EX-99.4 5 g04178exv99w4.htm EX-99.4 THE SECTION OF THE CONFIDENTIAL INFORMATION MEMORANDUM ENTITLED "HISTORICAL FINANCIAL INFORMATION - ALTERNATIVE BEHAVIORAL SERVICES, INC." Ex-99.4
 

Exhibit 99.4
Alternative Behavioral Services, Inc. (ABS)
     The following historical financial results of Alternative Behavioral Services are unaudited, preliminary and subject to change upon completion of an audit.
     HISTORICAL FINANCIAL RESULTS — ABS
(in thousands)
                                         
    Twelve months ended     Nine months ended        
    December 31,     September 30,        
                                    LTM  
    2004     2005     2005     2006     9/30/06  
Revenue
     179,534       190,336       142,007       151,560       199,889  
 
                                        
Operating and administrative expenses
     163,342       178,523       133,915       142,823       187,431  
Depreciation and amortization
     3,638       4,139       3,099       2,911       3,951  
Impairment loss on assets held for sale
     1,969       —       —       —       —  
(Gain) Loss on disposals of property, plant and equipment
     (1,089 )     60       11       4       53  
 
                              
Operating expenses
     167,860       182,722       137,025       145,738       191,435  
Operating income
     11,674       7,614       4,982       5,822       8,454  
 
                                        
Non-operating income (expense)
                                        
Interest income
     137       93       79       48       62  
Interest allocation from parent
     (8,271 )     (14,986 )     (10,702 )     (12,355 )     (16,639 )
Interest expense
     (47 )     (1,171 )     (884 )     (656 )     (943 )
Equity in earnings of unconsolidated affiliate
     (112 )     —       —       —       —  
 
                              
Net loss before income taxes
     3,381       (8,450 )     (6,525 )     (7,141 )     (9,066 )
Income tax (provision) benefit
     (1,153 )     5,209       3,458       2,209       3,960  
 
                              
Net income (loss)
     2,228       (3,241 )     (3,067 )     (4,932 )     (5,106 )
 
                              

 

ALTERNATIVE BEHAVIORAL SERVICES, INC.
RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA (UNAUDITED)
(in thousands)
                                         
    Twelve months ended     Nine months ended        
    December 31,     September 30,        
                                    LTM  
    2004     2005     2005     2006     9/30/06  
Net income (loss)
     2,228       (3,241 )     (3,067 )     (4,932 )     (5,106 )
Income tax provision (benefit)
     1,153       (5,209 )     (3,458 )     (2,209 )     (3,960 )
Depreciation and amortization
     3,638       4,139       3,099       2,911       3,951  
Net interest expense
     8,181       16,064       11,507       12,963       17,520  
 
                              
EBITDA (a)
     15,200       11,753       8,081       8,733       12,405  
Other expenses:
                                        
Management fee to parent
     1,915       2,099       1,592       876       1,383  
Impairment loss on assets held for sale
     1,969       —       —       —       —  
Equity in earnings of unconsolidated affiliate
     112       —       —       —       —  
(Gain) Loss on disposals of property, plant and equipment
     (1,089 )     60       11       4       53  
 
                              
Total other expenses
     2,907       2,159       1,603       880       1,436  
 
                              
Adjusted EBITDA (a)
     18,107       13,912       9,684       9,613       13,841  
 
                              
(a) EBITDA and adjusted EBITDA are non-GAAP financial measures. EBITDA is defined as income from continuing operations before interest expense (net of interest income), income taxes, depreciation and amortization. Adjusted EBITDA is defined as income from continuing operations before interest expense (net of interest income), income taxes, depreciation, amortization, stock compensation and other items included in the caption above labeled “Other expenses”. These other expenses may occur in future periods but the amounts recognized can vary significantly from period to period and do not directly relate to the ongoing operations of our health care facilities. PSI’s management relies on EBITDA and adjusted EBITDA as the primary measures to review and assess operating performance of its facilities and their management teams. PSI believes it is useful to investors to provide disclosures of its operating results on the same basis as that used by management. Management and investors also review EBITDA and adjusted EBITDA to evaluate PSI’s overall performance and to compare PSI’s current operating results with corresponding periods and with other companies in the health care industry. You should not consider EBITDA and adjusted EBITDA in isolation or as a substitute for net income, operating cash flows or other cash flow statement data determined in accordance with accounting principles generally accepted in the United States. Because EBITDA and adjusted EBITDA are not measures of financial performance under accounting principles generally accepted in the United States and are susceptible to varying calculations, they may not be comparable to similarly titled measures of other companies.