MedCath Corporation Announces Completion of Sale of Equity Interest in Joint Venture
January 05 2009 - 7:30AM
PR Newswire (US)
CHARLOTTE, N.C., Jan. 5 /PRNewswire-FirstCall/ -- MedCath
Corporation (NASDAQ:MDTH), a healthcare provider focused on high
acuity healthcare services, predominately the diagnosis and
treatment of cardiovascular disease, today announced the completion
of the sale of its ownership in a joint venture in its MedCath
Partners division. MedCath had previously indicated during its
fourth quarter earnings call on November 13, 2008, that its partner
had provided notification of its intent to acquire MedCath's
ownership in the joint venture, as allowed in the joint venture's
operating agreement following the venture's 10th anniversary. The
sale was completed December 31, 2008. MedCath received $6.9 million
in cash for its 51% ownership interest in the joint venture. For
the twelve month period ended September 30, 2008, the joint venture
contributed $11.2 million in net revenue, $3.3 million in Adjusted
EBITDA and $1.6 million in minority interest expense to MedCath's
consolidated earnings. MedCath will continue to provide certain
medical equipment to its former partner via a long-term lease,
which will contribute $0.7 million in net revenue and Adjusted
EBITDA annually. MedCath intends to use the proceeds from the sale
for general corporate purposes. 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; pre-opening expenses; 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 analyses 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 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 an interest in and operates nine
hospitals with a total of 676 licensed beds, located in Arizona,
Arkansas, California, Louisiana, New Mexico, South Dakota, and
Texas. MedCath is in the process of developing its tenth hospital,
which is anticipated to open in fall 2009, in Kingman, Ariz. In
addition, MedCath and its subsidiary MedCath Partners provide
services in diagnostic and therapeutic facilities in various
states. DATASOURCE: MedCath Corporation CONTACT: O. Edwin French,
President-Chief Executive Officer, or Jeff Hinton, Chief Financial
Officer, both of MedCath Corporation, +1-704-708-6600 Web site:
http://www.medcath.com/
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