) per share, diluted
   $ 0.42     $ 0.25     $ 0.50     $ 0.08  
 
                        
 
                                
Weighted average number of shares, basic
     21,144       18,630       20,760       18,583  
Dilutive effect of stock options and restricted stock
     682       661       650       921  
 
                        
Weighted average number of shares, diluted
     21,826       19,291       21,410       19,504  
 
                        

 

 

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,  
    2007     2006     % Change     2007     2006     % Change  
Statement of Operations Data:
                                                
Net revenue
   $ 192,278     $ 182,047       5.6 %   $ 560,319     $ 528,930       5.9 %
Adjusted EBITDA (1)
   $ 29,799     $ 28,788       3.5 %   $ 80,574     $ 71,131       13.3 %
Income from operations
   $ 20,156     $ 17,900       12.6 %   $ 48,903     $ 31,851       53.5 %
Income from continuing operations
   $ 8,630     $ 5,894       46.4 %   $ 14,695     $ 2,221       561.6 %
Earnings per share from continuing operations, basic
   $ 0.41     $ 0.31       32.3 %   $ 0.70     $ 0.11       536.4 %
Earnings per share from continuing operations, diluted
   $ 0.39     $ 0.30       30.0 %   $ 0.69     $ 0.11       527.3 %
 
                                                
(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,  
    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)
     563       563               563       563          
Admissions (d)
     10,339       10,606       (2.5 )%     30,740       31,415       (2.1 )%
Adjusted admissions (e)
     14,156       13,829       2.4 %     41,943       40,808       2.8 %
Patient days (f)
     34,291       34,131       0.5 %     105,601       104,287       1.3 %
Adjusted patient days (g)
     46,679       44,518       4.9 %     143,348       135,505       5.8 %
Average length of stay (days) (h)
     3.32       3.22       3.1 %     3.44       3.32       3.6 %
Occupancy (i)
     66.9 %     66.6 %             68.7 %     67.9 %        
Inpatients with a catheterization procedures (j)
     5,247       5,549       (5.4 )%     15,463       16,137       (4.2 )%
Inpatient surgical procedures (k)
     2,780       2,759       0.8 %     8,055       8,093       (0.5 )%
Hospital net revenue
   $ 180,135     $ 167,563       7.5 %   $ 519,137     $ 485,031       7.0 %
(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)   Inpatients with a catheterization procedure 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 from continuing operations as derived directly from MedCath’s consolidated financial statements for the three and nine months ended June 30, 2007 and 2006.
                                 
    Three Months Ended June 30,     Nine Months Ended June 30,  
    2007     2006     2007     2006  
    (in thousands)  
Income from continuing operations
   $ 8,630     $ 5,894     $ 14,695     $ 2,221  
Add:
                                
Income tax expense
     5,315       4,060       10,642       1,609  
Minority interest share of earnings of consolidated subsidiaries
     3,914       4,742       10,354       12,350  
Equity in net earnings of unconsolidated affiliates
     (1,175 )     (1,408 )     (4,095 )     (3,883 )
Interest and other income, net
     (1,752 )     (2,971 )     (6,285 )     (5,704 )
Loss on early extinguishment of debt
     —       —       5,142       1,370  
Interest expense
     5,224       7,583       18,450       23,888  
Impairment of long-lived assets
     —       451       —       451  
Loss (gain) on disposal of property, equipment and
     188       (296 )     1,047       (237 )
other assets Amortization
     126       252       505       756  
Depreciation
     8,629       8,725       26,270       25,930  
Share-based compensation expense
     700       1,756       3,849       12,380  
 
                        
Adjusted EBITDA
   $ 29,799     $ 28,788     $ 80,574     $ 71,131