CHARLOTTE, N.C., Aug 3 /PRNewswire-FirstCall/ -- MedCath
Corporation (NASDAQ:MDTH), a healthcare provider primarily focused
on the diagnosis and treatment of cardiovascular disease, today
announced its operating results for its third fiscal quarter, which
ended June 30, 2006. Third quarter highlights: * Net revenue
increased 6.3% to $191.1 million * Adjusted EBITDA of $30.0
million, the highest quarterly level achieved by MedCath since its
2001 initial public offering * Adjusted EBITDA margin of 15.7%, up
from 13.7% in the third quarter of 2005 * Admissions increased 7.2%
Third Quarter 2006 Results MedCath's net revenue increased 6.3% to
$191.1 million in the third quarter of fiscal 2006 from $179.8
million in the third quarter of fiscal 2005. Income from operations
was $18.5 million in the third quarter of fiscal 2006, compared to
$15.2 million in the third quarter of fiscal 2005. Adjusted EBITDA
increased 21.4% to $30.0 million from $24.7 million and income from
continuing operations was $5.8 million, or $0.30 per diluted share,
in the third quarter of fiscal 2006, compared to income from
continuing operations of $2.6 million, or $0.13 per diluted share,
in the third quarter of fiscal 2005. MedCath's results from
continuing operations for the third quarter of fiscal 2006 were
negatively impacted by $0.05 per share due to $1.0 million, net of
taxes, of non-cash share-based compensation included in personnel
expense for grants of stock options and restricted shares as
required under FASB Statement No. 123R that MedCath adopted
effective October 1, 2005. Net income for the quarter, including
the results of Tucson Heart Hospital, which are accounted for as
discontinued operations, totaled $5.4 million, or $0.28 per diluted
share compared to net income of $2.7 million, or $0.14 per share in
the third quarter of fiscal 2005. During the third quarter of
fiscal 2006, MedCath announced that it had entered into a letter of
intent that contemplates the sale of its interest in Tucson Heart
Hospital to a community hospital. The closing of this transaction
is subject to finalizing definitive agreements and satisfaction of
customary closing conditions. For the third fiscal quarter of 2006,
MedCath's results include loss from discontinued operations, net of
taxes, of $439,000. MedCath's third quarter of fiscal 2006
financial results contain the following unusual items. Per share
amounts reflect minority interest, where applicable, and income
taxes: * A $700,000, or net impact of $0.02 per share, reduction in
net revenue and Adjusted EBITDA due to contractual adjustments to
estimated Medicare and Medicaid cost report settlements related to
prior periods. * A $600,000, or net impact of $0.01 per share,
increase in net revenue and Adjusted EBITDA due to the receipt of
the final payment from our insurance carrier related to the
disruption of patient services at Arizona Heart Hospital resulting
from a fire at the facility during the first quarter of fiscal
2006. Total business interruption proceeds received during the
fiscal third quarter of 2006 were $1.2 million, which exceeded the
preliminary settlement estimate of $600,000 that the Company
provided as part of its fiscal first quarter earnings review. * A
net $1.4 million, or $0.04 per share, increase in other income
related to the settlement of a legal dispute. This settlement is
net of related legal expenses. * A $450,000, or $0.01 per share,
expense related to the impairment of a workforce management system
that the Company has decided to not implement. "This quarter's
solid revenue growth and financial performance reflect the
commitment that our organization has made to improving our
operations and growing our business, while maintaining our
commitment to providing quality care," said Ed French, MedCath's
president and chief executive officer. "We have re-established
operating momentum in certain markets, which is important as we
continue to evolve from a development company to a strong operating
company with a continued focus on growth." Operating Statistics and
Cash Flow Hospital admissions for the third quarter of fiscal 2006
increased 7.2% and adjusted admissions rose 6.9% from the third
quarter of the previous fiscal year. Net revenue for our
majority-owned hospitals, excluding our Tucson Heart Hospital that
is accounted for as discontinued operations, increased 6.7%. Net
cash provided by operating activities of continuing operations for
the third quarter of fiscal 2006 was $27.7 million, up from $20.7
million for the third quarter of fiscal 2005. Use of Non-GAAP
Financial Measures This release contains measures of MedCath's
historical financial performance that are not calculated and
presented in conformity with generally accepted accounting
principles ("GAAP"), including Adjusted EBITDA. Adjusted EBITDA
represents MedCath's income from continuing operations before
interest expense; interest and other income, net; income tax
expense; depreciation; amortization; share-based compensation
expense; gain or loss on disposal of property, equipment and other
assets; impairment of long-lived assets; equity in net earnings of
unconsolidated affiliates; and minority interest. MedCath's
management uses Adjusted EBITDA to measure the performance of the
company's various operating entities, to compare actual results to
historical and budgeted results, and to make capital allocation
decisions. Management provides Adjusted EBITDA to investors to
assist them in performing their analysis of MedCath's historical
operating results. Further, management believes that many investors
in MedCath also invest in, or have knowledge of, other healthcare
companies that use Adjusted EBITDA as a financial performance
measure. Because Adjusted EBITDA is a non-GAAP measure, Adjusted
EBITDA, as defined above, may not be comparable to other similarly
titled measures of other companies. MedCath has included a
supplemental schedule with the financial statements that accompany
this press release that reconciles historical Adjusted EBITDA to
MedCath's income from continuing operations. Management will
discuss and answer questions regarding MedCath's quarterly results
today during a 10 a.m. ET conference call. In the United States,
you may participate by dialing (877) 697-5351. International
callers should dial (706) 634-0602. The conference ID for both
domestic and international callers is "MedCath." A live web cast
will also be available on the company's web site,
http://www.medcath.com/. This information will be available on the
web site on or immediately following the conference call for 30
days. A recorded replay of the call will be available until 11:59
p.m. ET, August 10, 2006. To access the replay, domestic callers
should dial (800) 642-1687 and international callers should dial
(706) 645-9291. The archived conference ID is 1482647. This press
release and the financial information included therewith will be
accessible on the web, by going to http://www.medcath.com/,
"Investor Relations," then clicking on "News." MedCath Corporation,
headquartered in Charlotte, N.C., is a healthcare provider focused
primarily on the diagnosis and treatment of cardiovascular disease.
MedCath focuses on serving the unique needs of patients suffering
from cardiovascular disease. Upon completion of the pending
divestiture of its ownership in Tucson Heart Hospital, MedCath will
own interest and operate eleven hospitals with a total of 667
licensed beds, located in Arizona, Arkansas, California, Louisiana,
New Mexico, Ohio, South Dakota, and Texas. In addition, MedCath
manages the cardiovascular program at various hospitals operated by
other parties. Further, MedCath provides cardiovascular care
services in diagnostic and therapeutic facilities located in
various states. Parts of this announcement contain forward-looking
statements that involve risks and uncertainties. Although
management believes that these forward- looking statements are
based on reasonable assumptions, these assumptions are inherently
subject to significant economic, regulatory and competitive
uncertainties and contingencies that are difficult or impossible to
predict accurately and are beyond our control. Actual results could
differ materially from those projected in these forward-looking
statements. We do not assume any obligation to update these
statements in a news release or otherwise should material facts or
circumstances change in ways that would affect their accuracy.
These various risks and uncertainties are described in detail in
"Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations - Risk Factors and Forward
Looking Statements" in MedCath's Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 2006. A copy of this report,
including exhibits, is available on the internet site of the
Securities and Exchange Commission at http://www.sec.gov/. MEDCATH
CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands,
except per share data) (Unaudited) Three Months Ended Nine Months
Ended June 30, June 30, 2006 2005 2006 2005 Net revenue $191,060
$179,787 $555,385 $524,156 Operating expenses: Personnel expense
58,033 53,893 181,211 159,874 Medical supplies expense 52,657
51,047 154,735 148,813 Bad debt expense 14,228 13,874 44,405 36,063
Other operating expenses 37,916 36,286 114,123 107,316 Depreciation
9,366 9,034 27,801 27,214 Amortization 252 290 756 870 Loss (gain)
on disposal of property, equipment and other assets (296) 148 (237)
204 Impairment of long-lived assets 451 - 451 - Total operating
expenses 172,607 164,572 523,245 480,354 Income from operations
18,453 15,215 32,140 43,802 Other income (expenses): Interest
expense (7,870) (8,440) (25,828) (24,129) Interest and other
income, net 2,977 868 5,748 1,870 Equity in net earnings of
unconsolidated affiliates 1,408 899 3,883 2,554 Total other
expenses, net (3,485) (6,673) (16,197) (19,705) Income from
continuing operations before minority interest, income taxes and
discontinued operations 14,968 8,542 15,943 24,097 Minority
interest share of earnings of consolidated subsidiaries (5,161)
(3,956) (12,769) (12,357) Income from continuing operations before
income taxes and discontinued operations 9,807 4,586 3,174 11,740
Income tax expense 3,988 1,952 1,333 4,814 Income from continuing
operations 5,819 2,634 1,841 6,926 Income (loss) from discontinued
operations, net of taxes (439) 115 266 4,166 Net income $5,380
$2,749 $2,107 $11,092 Earnings (loss) per share, basic Continuing
operations $0.31 $0.14 $0.10 $0.38 Discontinued operations (0.02)
0.01 0.01 0.23 Earnings per share, basic $0.29 $0.15 $0.11 $0.61
Earnings (loss) per share, diluted Continuing operations $0.30
$0.13 $0.09 $0.36 Discontinued operations (0.02) 0.01 0.01 0.21
Earnings per share, diluted $0.28 $0.14 $0.10 $0.57 Weighted
average number of shares, basic 18,630 18,425 18,583 18,216
Dilutive effect of stock options and restricted stock 661 1,248 921
1,193 Weighted average number of shares, diluted 19,291 19,673
19,504 19,409 MEDCATH CORPORATION SELECTED OPERATING DATA (In
thousands, except per share data and selected operating data)
(Unaudited) Three Months Ended June 30, 2006 2005 % Change
Statement of Operations Data: Net revenue $191,060 $179,787 6.3%
Adjusted EBITDA (1) $29,982 $24,687 21.4% Income from operations
$18,453 $15,215 21.3% Income from continuing operations $5,819
$2,634 120.9% Earnings per share from continuing operations, basic
$0.31 $0.14 121.4% Earnings per share from continuing operations,
diluted $0.30 $0.13 130.8% Nine Months Ended June 30, 2006 2005 %
Change Statement of Operations Data: Net revenue $555,385 $524,156
6.0% Adjusted EBITDA (1) $73,291 $72,090 1.7% Income from
operations $32,140 $43,802 (26.6)% Income from continuing
operations $1,841 $6,926 (73.4)% Earnings per share from continuing
operations, basic $0.10 $0.38 (73.7)% Earnings per share from
continuing operations, diluted $0.09 $0.36 (75.0)% (1) See
Supplemental Financial Disclosure--Reconciliation of GAAP Financial
Measures to Non-GAAP Financial Measures. Three Months Ended June
30, 2006 2005 % Change Selected Operating Data (consolidated) (a):
Number of hospitals 10 10 Licensed beds (b) 612 612 Staffed and
available beds (c) 595 571 Admissions (d) 11,115 10,364 7.2%
Adjusted admissions (e) 14,494 13,555 6.9% Patient days (f) 35,508
36,281 (2.1)% Adjusted patient days (g) 46,318 47,202 (1.9)%
Average length of stay (days) (h) 3.19 3.50 (8.9)% Occupancy (i)
65.6% 69.8% Inpatient catheterization procedures 5,838 5,457 7.0%
Inpatient surgical procedures 2,920 2,915 0.2% Nine Months Ended
June 30, 2006 2005 % Change Selected Operating Data (consolidated)
(a): Number of hospitals 10 10 Licensed beds (b) 612 612 Staffed
and available beds (c) 595 571 Admissions (d) 32,987 31,119 6.0%
Adjusted admissions (e) 42,822 40,349 6.1% Patient days (f) 109,497
109,738 (0.2)% Adjusted patient days (g) 142,178 141,677 0.4%
Average length of stay (days) (h) 3.32 3.53 (5.9)% Occupancy (i)
67.4% 70.4% Inpatient catheterization procedures 17,029 16,220 5.0%
Inpatient surgical procedures 8,702 8,495 2.4% (a) Selected
operating data includes consolidated hospitals 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 days. 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. 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, 2006 and 2005. Three Months Ended Nine Months
Ended June 30, June 30, 2006 2005 2006 2005 (in thousands) Income
from continuing operations $5,819 $2,634 $1,841 $6,926 Add: Income
tax expense 3,988 1,952 1,333 4,814 Minority interest share of
earnings of consolidated subsidiaries 5,161 3,956 12,769 12,357
Equity in net earnings of unconsolidated affiliates (1,408) (899)
(3,883) (2,554) Interest and other income, net (2,977) (868)
(5,748) (1,870) Interest expense 7,870 8,440 25,828 24,129
Impairment of long-lived assets 451 - 451 - Loss (gain) on disposal
of property, equipment and other assets (296) 148 (237) 204
Amortization 252 290 756 870 Depreciation 9,366 9,034 27,801 27,214
Share-based compensation expense 1,756 - 12,380 - Adjusted EBITDA
$29,982 $24,687 $73,291 $72,090 DATASOURCE: MedCath Corporation
CONTACT: O. Edwin French, President-Chief Executive Officer,
+1-704-708-6600, or James E. Harris, Chief Financial Officer,
+1-704-708-6600, both of MedCath Corporation Web site:
http://www.medcath.com/
Copyright
Medcath (NASDAQ:MDTH)
Historical Stock Chart
From Jun 2024 to Jul 2024
Medcath (NASDAQ:MDTH)
Historical Stock Chart
From Jul 2023 to Jul 2024