EX-99.1 CHARTER 2 r2005pr013006.htm KCI 4th Quarter Financial Results for 2005

Exhibit 99.1

 

Contacts:  Martin J. Landon – Investors
KCI
(210) 255-6494

Elliot Sloane – Media
Sloane & Company
(212) 446-1860

KINETIC CONCEPTS REPORTS
FOURTH QUARTER AND YEAR-END
FINANCIAL RESULTS FOR 2005

 

Fourth Quarter Highlights

      -  Net earnings increased 36% to $46.4 million
      -  Net earnings per diluted share increased 36% to $0.64 per share
      -  Total revenue increased 18% to $322.0 million
      -  U.S. V.A.C. revenue increased 24% to $194.4 million

2005 Full-Year Highlights

      -  Total revenue increased 22% to $1.21 billion
      -  U.S. V.A.C. revenue increased approximately 25% to $706.0 million
      -  Net earnings of $122.2 million, including litigation settlement expense, increased 27% over
         the prior year
      -  Net earnings per diluted share of $1.67, including litigation settlement expense, increased 271% over
         the prior year


San Antonio, Texas, January 30, 2006 – Kinetic Concepts, Inc. (NYSE: KCI) today reported fourth quarter 2005 total revenue of $322.0 million, an increase of 18% from the fourth quarter of 2004, and full-year 2005 total revenue of $1.21 billion, an increase of 22% over the prior year.  Excluding foreign currency exchange movements, total revenue for the fourth quarter and the full year 2005 increased 19% and 21%, respectively, compared to the corresponding periods of the prior year.


Net earnings for the fourth quarter of 2005 were $46.4 million, an increase of 36% over net earnings of $34.2 million for the same period one year ago.  For the year, net earnings were $122.2 million, a 27% increase over the prior year.  Earnings per diluted share for the fourth quarter of 2005 were $0.64, compared to net earnings per diluted share of $0.47 for the same period in the prior year.  For the year, the Company reported net earnings per diluted share of $1.67, including litigation settlement expense of $0.65 per share, compared to net earnings per diluted share of $0.45 for 2004, including expenses associated with stock offerings and debt prepayments of $1.22 per diluted share.


"During the fourth quarter, we continued to successfully execute on our plan to bring KCI’s proven V.A.C. therapy to patients in need,” stated Dennert O. Ware, President and Chief Executive Officer of KCI.  “We generated strong profits and cash flows during the period in spite of changes in the U.S. competitive environment, year-end budget constraints internationally and unfavorable currency movements.”


Revenue Recap – Fourth Quarter 2005

Domestic revenue for the fourth quarter of 2005 was $239.7 million, an increase of 19% from the prior-year period due to increased rental and sales volumes for V.A.C. wound healing devices and related disposables.  International revenue of $82.3 million increased 14% compared to the prior-year period.  Excluding the effects of foreign currency exchange movements, international revenue increased 19%, during the fourth quarter.


Worldwide V.A.C. revenue was $248.6 million for the fourth quarter of 2005, an increase of 25% from the prior-year period.  Foreign currency exchange movements negatively impacted worldwide V.A.C. revenue by 1%, compared to the fourth quarter of the prior year.  The growth in V.A.C. revenue stemmed from volume increases driven by our continued focus on marketing and selling efforts, which are raising customer awareness.


Worldwide surfaces revenue was $73.4 million for the fourth quarter of 2005, a decrease of 2% from the prior-year period.  Unfavorable currency exchange rate movements accounted for all of the fourth quarter 2004 surface revenue decrease.


Revenue Recap - Year Ended 2005


Domestic revenue for 2005 was $886.2 million, a 19% increase from 2004 due directly to increased rental and sales volumes for V.A.C. wound healing devices and related disposables.  International revenue of $322.4 million increased 30% compared to 2004 due primarily to higher V.A.C. unit volumes.  Foreign currency exchange movements favorably impacted international revenue by 3% during 2005.


Worldwide V.A.C. revenue was $907.5 million for 2005, an increase of 30% from the prior year due primarily to increased rental and sales volumes.  Foreign currency exchange movements favorably impacted 2005 worldwide V.A.C. revenue by approximately 1%.


Worldwide surfaces revenue was $301.0 million for 2005, an increase of 3% from the prior year due primarily to higher international sales, particularly in Canada.  For the year, foreign currency exchange movements accounted for approximately 1% of the worldwide surfaces revenue increase.


Income Tax Rate

The effective income tax rate was 34.0% for the fourth quarter and full-year 2005 compared to 34.6% and 35.5%, respectively, for each of the same periods in 2004.  The income tax rate reduction is primarily attributable to a higher portion of taxable income being generated in lower tax jurisdictions.


Outlook


The following guidance is based on current information and expectations as of January 30, 2006:

 

 

2005

 

2005

 

2006

 

%

(in millions, except EPS)

 Actual  

 

(Non GAAP) (1) 

 

       Forecast        

 

   Increase  

Revenue

$ 1,209    

 

$ 1,209            

 

$1,340 – $1,390  

 

11% – 15%

Net Earnings

$    122    

 

$    170            

 

$   190 – $   200  

 

12% – 18%

Diluted EPS

$   1.67    

 

$   2.32            

 

$  2.59 – $  2.69  

 

12% – 16%

Diluted Shares

73.0    

 

73.0            

 

73.5 – 74.5      

 

1% –   2%

 


KCI currently projects full year 2006 revenue of $1.34 – $1.39 billion based on continued demand for its V.A.C. negative pressure wound therapy devices and related supplies.  While KCI continues to expand the V.A.C. market and currently projects double-digit growth in 2006, the revenue growth rate for 2006 is expected to be lower than 2005 due, in part, to lower reimbursement for negative pressure wound therapy supplies under Medicare Part B and the current competitive environment.  Therapeutic surfaces revenue for 2006 is expected to be in a range consistent with historical levels.  Net earnings per diluted share for 2006 are currently projected to be $2.59 – $2.69, based on a weighted average share estimate of 73.5 – 74.5 million shares.  Also, the 2006 net earnings forecast includes after-tax expenses of approximately $7.0 – $8.0 million, or $0.10 – $0.11 per share, related to the recognition of stock-based compensation expense under Statement of Financial Accounting Standards No. 123-R.  It is the Company’s practice to provide guidance on a full-year basis, however, it is important to note that we typically experience a seasonal fluctuation in sequential growth from the fourth quarter of each year to the first quarter of the following year.  With the influence of these factors, the Company expects that the first quarter 2006 revenue will approximate, or be slightly higher than, fourth quarter 2005.


(1)Within this press release, we have presented income statement items on a non-GAAP basis to exclude the impact of the 2005 Novamedix litigation settlement and income and expenses and the acceleration of the in-kind preferred stock dividends incurred as a result of the 2004 stock offerings and debt prepayments.  These non-GAAP financial measures do not replace the presentation of our GAAP financial results.  We have provided this supplemental non-GAAP information because it may provide meaningful information regarding our results on a basis that better facilitates comparisons between the periods presented.  Management uses this non-GAAP financial information, along with GAAP information, for reviewing the operating results of its business segments and for analyzing potential future business trends. In addition, we believe some investors may use this information in a similar fashion.  A reconciliation of our GAAP income statement for the periods presented to the non-GAAP financial information provided is included herein.  See the attached Reconciliation of Non-GAAP Condensed Consolidated Statements of Earnings.


Earnings Release Conference Call


As previously announced, the Company has scheduled an earnings release conference call for 8:30 a.m. eastern standard time today, Monday, January 30, 2006.  The dial-in numbers for this conference call are as follows:

Domestic Dial-in Number:

     866-271-6130

International Dial-in Number:

     +617-213-8894

Participant Code:

     29062124


This call is being webcast by CCBN and can be accessed at the Kinetic Concepts Inc. web site at http://www.kci1.com/investor/index.asp, and clicking on Web cast – Q4 2005 Kinetic Concepts Earnings Call.  The webcast is also being distributed over CCBN's Investor Distribution Network to both institutional and individual investors.  Individual investors can listen to the call through CCBN's individual investor center at www.fulldisclosure.com and institutional investors can access the call via CCBN's password-protected event management site, StreetEvents (www.streetevents.com).  An archive of the webcast will be available at http://www.kci1.com/investor/index.asp until January 29, 2007.


KCI's business outlook as of today is expected to be available on KCI's Investor Relations web site.  It is currently expected that a business outlook update will not be announced until the release of KCI's next quarterly earnings announcement, notwithstanding subsequent developments.  However, although KCI undertakes no duty to update its business outlook, KCI may update the full business outlook or any portion thereof at any time.


About KCI

Kinetic Concepts Inc. is a global medical technology company with leadership positions in advanced wound care and therapeutic surfaces.  We design, manufacture, market and service a wide range of proprietary products that can significantly improve clinical outcomes while reducing the overall cost of patient care by accelerating the healing process or preventing complications.  Our advanced wound care systems incorporate our proprietary Vacuum Assisted Closureâ, or V.A.C.â, technology, which has been clinically demonstrated to promote wound healing and reduce the cost of treating patients with difficult-to-treat wounds.  Our therapeutic surfaces, including specialty hospital beds, mattress replacement systems and overlays, are designed to address complications associated with immobility and obesity, such as pressure sores and pneumonia.  We have an infrastructure designed to meet the specific needs of medical professionals and patients across all health care settings including acute care hospitals, extended care facilities and patients' homes both in the United States and abroad.


Forward-Looking Statements

This press release contains forward-looking statements including, among other things, management's estimates of future performance, revenue and earnings growth objectives and potential market.  The forward-looking statements contained herein are based on our current expectations and are subject to a number of risks and uncertainties which could cause us to fail to achieve our current financial projections and other expectations, such as a change in the demand for the V.A.C. resulting from increased competition, a change in payer reimbursement policies, our ability to protect our intellectual property rights and general economic conditions. All information set forth in this release and its attachments is as of January 30, 2006.  We undertake no duty to update this information.  More information about potential factors that could cause our results to differ or adversely affect our business and financial results is included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2004, and our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2005, including, among other sections, under the captions, "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," which is on file with the SEC and available at the SEC's website at www.sec.gov.  Additional information will also be set forth in those sections in our Annual Report on Form 10-K for the fiscal year ended December 31, 2005, which will be filed with the SEC in the first quarter of 2006.

 

KINETIC CONCEPTS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings

(in thousands, except per share data)

(unaudited)

 

 

 

 

 

 

 

            Three months ended December 31,  

                         Year ended December 31,                    

 

 

 

       %     

 

 

 

                 %  

 

     2005    

    2004     

  Change 

   2005      

 

    2004      

         Change 

Revenue:

 

 

 

 

 

 

 

    Rental

$ 229,366 

$ 196,659 

16.6 %   

$ 858,098 

 

$ 726,783 

18.1 %   

   Sales

92,659 

76,996 

20.3       

350,458 

 

265,853 

31.8       

 

_______ 

_______ 

 

_______ 

 

_______ 

 

      Total revenue

322,025 

273,655 

17.7 %  

1,208,556 

 

992,636 

21.8 %  

 

 

 

 

 

 

 

 

Rental expenses

133,588 

124,373 

7.4       

528,000 

 

447,765 

17.9       

Cost of goods sold

24,635 

18,636 

32.2       

89,317 

 

70,780 

26.2       

 

_______ 

_______ 

 

_______ 

 

_______ 

 

      Gross profit

163,802 

130,646 

25.4 %  

591,239 

 

474,091 

24.7 %  

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

78,127 

65,805 

18.7       

279,621 

 

232,981 

20.0       

Research and development expenses

9,917 

9,461 

4.8       

30,614 

 

31,312 

(2.2)       

Litigation settlement expense

- 

- 

-       

72,000 

 

- 

-       

Initial public offering expenses

- 

- 

-       

- 

 

19,836 

-       

Secondary offering expenses

- 

- 

-       

- 

 

2,219 

-       

 

_______ 

_______ 

 

_______ 

 

_______ 

 

      Operating earnings

75,758 

55,380 

36.8 %  

209,004 

 

187,743 

11.3 %  

 

 

 

 

 

 

 

 

Interest income and other

667 

390 

71.0       

4,189 

 

1,133 

269.7       

Interest expense

(6,254)

(7,175)

12.8       

(25,152)

 

(44,635)

43.6       

Foreign currency gain (loss)

82 

3,652 

(97.8)       

(2,958)

 

5,353 

-       

 

_______ 

_______ 

 

_______ 

 

_______ 

 

      Earnings before income taxes

70,253 

52,247 

34.5 %  

185,083 

 

149,594 

23.7 %  

 

 

 

 

 

 

 

 

Income taxes

23,886

18,061 

32.3       

62,928 

 

53,106 

18.5       

 

_______ 

_______ 

 

_______ 

 

_______ 

 

      Net earnings

$   46,367 

$   34,186 

35.6 %  

$ 122,155 

 

$   96,488 

26.6 %  

 

 

 

 

 

 

 

 

Series A convertible preferred stock dividends

- 

- 

-       

- 

 

(65,604)

-       

 

_______ 

_______ 

 

_______ 

 

_______ 

 

      Net earnings available to

 

 

 

 

 

 

 

         common shareholders

$   46,367 

$   34,186 

35.6 %  

$ 122,155 

 

$   30,884 

295.5 %  

 

_______ 

_______ 

 

_______ 

 

_______ 

 

      Net earnings per share available

 

 

 

 

 

 

 

         to common shareholders:

 

 

 

 

 

 

 

         Basic

$        0.66 

$       0.50 

32.0 %  

$       1.76 

 

$       0.49 

259.2 %  

 

_______ 

_______ 

 

_______ 

 

_______ 

 

         Diluted (1)

$        0.64 

$       0.47 

36.2 %  

$       1.67 

 

$       0.45 

271.1 %  

 

_______ 

_______ 

 

_______ 

 

_______ 

 

      Weighted average shares outstanding:

 

 

 

 

 

 

 

         Basic

69,922 

68,104 

 

69,404 

 

62,599 

 

 

_______ 

_______ 

 

_______ 

 

_______ 

 

         Diluted (1)

72,993 

72,560 

 

73,024 

 

67,918 

 

 

_______ 

_______ 

 

_______ 

 

_______ 

 

 

 

 

 

 

 

 

 

(1)  Due to their antidilutive effect, 2,990 dilutive potential common shares from the preferred stock conversion have been excluded from the diluted weighted

       average shares calculation for the year ended December 31, 2004.

       

       

 

KINETIC CONCEPTS, INC. AND SUBSIDIARIES

Reconciliation of Non-GAAP Condensed Consolidated Statements of Earnings (1)

For the year ended December 31,

(in thousands, except per share data)

(unaudited)

 

 

                                   2005                                   

                                          2004                                              

 

 

 

 

 

 

      Excluding

 

 

 

 

 

 

Costs and

      Costs and

 

 

 

 

 

 

Expenses

Expenses

 

 

 

 

 

 

Related to

Related to

 

 

 

 

        Excluding

 

Offerings

Offerings

 

 

 

Litigation

Litigation 

 

and Debt

and Debt

 

 

 

Settlement

Settlement 

 

Prepayments

Prepayments

%

 

GAAP  

(non-GAAP)

(non-GAAP) 

GAAP  

(non-GAAP)

(non-GAAP)

Change (2)

Revenue:

 

 

 

 

 

 

 

   Rental

$ 858,098 

$           -     

$ 858,098        

$ 726,783 

$             -     

$ 726,783        

18.1 %   

   Sales

350,458 

-     

350,458        

265,853 

-     

265,853        

31.8       

 

_______ 

______     

_______        

_______ 

_______     

_______        

 

      Total revenue

1,208,556 

-     

1,208,556        

992,636 

-     

992,636        

21.8 %  

 

 

 

 

 

 

 

 

Rental expenses

528,000 

-     

528,000        

447,765 

-     

447,765        

17.9       

Cost of goods sold

89,317 

-     

89,317        

70,780 

-     

70,780        

26.2       

 

_______ 

______     

_______        

_______ 

_______     

_______        

 

      Gross profit

591,239 

-     

591,239        

474,091 

-     

474,091        

24.7 %  

 

 

 

 

 

 

 

 

Selling, general and

 

 

 

 

 

 

 

   administrative expenses

279,621 

-     

279,621        

232,981 

-     

232,981        

20.0       

Research and development

 

 

 

 

 

 

 

   expenses

30,614 

-     

30,614        

31,312 

-     

31,312        

(2.2)      

Litigation settlement expense

72,000 

(72,000)    

-        

- 

-     

-        

-       

Initial public offering expenses

- 

-     

-        

19,836 

(19,836)    

-        

-       

Secondary offering expenses

- 

-     

-        

2,219 

(2,219)    

-        

-       

 

_______ 

______     

_______        

_______ 

_______     

_______        

 

      Operating earnings

209,004 

72,000     

281,004        

187,743 

22,055     

209,798        

33.9 %  

 

 

 

 

 

 

   

 

Interest income and other

4,189 

-     

4,189        

1,133 

-     

1,133        

269.7       

Interest expense

(25,152)

-     

(25,152)       

(44,635)

11,689     

(32,946)       

23.7       

Foreign currency gain (loss)

(2,958)

-     

(2,958)       

5,353 

-     

5,353        

-       

 

_______ 

______     

_______        

_______ 

_______     

_______        

 

      Earnings before income

 

 

 

 

 

 

 

         taxes

185,083 

72,000     

257,083        

149,594 

33,744     

183,338        

40.2 %  

Income taxes

62,928 

24,559     

87,487        

53,106 

11,979     

65,085        

34.4       

 

_______ 

______     

_______        

_______ 

_______     

_______        

 

      Net earnings

$ 122,155 

$  47,441     

$ 169,596        

$   96,488 

$   21,765     

$ 118,253        

43.4 %  

Series A convertible preferred

 

 

 

 

 

 

 

   stock dividends

- 

-     

-        

(65,604)

65,604     

-        

-       

 

_______ 

______     

_______        

_______ 

_______     

_______        

 

      Net earnings available to

 

 

 

 

 

 

 

         common shareholders

$  122,155 

$  47,441     

$ 169,596        

$  30,884 

$   87,369     

$ 118,253        

43.4 %  

 

_______ 

______     

_______        

_______ 

_______     

_______        

 

      Net earnings per share

 

 

 

 

 

 

 

         available to common

 

 

 

 

 

 

 

         shareholders:

 

 

 

 

 

 

 

         Basic

$        1.76 

$      0.68     

$        2.44        

$      0.49 

$       1.40     

$       1.89        

29.1 %  

 

_______ 

_______     

_______        

_______ 

_______     

_______        

 

         Diluted  (3)

$        1.67 

$      0.65     

$        2.32        

$      0.45 

$       1.22     

$       1.67        

38.9 %  

 

_______ 

_______     

_______        

_______ 

_______     

_______        

 

      Weighted average

 

 

 

 

 

 

 

         shares outstanding:

 

 

 

 

 

 

 

         Basic

69,404 

 

69,404        

62,599 

 

62,599        

 

 

_______ 

 

_______        

_______ 

 

_______        

 

         Diluted  (3)

73,024 

 

73,024        

67,918 

 

70,908        

 

 

_______ 

 

_______        

_______ 

 

_______        

 

 

(1)  These non-GAAP financial measures do not replace the presentation of our GAAP financial results.  See footnote (1) on page 2 of this press

       release for further discussion of our non-GAAP financial information.

(2)  The percentage change reflects the percentage variance between the 2005 non-GAAP results, excluding the litigation settlement, and the 2004

       non-GAAP results, excluding costs and expenses related to offerings and debt prepayments.

(3)  Due to their antidilutive effect, 2,990 dilutive potential common shares from the preferred stock conversion have been excluded from the

       GAAP diluted weighted average shares calculation for the year ended December 31, 2004.

       

 

KINETIC CONCEPTS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

 

 

                     December 31,                  

 

        2005        

 

         2004       

 

 

 

 

Assets:

 

 

 

Current assets:

 

 

 

   Cash and cash equivalents

$  123,383   

 

$  124,366   

   Accounts receivable, net

281,890   

 

252,822   

   Inventories, net

28,429   

 

35,590   

   Deferred income taxes

26,447   

 

24,836   

   Prepaid expenses and other current assets

16,908   

 

13,296   

 

_______   

 

_______   

          Total current assets

477,057   

 

450,910   

 

_______   

 

_______   

 

 

 

 

Net property, plant and equipment

192,243   

 

183,075   

Debt issuance costs, less accumulated amortization of $12,709

 

 

 

    in 2005 and $8,317 in 2004

7,545   

 

11,937   

Deferred income taxes

6,895   

 

7,913   

Goodwill

49,369   

 

49,369   

Other assets, less accumulated amortization of $9,310 in 2005

 

 

 

    and $8,748 in 2004

29,002   

 

29,261   

 

_______   

 

_______   

 

$ 762,111   

 

$ 732,465   

 

_______   

 

_______   

Liabilities and Shareholders’ Equity:

 

 

 

Current liabilities:

 

 

 

   Accounts payable

$   43,853   

 

$    43,246   

   Accrued expenses and other

170,695   

 

150,317   

   Current installments of long-term debt

1,769   

 

2,803   

   Income taxes payable

18,619   

 

20,821   

 

_______   

 

_______   

          Total current liabilities

234,936   

 

217,187   

 

_______   

 

_______   

 

 

 

 

Long-term debt, net of current installments

292,726   

 

442,943   

Deferred income taxes

30,622   

 

13,170   

Other noncurrent liabilities

12,361   

 

8,364   

 

_______   

 

_______   

 

570,645   

 

681,664   

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

   Common stock; authorized 225,000 at 2005 and 2004;

 

 

 

      issued and outstanding 70,307 at 2005 and 68,694 at 2004

70   

 

69   

   Preferred stock; authorized 50,000 at 2005 and 2004;

 

 

 

      issued and outstanding 0 at 2005 and 2004

-   

 

-   

   Additional paid-in capital

557,468   

 

517,354   

   Deferred compensation

(6,880)  

 

(1,906)  

   Retained deficit

(365,916)  

 

(488,071)  

   Accumulated other comprehensive income

6,724   

 

23,355   

 

_______   

 

_______   

          Shareholders' equity

191,466   

 

50,801   

 

_______   

 

_______   

 

$ 762,111   

 

$ 732,465   

 

_______   

 

_______   

 

 

KINETIC CONCEPTS, INC. AND SUBSIDIARIES

 

Condensed Consolidated Statements of Cash Flows

 

(in thousands)

 

(unaudited)

 

 

        Year ended December 31,       

 

 

     2005     

 

       2004         

 

Cash flows from operating activities:

 

 

 

 

   Net earnings

$   122,155    

 

$    96,488     

 

   Adjustments to reconcile net earnings to net cash provided

 

 

 

 

      by operating activities:

 

 

 

 

         Depreciation and amortization

68,852    

 

60,901     

 

         Provision for uncollectible accounts receivable

17,435    

 

12,346     

 

         Amortization of deferred gain on sale of headquarters facility

(1,070)   

 

(1,070)    

 

         Write-off of deferred debt issuance costs

2,941    

 

5,504     

 

         Non-cash amortization of stock awards

1,874    

 

442     

 

         Tax benefit related to exercise of stock options

27,459    

 

69,257     

 

         Change in assets and liabilities:

 

 

 

 

               Increase in accounts receivable, net

(45,554)   

 

(63,649)    

 

               Decrease (increase) in inventories, net

7,352    

 

(2,874)    

 

               Increase in current deferred income taxes, net

(1,611)   

 

(2,087)    

 

               Decrease (increase) in prepaid expenses and other current assets

(3,432)   

 

170     

 

               Increase in accounts payable

720    

 

9,090     

 

               Increase in accrued expenses and other

24,872    

 

44,664     

 

               Decrease in income taxes payable

(2,202)   

 

(18,582)    

 

               Increase (decrease) in deferred income taxes, net

18,407    

 

(22,728)    

 

 

_______    

 

_______     

 

                  Net cash provided by operating activities

238,198    

 

187,872     

 

 

_______    

 

_______     

 

Cash flows from investing activities:

 

 

 

 

   Additions to property, plant and equipment

(94,225)   

 

(93,230)    

 

   Decrease (increase) in inventory to be converted into equipment

 

 

 

 

      for short-term rental

2,300    

 

(100)    

 

   Dispositions of property, plant and equipment

2,508    

 

1,982     

 

   Business acquisitions, net of cash acquired

-    

 

(1,247)    

 

   Increase in other assets

(417)   

 

(2,573)    

 

 

_______    

 

_______     

 

                  Net cash used by investing activities

(89,834)   

 

(95,168)    

 

 

_______    

 

_______     

 

Cash flows from financing activities:

 

 

 

 

   Repayment of notes payable, long-term debt, capital lease

 

 

 

 

      and other obligations

(150,252)   

 

(237,536)    

 

   Proceeds from exercise of stock options, net

9,276    

 

15,352     

 

   Purchase of immature shares for minimum tax withholdings

(7,589)   

 

-     

 

   Proceeds from purchase of stock in ESPP

4,113    

 

1,815     

 

   Initial public offering of common stock:

 

 

 

 

      Proceeds from issuance of common stock

-    

 

105,000     

 

      Stock issuance costs

-    

 

(10,604)    

 

 

_______    

 

_______     

 

                  Net cash used by financing activities

(144,452)   

 

(125,973)    

 

 

_______    

 

_______     

 

Effect of exchange rate changes on cash and cash equivalents

    (4,895)   

 

    1,571    

 

 

_______    

 

_______     

 

Net decrease in cash and cash equivalents

(983)   

 

(31,698)    

 

Cash and cash equivalents, beginning of year

 124,366    

 

   156,064     

 

 

_______    

 

_______     

 

Cash and cash equivalents, end of year

$  123,383    

 

$  124,366     

 

 

_______    

 

_______     

 

Non-cash activity:

 

 

 

 

   Non-cash consideration for exercise of stock options

$             7    

 

$    6,480     

 

 

 

 

 

 

 

 

KINETIC CONCEPTS, INC. AND SUBSIDIARIES

Supplemental Revenue Data

(in thousands)

(unaudited)

 

 

                     Three months ended December 31,                      

 

 

 

 

 

 

 

               Variance            

 

 

    2005      

 

       2004   

 

 

      $      

 

   %   

 

Total Revenue:

 

 

 

 

 

 

 

 

 

  V.A.C.

 

 

 

 

 

 

 

 

 

     Rental

$ 169,742 

 

$  135,485 

 

 

$  34,257 

 

25.3 %

 

     Sales

78,860 

 

63,216 

 

 

15,644 

 

24.7    

 

 

_______ 

 

_______ 

 

 

______ 

 

 

 

         Total V.A.C.

248,602 

 

198,701 

 

 

49,901 

 

25.1    

 

 

 

 

 

 

 

 

 

 

 

  Therapeutic surfaces/other

 

 

 

 

 

 

 

 

 

     Rental

59,624 

 

61,174 

 

 

(1,550)

 

(2.5)   

 

     Sales

13,799 

 

13,780 

 

 

19 

 

0.1    

 

 

_______ 

 

_______ 

 

 

______ 

 

 

 

         Total therapeutic surfaces/other

73,423 

 

74,954 

 

 

(1,531)

 

(2.0)   

 

 

 

 

 

 

 

 

 

 

 

  Total rental revenue

229,366 

 

196,659 

 

 

32,707 

 

16.6    

 

  Total sales revenue

92,659 

 

76,996 

 

 

15,663 

 

20.3    

 

 

_______ 

 

_______ 

 

 

______ 

 

 

 

       Total Revenue

$ 322,025 

 

$ 273,655 

 

 

$  48,370 

 

17.7 %

 

 

_______ 

 

_______ 

 

 

_______ 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

USA Revenue:

 

 

 

 

 

 

 

 

 

  V.A.C.

 

 

 

 

 

 

 

 

 

     Rental

$ 143,408 

 

$   114,326 

 

 

$  29,082 

 

25.4 %

 

     Sales

51,018 

 

41,912 

 

 

9,106 

 

21.7    

 

 

_______ 

 

_______ 

 

 

______ 

 

 

 

          Total V.A.C.

194,426 

 

156,238 

 

 

38,188 

 

24.4    

 

 

 

 

 

 

 

 

 

 

 

  Therapeutic surfaces/other

 

 

 

 

 

 

 

 

 

     Rental

37,783 

 

37,782 

 

 

1 

 

-    

 

     Sales

7,539 

 

7,650 

 

 

(111)

 

(1.5)   

 

 

_______ 

 

_______ 

 

 

______ 

 

 

 

         Total therapeutic surfaces/other

45,322 

 

45,432 

 

 

(110)

 

(0.2)   

 

 

 

 

 

 

 

 

 

 

 

  Total USA rental

181,191 

 

152,108 

 

 

29,083 

 

19.1    

 

  Total USA sales

58,557 

 

49,562 

 

 

8,995 

 

18.1    

 

 

_______ 

 

_______ 

 

 

______ 

 

 

 

       Total – USA Revenue

$ 239,748 

 

$ 201,670 

 

 

$  38,078 

 

18.9 %

 

 

_______ 

 

_______ 

 

 

_______ 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Revenue:

 

 

 

 

 

 

 

 

 

  V.A.C.

 

 

 

 

 

 

 

 

 

     Rental

$   26,334 

 

$   21,159 

 

 

$    5,175 

 

24.5 %

 

     Sales

27,842 

 

21,304 

 

 

6,538 

 

30.7    

 

 

_______ 

 

_______ 

 

 

______ 

 

 

 

         Total V.A.C.

54,176 

 

42,463 

 

 

11,713 

 

27.6    

 

 

 

 

 

 

 

 

 

 

 

  Therapeutic surfaces/other

 

 

 

 

 

 

 

 

 

     Rental

21,841 

 

23,392 

 

 

(1,551)

 

(6.6)   

 

     Sales

6,260 

 

6,130 

 

 

130 

 

2.1    

 

 

_______ 

 

_______ 

 

 

______ 

 

 

 

         Total therapeutic surfaces/other

28,101 

 

29,522 

 

 

(1,421) 

 

(4.8)   

 

 

 

 

 

 

 

 

 

 

 

  Total International rental

48,175 

 

44,551 

 

 

3,624 

 

8.1    

 

  Total International sales

34,102 

 

27,434 

 

 

6,668 

 

24.3    

 

 

_______ 

 

_______ 

 

 

______ 

 

 

 

       Total – International Revenue

$   82,277 

 

$   71,985 

 

 

$  10,292 

 

14.3 %

 

 

_______ 

 

_______ 

 

 

_______ 

 

 

 

 

 

KINETIC CONCEPTS, INC. AND SUBSIDIARIES

Supplemental Revenue Data

(in thousands)

(unaudited)

 

 

                                           Year ended December 31,                        

 

 

 

 

 

 

 

               Variance             

 

 

    2005      

 

       2004   

 

 

      $      

 

   %   

 

Total Revenue:

 

 

 

 

 

 

 

 

 

  V.A.C.

 

 

 

 

 

 

 

 

 

     Rental

$  615,579 

 

$  485,511 

 

 

$  130,068 

 

26.8 %

 

     Sales

291,964 

 

213,502 

 

 

78,462 

 

36.8    

 

 

_______ 

 

_______ 

 

 

______ 

 

 

 

         Total V.A.C.

907,543 

 

699,013 

 

 

208,530 

 

29.8    

 

 

 

 

 

 

 

 

 

 

 

  Therapeutic surfaces/other

 

 

 

 

 

 

 

 

 

     Rental

242,519 

 

241,272 

 

 

1,247 

 

0.5    

 

     Sales

58,494 

 

52,351 

 

 

6,143 

 

11.7    

 

 

_______ 

 

_______ 

 

 

______ 

 

 

 

         Total therapeutic surfaces/other

301,013 

 

293,623 

 

 

7,390 

 

2.5    

 

 

 

 

 

 

 

 

 

 

 

  Total rental revenue

858,098 

 

726,783 

 

 

131,315 

 

18.1    

 

  Total sales revenue

350,458 

 

265,853 

 

 

84,605 

 

31.8    

 

 

_______ 

 

_______ 

 

 

______ 

 

 

 

       Total Revenue

$1,208,556 

 

$ 992,636 

 

 

$  215,920 

 

21.8 %

 

 

_______ 

 

_______ 

 

 

_______ 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

USA Revenue:

 

 

 

 

 

 

 

 

 

  V.A.C.

 

 

 

 

 

 

 

 

 

     Rental

$ 519,570 

 

$   417,008 

 

 

$ 102,562 

 

24.6 %

 

     Sales

186,476 

 

145,627 

 

 

40,849 

 

28.1    

 

 

_______ 

 

_______ 

 

 

______ 

 

 

 

         Total V.A.C.

706,046 

 

562,635 

 

 

143,411 

 

25.5    

 

 

 

 

 

 

 

 

 

 

 

  Therapeutic surfaces/other

 

 

 

 

 

 

 

 

 

     Rental

152,294 

 

152,219 

 

 

75 

 

-    

 

     Sales

27,853 

 

29,450 

 

 

(1,597)

 

(5.4)   

 

 

_______ 

 

_______ 

 

 

______ 

 

 

 

         Total therapeutic surfaces/other

180,147 

 

181,669 

 

 

(1,522)

 

(0.8)   

 

 

 

 

 

 

 

 

 

 

 

  Total USA rental

671,864 

 

569,227 

 

 

102,637 

 

18.0    

 

  Total USA sales

214,329 

 

175,077 

 

 

39,252 

 

22.4    

 

 

_______ 

 

_______ 

 

 

______ 

 

 

 

       Total – USA Revenue

$ 886,193 

 

$ 744,304 

 

 

$  141,889 

 

19.1 %

 

 

_______ 

 

_______ 

 

 

_______ 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Revenue:

 

 

 

 

 

 

 

 

 

  V.A.C.

 

 

 

 

 

 

 

 

 

     Rental

$   96,009 

 

$   68,503 

 

 

$    27,506 

 

40.2 %

 

     Sales

105,488 

 

67,875 

 

 

37,613 

 

55.4    

 

 

_______ 

 

_______ 

 

 

______ 

 

 

 

         Total V.A.C.

201,497 

 

136,378 

 

 

65,119 

 

47.7    

 

 

 

 

 

 

 

 

 

 

 

  Therapeutic surfaces/other

 

 

 

 

 

 

 

 

 

     Rental

90,225 

 

89,053 

 

 

1,172 

 

1.3    

 

     Sales

30,641 

 

22,901 

 

 

7,740 

 

33.8    

 

 

_______ 

 

_______ 

 

 

______ 

 

 

 

         Total therapeutic surfaces/other

120,866 

 

111,954 

 

 

8,912 

 

8.0    

 

 

 

 

 

 

 

 

 

 

 

  Total International rental

186,234 

 

157,556 

 

 

28,678 

 

18.2    

 

  Total International sales

136,129 

 

90,776 

 

 

45,353 

 

50.0    

 

 

_______ 

 

_______ 

 

 

______ 

 

 

 

       Total – International Revenue

$   322,363 

 

$   248,332 

 

 

$  74,031 

 

29.8 %

 

 

_______ 

 

_______ 

 

 

_______