MedCath Corporation Announces Plans to Develop a 105 Bed General Acute Care Hospital in Fast-Growing Kingman, Ariz.
August 14 2007 - 7:30AM
PR Newswire (US)
Hospital to be Named 'Hualapai Mountain Medical Center' CHARLOTTE,
N.C., Aug. 14 /PRNewswire-FirstCall/ -- MedCath Corporation
(NASDAQ:MDTH) took another step in its strategy of focusing on high
acuity general acute care hospital services by announcing today
development plans for a new 105 bed capacity general acute care
hospital in Kingman, Ariz. Construction of the approximately
200,000 square foot Hualapai Mountain Medical Center is expected to
begin early calendar 2008 and is anticipated to be completed in the
fall of 2009. Upon its opening, the hospital plans to have 72 beds
in service and shelled space for 33 additional beds to support
future growth. The hospital's name reflects its proximity to the
Hualapai Mountains, a local landmark. "Our initial 72 bed facility
will optimize access for patients and delivery of high acuity
health care services. The region is expecting growth well beyond
the current patient capacity of the area," said O. Edwin French,
MedCath's President and Chief Executive Officer. "Providing for a
105 bed capacity hospital will help ensure adequate hospital
bed-to-patient ratios in the rapidly expanding regional area of
Kingman." The hospital will be developed jointly with local
physicians who collectively will own approximately 21.9% of the
limited liability company that will own the hospital, with MedCath
owning approximately 78.1%. The hospital will provide mostly
general acute care services specifically focusing on high acuity
services needed by the growing population of Kingman, Arizona and
northern Arizona. "Partnering with doctors focused on quality care,
providing state-of-the- art acute care facilities and technology,
and including a strong heart program among its general services
leverages the strengths of venture," French said. "The new 105 bed
Hualapai Mountain Medical Center embodies the MedCath vision as the
company evolves to be the high acuity healthcare provider among
acute care companies." The Northwestern Independent Physician
Association represents the physician group that is jointly
developing Hualapai Mountain Medical Center with MedCath. "Our
diverse physician group has, for several years, wanted to develop a
state-of-the-art hospital that offers quality services and in which
physicians hold key leadership roles in operations and
decision-making for the hospital," said Paul Kalanithi, M.D., an
interventional cardiologist and President of the group. "The new
Hualapai Mountain Medical Center accomplishes our goal. We will
participate in shared governance with MedCath, and we will be
involved in all aspects of the hospital's development, from
conceptual design through service development." Total development
cost for the project is expected to total approximately $68.5
million, including preopening expenses of $5.5 million. MedCath
anticipates that net revenue, Adjusted EBITDA and net income from
the project will be within the following ranges: ($ in millions) FY
2009 FY 2010 FY 2011 Net Revenue Range $ - - $45.0 $50.0 $60.0
$65.0 Adjusted EBITDA Range $(4.5) $(4.0) $6.8 $8.0 $10.2 $11.7 Net
Income/(loss) Range $(3.5) $(3.0) $0.4 $1.7 $1.8 $2.6 The limited
liability company that will own the hospital has acquired the land
associated with the project and has commenced developing design and
architecture plans. MedCath is also working with officials for the
City of Kingman to obtain necessary approvals to begin
construction. Hualapai Mountain Medical Center and MedCath's
planned 120 bed addition to Louisiana Medical Center and Heart
Hospital, announced earlier this year, will increase MedCath's bed
capacity by approximately 45% on a consolidated basis. MedCath
Corporation, headquartered in Charlotte, N.C., is a healthcare
provider focused on high acuity services with the diagnosis and
treatment of cardiovascular disease being a primary service
offering. MedCath owns interests in and operates 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 and its subsidiary MedCath Partners manage the
cardiovascular program at various hospitals and provide services in
diagnostic and therapeutic facilities 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 "Risk Factors" in
MedCath's Registration Statement on Form S-3/A filed with the
Securities and Exchange Commission on March 29, 2007. A copy of
this registration statement, including exhibits, is available on
the internet site of the Securities and Exchange Commission at
http://www.sec.gov/. This release contains references to Adjusted
EBITDA, a measure of MedCath's projected financial performance that
is not calculated and presented in conformity with generally
accepted accounting principles ("GAAP"). Adjusted EBITDA represents
MedCath's income (loss) from continuing operations before interest
expense; interest and other income, net; income tax expense
(benefit); depreciation; amortization; share-based compensation
expense; gain (loss) on disposal of property, equipment and other
assets; loss on early extinguishment of debt; equity in net
earnings of unconsolidated affiliates; and minority interest share
of earnings of consolidated subsidiaries. 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. DATASOURCE: MedCath Corporation
CONTACT: O. Edwin French, President & Chief Executive Officer,
or James E. Harris, Chief Financial Officer, both of MedCath
Corporation, +1-704-708-6600 Web site: http://www.medcath.com/
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