EX-99.2 3 g17517exv99w2.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 December 31,  
    2008     2007  
 
                
Net revenue
   $ 153,103     $ 146,695  
Operating expenses:
                
Personnel expense
     50,656       50,384  
Medical supplies expense
     42,651       38,742  
Bad debt expense
     11,393       11,285  
Other operating expenses
     32,235       29,016  
Pre-opening expenses
     207       248  
Depreciation
     7,835       7,341  
Amortization
     149       127  
Loss on disposal of property, equipment and other assets
     73       28  
 
            
Total operating expenses
     145,199       137,171  
 
            
Income from operations
     7,904       9,524  
Other income (expenses):
                
Interest expense
     (2,857 )     (3,931 )
Loss on early extinguishment of debt
     (6,961 )     —  
Interest and other income, net
     100       1,158  
Equity in net earnings of unconsolidated affiliates
     2,065       2,025  
 
            
Total other expenses, net
     (7,653 )     (748 )
 
            
Income from continuing operations before minority interest and income taxes
     251       8,776  
Minority interest share of earnings of consolidated subsidiaries
     (2,776 )     (4,137 )
 
            
Income from continuing operations before income taxes
     (2,525 )     4,639  
Income tax (benefit)/expense
     (909 )     2,348  
 
            
(Loss)/income from continuing operations
     (1,616 )     2,291  
Income from discontinued operations, net of taxes
     3,862       773  
 
            
Net income
   $ 2,246     $ 3,064  
 
            
 
                
Earnings (loss) per share, basic
                
Continuing operations
   $ (0.08 )   $ 0.11  
Discontinued operations
     0.19       0.03  
 
            
Earnings (loss) per share, basic
   $ 0.11     $ 0.14  
 
            
 
                
Earnings (loss) per share, diluted
                
Continuing operations
   $ (0.08 )   $ 0.11  
Discontinued operations
     0.19       0.03  
 
            
Earnings (loss) per share, diluted
   $ 0.11     $ 0.14  
 
            
 
                
Weighted average number of shares, basic
     19,599       21,028  
Dilutive effect of stock options and restricted stock
     —       263  
 
            
Weighted average number of shares, diluted
     19,599       21,291  
 
            

 

 

MEDCATH CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
                 
    December 31,     September 30,  
    2008     2008  
    (Unaudited)          
 
                
Current assets:
                
Cash and cash equivalents
   $ 56,912     $ 93,836  
Restricted cash
     3,163       3,154  
Accounts receivable, net
     86,572       83,875  
Income tax receivable, net
     1,696       3,091  
Medical supplies
     17,838       15,479  
Deferred income tax assets
     9,978       9,769  
Prepaid expenses and other current assets
     10,439       9,796  
Current assets of discontinued operations
     12,770       20,776  
 
            
Total current assets
     199,368       239,776  
Property and equipment, net
     341,942       323,729  
Investments in affiliates
     10,742       15,285  
Goodwill
     60,174       60,174  
Other intangible assets, net
     5,914       6,063  
Other assets
     9,748       8,378  
Long-term assets of discontinued operations
     —       51  
 
            
Total assets
   $ 627,888     $ 653,456  
 
            
 
                
Current liabilities:
                
Accounts payable
   $ 42,128     $ 41,642  
Accrued compensation and benefits
     17,283       16,872  
Other accrued liabilities
     21,080       24,054  
Current portion of long-term debt and obligations under capital leases
     15,341       31,920  
Current liabilities of discontinued operations
     9,510       10,184  
 
            
Total current liabilities
     105,342       124,672  
Long-term debt
     115,578       115,628  
Obligations under capital leases
     1,956       2,087  
Deferred income tax liabilities
     12,276       12,352  
Other long-term obligations
     4,425       4,454  
 
            
Total liabilities
     239,577       259,193  
 
                
Minority interest in equity of consolidated subsidiaries
     15,880       24,667  
 
                
Stockholders’ equity:
                
Preferred stock, $0.01 par value, 10,000,000 shares authorized; none issued
     —       —  
Common stock, $0.01 par value, 50,000,000 shares authorized; 21,588,880 issued and 19,634,519 outstanding at December 31, 2008; 21,553,054 issued and 19,598693 outstanding at September 30, 2008
     216       216  
Paid-in capital
     456,531       455,494  
Accumulated deficit
     (38,892 )     (41,138 )
Accumulated other comprehensive loss
     (627 )     (179 )
Treasury stock, at cost;
                
1,954,361 shares at December 31, 2008
                
1,954,361 shares at September 30, 2008
     (44,797 )     (44,797 )
 
            
Total stockholders’ equity
     372,431       369,596  
 
            
Total liabilities and stockholders’ equity
   $ 627,888     $ 653,456  
 
            

 

 

MEDCATH CORPORATION
SELECTED OPERATING DATA
(In thousands, except per share data and selected operating data)
(Unaudited)
                         
    Three Months Ended December 31,
    2008   2007   % Change
 
                        
Statement of Operations Data:
                        
Net revenue
   $ 153,103     $ 146,695       4.4 %
Adjusted EBITDA (1)
   $ 17,166     $ 20,977       (18.2 )%
Income from operations
   $ 7,904     $ 9,524       (17.0 )%
(Loss)/income from continuing operations
   $ (1,616 )   $ 2,291       (170.5 )%
Earnings (loss) per share from continuing operations, basic
   $ (0.08 )   $ 0.11       (172.7 )%
Earnings (loss) per share from continuing operations, diluted
   $ (0.08 )   $ 0.11       (172.7 )%
 
(1)   See Supplemental Financial Disclosure—Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures.
                         
    Three Months Ended December 31,
    2008   2007   % Change
Selected Operating Data (a):
                        
Number of hospitals
     7       7          
Licensed beds (c)
     509       421          
Staffed and available beds (d)
     463       404          
Admissions (e)
     6,757       7,150       (5.5 )%
Adjusted admissions (f)
     9,874       9,829       0.5 %
Patient days (g)
     25,181       25,460       (1.1 )%
Adjusted patient days (h)
     37,044       35,144       5.4 %
Average length of stay (days) (i)
     3.73       3.56       4.8 %
Occupancy (j)
     59.1 %     68.5 %        
Inpatient catheterization procedures (k)
     3,552       4,049       (12.3 )%
Inpatient surgical procedures (l)
     2,001       1,947       2.8 %
Hospital net revenue
   $ 144,225     $ 137,151       5.2 %
 
                        
Combined Operating Data (b):
                        
Number of hospitals
     9       9          
Licensed beds (c)
     676       588          
Staffed and available beds (d)
     628       567          
Admissions (e)
     9,740       9,769       (0.3 )%
Adjusted admissions (f)
     14,622       14,167       3.2 %
Patient days (g)
     34,189       33,725       1.4 %
Adjusted patient days (h)
     51,162       48,482       5.5 %
Average length of stay (days) (i)
     3.51       3.45       1.7 %
Occupancy (j)
     59.2 %     64.7 %        
Inpatient catheterization procedures (k)
     4,385       4,776       (8.2 )%
Inpatient surgical procedures (l)
     2,622       2,686       (2.4 )%
Hospital net revenue
   $ 185,023     $ 176,706       4.7 %
 
(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)   Combined operating data includes hospitals in operation as of the end of the period reported in continuing operations including hospitals which are accounted for using the equity method in our consolidated financial statements.
 
(c)   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.
 
(d)   Staffed and available beds represent the number of beds that are readily available for patient use at the end of the period.
 
(e)   Admissions represent the number of patients admitted for inpatient treatment.
 
(f)   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.
 
(g)   Patient days represent the total number of days of care provided to inpatients.
 
(h)   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.
 
(i)   Average length of stay (days) represents the average number of days inpatients stay in our hospitals.
 
(j)   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.
 
(k)   Inpatients with a catheterization procedure represent the number of inpatients with a procedure performed in one of the hospitals’ catheterization labs during the period.
 
(l)   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 unaudited consolidated financial statements for the three months ended December 31, 2008 and 2007.
                 
    Three Months Ended December 31,  
    2008     2007  
    (in thousands)  
(Loss)/income from continuing operations
   $ (1,616 )   $ 2,291  
Add:
                
Income tax expense
     (909 )     2,348  
Minority interest share of earnings of consolidated subsidiaries
     2,776       4,137  
Equity in net earnings of unconsolidated affiliates
     (2,065 )     (2,025 )
Interest and other income, net
     (100 )     (1,158 )
Loss on early extinguishment of debt
     6,961       —  
Interest expense
     2,857       3,931  
Loss on disposal of property, equipment and other assets
     73       28  
Amortization
     149       127  
Depreciation
     7,835       7,341  
Pre-opening expenses
     207       248  
Share-based compensation expense
     998       3,709  
 
            
Adjusted EBITDA
   $ 17,166     $ 20,977