Kindred Healthcare, Inc. (“Kindred” or the “Company”) (NYSE:KND)
today announced that it has completed its previously announced
agreement to sell 12 long-term acute care (“LTAC”) hospitals (the
“Hospitals”) for $27.5 million to a group of entities operating
under the name “Curahealth,” which are affiliates of a private
investment fund sponsored by Nautic Partners, LLC (“Nautic”). The
Hospitals have a total of 783 licensed beds in Arizona, Louisiana,
Massachusetts, Oklahoma, Pennsylvania and Tennessee.
Benjamin A. Breier, President and Chief Executive Officer of
Kindred, commented, “We are pleased to complete the sale of 12 LTAC
hospitals to Curahealth, as this transaction creates both strategic
and financial value for Kindred. Optimizing our LTAC hospital
portfolio is a key element of our LTAC criteria mitigation strategy
and this transaction significantly advances that strategy. Nautic
has a proven track record of success in the healthcare sector and
will be a strong partner for these hospitals and the communities
they serve.”
For the full fiscal year 2016, Kindred expects that the
Hospitals will generate combined revenues of approximately
$215 million and earnings before interest, income taxes,
depreciation and amortization (“EBITDA”) at approximately
breakeven. The Hospitals have $14 million of annual aggregate rent
expense.
Kindred realized approximately $21 million of cash proceeds from
this sale, subject to post-closing adjustments, with the remainder
of the purchase price to be paid upon satisfaction of financial and
other post-closing conditions. As previously announced, the Company
amended various master lease agreements with Ventas, Inc.
(“Ventas”) (NYSE:VTR) in April 2016 in connection with the proposed
transaction with Curahealth. The transactions with Curahealth and
Ventas are also expected to generate future cash income tax
benefits for Kindred of approximately $37 million. Kindred
anticipates reporting pretax charges of approximately
$54 million related to the Ventas lease amendments and
approximately $45 million to $55 million related to the transaction
with Curahealth within fiscal 2016, of which approximately $8
million was recorded during the six months ended June 30, 2016.
“We are excited to complete this transaction with Kindred and
look forward to providing high-quality healthcare to existing and
future patients in the markets these hospitals serve,” said Chester
Crouch, Chief Executive Officer of Curahealth.
Forward-Looking Statements
This press release includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of
1934, as amended. These forward-looking statements include, but are
not limited to, the Company’s ability to realize the anticipated
proceeds and benefits from these transactions, all statements
regarding the Company’s expected future financial position, results
of operations, cash flows, dividends, financing plans, business
strategy, budgets, capital expenditures, competitive positions,
growth opportunities, plans and objectives of management,
government investigations, regulatory matters, and statements
containing the words such as “anticipate,” “approximate,”
“believe,” “plan,” “estimate,” “expect,” “project,” “could,”
“would,” “should,” “will,” “intend,” “may,” “potential,” “upside,”
and other similar expressions. Statements in this press release
concerning the Company’s business outlook or future economic
performance, anticipated profitability, revenues, expenses,
dividends or other financial items, product or services line
growth, and expected outcome of government investigations and other
regulatory matters, together with other statements that are not
historical facts, are forward-looking statements that are estimates
reflecting the best judgment of the Company based upon currently
available information.
Such forward-looking statements are inherently uncertain, and
stockholders and other potential investors must recognize that
actual results may differ materially from the Company’s
expectations as a result of a variety of factors. Such
forward-looking statements are based upon management’s current
expectations and include known and unknown risks, uncertainties and
other factors, many of which the Company is unable to predict or
control, that may cause the Company’s actual results, performance
or plans to differ materially from any future results, performance
or plans expressed or implied by such forward-looking statements.
These statements involve risks, uncertainties and other factors in
the Company’s Annual Report on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K filed with the Securities and
Exchange Commission.
Many of these factors are beyond the Company’s control. The
Company cautions investors that any forward-looking statements made
by the Company are not guarantees of future performance. The
Company disclaims any obligation to update any such factors or to
announce publicly the results of any revisions to any of the
forward-looking statements to reflect future events or
developments.
Non-GAAP Measure
EBITDA: The Company defines EBITDA as earnings before interest,
income taxes, depreciation and amortization, and believes that the
presentation of EBITDA is useful to the investors because
creditors, securities analysts and investors use EBITDA as a
measure of earnings used to compare the performance of companies in
the healthcare and other industries.
EBITDA is a non-GAAP financial measure. Expected full fiscal
year 2016 EBITDA for the Hospitals is provided only on a non-GAAP
basis, because of the inherent difficulty of forecasting the timing
or amount of items that would be included in income from continuing
operations, which is the most comparable GAAP financial measure. As
a result, a reconciliation of the expected full fiscal year 2016
EBITDA for the Hospitals to income from continuing operations is
not available without unreasonable effort and the Company is unable
to address the probable significance of the unavailable
information.
About Kindred Healthcare
Kindred Healthcare, Inc., a top-90 private employer in the
United States, is a FORTUNE 500 healthcare services company based
in Louisville, Kentucky with annual revenues of approximately
$7.2 billion(1). At June 30, 2016, Kindred through its
subsidiaries had approximately 101,800 employees providing
healthcare services in 2,684 locations in 46 states, including 97
transitional care hospitals, 19 inpatient rehabilitation hospitals,
92 nursing centers, 19 sub-acute units, 617 Kindred at Home home
health, hospice and non-medical home care sites of service, 105
inpatient rehabilitation units (hospital-based) and contract
rehabilitation service businesses which served 1,735 non-affiliated
sites of service. Ranked as one of Fortune magazine’s Most Admired
Healthcare Companies for seven years, Kindred’s mission is to
promote healing, provide hope, preserve dignity and produce value
for each patient, resident, family member, customer, employee and
shareholder we serve. For more information, go to
www.kindredhealthcare.com. You can also follow us on Twitter and
Facebook.
_________
(1) Revenues based upon Kindred consolidated revenues for the
twelve months ended June 30, 2016.
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Kindred Healthcare, Inc.Todd Flowers, 502-596-6569Investor
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