CHARLOTTE, N.C., Nov. 11 /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 its unaudited
operating results for its fourth quarter and fiscal year which
ended September 30, 2009. Fourth Quarter 2009 Summary -- Net
revenue of $148.0 million, or $149.4 million after excluding the
impact of third-party payor cost report settlements that reduced
fourth quarter net revenue by $1.4 million, an increase of 2.0%
over the fourth quarter of fiscal 2008. -- Adjusted EBITDA of $11.0
million for the fourth quarter, excluding the impact of the $1.4
million third-party payor cost report settlements. -- Operating
cash flows from continuing operations of $10.7 million and Free
Cash Flows of $3.7 million. -- 4.6% increase in patient visits,
including inpatient and outpatient cases, and emergency department
visits, compared to the fourth quarter of fiscal 2008. -- EPS from
continuing operations of $(3.14) or Adjusted EPS from continuing
operations of $0.04, excluding pre-opening expense, stock-based
compensation expense and non-cash goodwill impairment expense and
other items. Fourth Quarter 2009 Results Due to an increase in
patient volumes and higher revenue per adjusted admission,
MedCath's net revenue for the fourth quarter of fiscal 2009
increased 1.7% to $148.0 million from $145.5 million in the fourth
quarter of fiscal 2008. Loss from operations, which includes a
$60.2 million non-cash goodwill impairment expense, was $(62.8)
million as compared to income from operations of $4.4 million in
the fourth quarter of fiscal 2008. MedCath's loss from continuing
operations was $(61.9) million, or $(3.14) per diluted share, in
the fourth quarter of fiscal 2009 compared to income from
continuing operations of $0.2 million, or $0.01 per diluted share,
in the fourth quarter of fiscal 2008. Adjusted EBITDA decreased to
$9.5 million from $11.5 million in the same period of the prior
year. MedCath's fourth quarter of fiscal 2009 results include a
$60.2 million non-cash impairment charge related to MedCath's
goodwill, which was primarily recognized as a result of MedCath's
going-private transaction in 1998. As required by generally
accepted accounting principles, MedCath tested goodwill for
impairment by comparing the fair value of the hospital division to
its carrying value including goodwill. As a result of MedCath's
sustained decline in market capitalization, MedCath determined that
goodwill was impaired as of September 30, 2009. The non-cash
impairment expense did not affect MedCath's operations, cash flow,
cash position or access to its bank facility. However, this
impairment expense reduced income from continuing operations by
$60.2 million and earnings per share by $(3.05) for the fourth
quarter of fiscal 2009. "Despite the net loss incurred this
quarter, we have continued to move forward with our transformation
strategy by increasing the number of acute care beds in our asset
base," said Ed French, MedCath's President and Chief Executive
Officer. "We most recently opened and received the necessary
license for our 70-bed Hualapai Mountain Medical Center, located in
Kingman, Arizona, and we look forward to servicing the needs of the
Kingman and northern Arizona community. This follows the opening of
our new patient tower at Louisiana Medical Center and Heart
Hospital in June 2009, increasing that hospital by 79 beds and
diversifying the hospital's service line. With the opening of
Hualapai Mountain Medical Center and the expansion of Louisiana
Medical Center and Heart Hospital, we now have 825 beds in service,
up 22% from a year earlier, allowing us the opportunity to provide
meaningful growth in the future." In addition to the non-cash
goodwill impairment expense, MedCath's operating results for the
fourth quarter of fiscal 2009 reflect the following items: -- $1.5
million, or $0.04, net per diluted share of the decrease in net
revenue and Adjusted EBITDA related to anticipated settlement of
third-party payor cost reports at two hospitals, and -- $0.9
million, or $0.03 per diluted share, in amortization expense
related to the termination of a management contract at MedCath
Partners Division. MedCath's fourth quarter of fiscal 2008 results
include the impact of certain items that collectively had a $1.0
million negative impact to net revenue and Adjusted EBITDA and a
$0.02 impact to EPS from continuing operations. Adjusted EBITDA
excludes share-based compensation and pre-opening expenses, but
these items are included as a component of (loss) income from
continuing operations. Share-based compensation expense totaled
$0.3 million in the fourth quarter of fiscal 2009, or $0.01 per
diluted share, compared to a benefit of $0.5 million, or $0.01 per
diluted share, in the fourth quarter of fiscal 2008. Pre-opening
expenses, which are related to the development of Hualapai Mountain
Medical Center, totaled $2.2 million in the fourth quarter of
fiscal 2009, or $0.05 per diluted share, compared to $0.1 million
in the fourth quarter of fiscal 2008. During the quarter, MedCath
completed the disposition of Sun City Cardiac Centers Associates
("Sun City") a partnership owned 60% by MedCath Partners, LLC, a
wholly owned subsidiary of MedCath, and 40% by certain physician
and other investors. As a result of this disposition, the operating
results of Sun City are classified as discontinued operations for
all reporting periods contained in this press release and
accompanying financial statements. Fourth Quarter Operating
Statistics, Cash Flow and Capital Expenditures Same facility
hospital admissions in the fourth quarter of fiscal 2009 were
6,707, down 3.7% compared with the fourth quarter of fiscal 2008.
Adjusted admissions totaled 10,262, up 3.0% compared with the
fourth quarter of fiscal 2008. Same facility hospital outpatient
cases totaled 16,136 in the fourth quarter of fiscal 2009, up 11.6%
in comparison with the fourth quarter of fiscal 2008. Total
uncompensated care, which includes charity care plus bad debt
expense, equaled 12.1% of hospital division net patient revenue
before the deduction for charity care in the fourth quarter of
fiscal 2009 versus 10.5% for the fourth quarter of fiscal 2008. The
increase in uncompensated care expense is primarily related to: 1.
An 8.3% increase in self-pay revenue in the quarter, and 2.
Additional reserves of approximately $2.0 million to reflect a
reduction in the collection rate and aging of self-pay and the
self-pay balance after insurance receivables. Net cash provided by
operating activities of continuing operations for the fourth
quarter of fiscal 2009 increased 8.1% to $10.7 million from $9.9
million in the fourth quarter of fiscal 2008. Cash paid for capital
expenditures during the fourth quarter of fiscal 2009 totaled $21.7
million, which included $7.0 million related to maintenance
expenditures and $14.7 million related to MedCath's construction
projects. MedCath's Free Cash Flows totaled $3.7 million for the
fourth quarter of fiscal 2009. As of September 30, 2009, MedCath's
balance sheet included cash and cash equivalents of $32.0 million,
total debt and capitalized leases of $127.8 million and total
assets of $590.4 million. Fiscal 2009 Results For the fiscal year
ended September 30, 2009, MedCath's net revenue was $602.0 million,
an increase of 1.8% when compared to the fiscal year ended
September 30, 2008. Adjusted EBITDA was $55.6 million, and loss
from continuing operations was ($58.4) million for fiscal 2009
compared to $74.8 million and $12.4 million, respectively for
fiscal 2008. EPS was ($2.98) per diluted share for fiscal 2009
compared to $0.61 per diluted share for fiscal 2008. MedCath's
fiscal year 2009 results include the impact of certain items that
collectively had a $4.5 million negative impact to net revenue, a
$12.8 million negative impact to Adjusted EBITDA and a $(3.65)
impact to EPS from continuing operations. MedCath's fiscal year
2008 actual results include the impact of certain items that
collectively had a $1.4 million negative impact to net revenue, a
$7.6 million negative impact to Adjusted EBITDA and a $(0.21)
impact to EPS from continuing operations. Share-based compensation
expense totaled $2.4 million in fiscal 2009, compared to $5.0
million in fiscal 2008. Adjusted EBITDA disclosed above does not
include this expense but the expense is included as a component of
(loss) income from continuing operations. Fiscal Year Operating
Statistics, Cash Flow and Capital Expenditures Same facility
hospital admissions for fiscal 2009 were 26,856, down 8.3% compared
with fiscal 2008. Adjusted admissions totaled 40,964, up 0.2%
compared with fiscal 2008. Same facility hospital outpatient cases
totaled 61,383 in fiscal 2009, up 11.5% in comparison with fiscal
2008. Total uncompensated care, which includes charity care plus
bad debt expense, equaled 9.6% of hospital division net patient
revenue before the deduction for charity care for fiscal 2009
versus 10.1% for fiscal 2008. Net cash provided by operating
activities of continuing operations for fiscal 2009 increased 48.8%
to $64.3 million from $43.2 million in the fourth quarter of fiscal
2008. Cash paid for capital expenditures during fiscal 2009 totaled
$93.9 million, which included $24.3 million related to maintenance
expenditures and $69.6 million related to MedCath's construction
projects. Free Cash Flows totaled $40.0 million for 2009 fiscal
year and $19.0 million for the 2008 fiscal year. Use of Non-GAAP
Financial Measures Included in the press release are certain
financial measures that are not generally accepted accounting
principles (\"non-GAAP"), such as adjusted earnings before
interest, taxes, depreciation, and amortization ("Adjusted
EBITDA"); adjusted diluted earnings per share from continuing
operations ("Adjusted EPS"); and Free Cash Flows. Adjusted EBITDA
represents MedCath's (loss) income from continuing operations
before interest expense; loss on early extinguishment of debt;
income tax (benefit) expense; depreciation; amortization;
share-based compensation expense; loss (gain) on disposal of
property, equipment and other assets; interest and other income;
equity in net earnings of unconsolidated affiliates; minority
interest share of earnings of consolidated subsidiaries; impairment
of goodwill; and pre-opening expense. Adjusted EPS represents
MedCath's diluted earnings per share from continuing operations for
the three months ended September 30, 2009 adjusted for third party
payor adjustments, impairment of intangible asset, impairment of
goodwill, share-based compensation expense, and pre-opening
expense. Free Cash Flows are defined as cash flows from continuing
operations less non-expansion capital expenditures. MedCath's
management uses Adjusted EBITDA to measure the performance of
MedCath's various operating entities, to compare actual results to
historical and budgeted results, and to make capital allocation
decisions. Free Cash Flows are utilized by management to measure
the quality of MedCath's earnings. Management provides Adjusted
EBITDA, Adjusted EPS, and Free Cash Flows 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, Adjusted EPS, and/or Free Cash
Flows as a financial performance measure. Because Adjusted EBITDA,
Adjusted EPS, and Free Cash Flows are non-GAAP measures, Adjusted
EBITDA, Adjusted EPS, and Free Cash Flows, 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 accompanies this press release that
reconciles historical Adjusted EBITDA to MedCath's income from
continuing operations, Adjusted EPS to diluted EPS from continuing
operations, and the computation of Free Cash Flows. Management will
discuss and answer questions regarding MedCath's quarterly results
on Thursday, November 12, 2009, 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
38797546. A live web cast will also be available on MedCath'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, November 26, 2009. To access the replay, domestic
callers should dial (800) 642-1687 and international callers should
dial (706) 645-9291. The archived conference ID is 38797546. 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
on high acuity services with the diagnosis and treatment of
cardiovascular disease being a primary service offering. MedCath
owns an interest in and operates ten hospitals with a total of 825
licensed beds, located in Arizona, Arkansas, California, Louisiana,
New Mexico, South Dakota, and Texas. In addition, MedCath and its
subsidiary MedCath Partners 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 including, but not limited to, enactment of changes in
federal law that would limit physician hospital ownership. 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. The preparation of MedCath's fourth quarter
operating results required management to make estimates and
assumptions that affect reported amounts of revenues and expenses.
There is a reasonable possibility that actual results may vary
significantly from those estimates. These various risks and
uncertainties are described in detail in "Risk Factors" in
MedCath's Annual Report or Form 10-K for the year ended September
30, 2008 filed with the Securities and Exchange Commission on
December 15, 2008, as updated in our Quarterly Report on Form 10-Q
for the fiscal quarter ended March 31, 2009. Copies of our filings
with the Securities and Exchange Commission, including exhibits,
are available at http://www.sec.gov/. MEDCATH CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per
share data) (Unaudited) Three Months Twelve Months Ended Ended
September 30, September 30, -------------- -------------- 2009 2008
2009 2008 ---- ---- ---- ---- Net revenue $147,966 $145,511
$602,042 $591,611 Operating expenses: Personnel expense 48,681
49,196 200,927 197,850 Medical supplies expense 43,336 41,835
171,451 161,880 Bad debt expense 14,876 11,828 49,421 43,671 Other
operating expenses 31,857 30,637 127,043 118,378 Pre-opening
expenses 2,223 143 3,563 786 Depreciation 8,591 7,623 31,755 30,041
Amortization 889 30 1,121 84 Loss (gain) on disposal of property,
equipment and other assets 133 (143) 271 248 Impairment of goodwill
60,174 - 60,174 - ------ ---- ------ ---- Total operating expenses
210,760 141,149 645,726 552,938 ------- ------- ------- -------
(Loss) income from operations (62,794) 4,362 (43,684) 38,673 Other
income (expenses): Interest expense (1,452) (2,642) (6,798)
(14,300) Loss on early extinguishment of debt - - (6,702) -
Interest and other income 12 100 237 2,029 Equity in net earnings
of unconsolidated affiliates 2,013 1,049 9,057 7,891 ----- -----
----- ----- Total other income (expense), net 573 (1,493) (4,206)
(4,380) --- ------ ------ ------ (Loss) income from continuing
operations before minority interest and income taxes (62,221) 2,869
(47,890) 34,293 Minority interest share of earnings of consolidated
subsidiaries (872) (1,181) (9,328) (12,546) ---- ------ ------
------- (Loss) income from continuing operations before income
taxes (63,093) 1,688 (57,218) 21,747 Income tax (benefit) expense
(1,193) 1,533 1,200 9,374 ------ ----- ----- ----- (Loss) income
from continuing operations (61,900) 155 (58,418) 12,373 Income from
discontinued operations, net of taxes 3,294 314 8,136 8,617 -----
--- ----- ----- Net (loss) income $(58,606) $469 $(50,282) $20,990
======== ==== ======== ======= Earnings (loss) per share, basic
Continuing operations $(3.14) $0.01 $(2.96) $0.62 Discontinued
operations 0.17 0.01 0.41 0.43 ---- ---- ---- ---- Earnings (loss)
per share, basic $(2.97) $0.02 $(2.55) $1.05 ------ ----- ------
----- Earnings (loss) per share, diluted Continuing operations
$(3.14) $0.01 $(2.96) $0.61 Discontinued operations 0.17 0.01 0.41
0.43 ---- ---- ---- ---- Earnings (loss) per share, diluted $(2.97)
$0.02 $(2.55) $1.04 ------ ----- ------ ----- Weighted average
number of shares, basic 19,740 19,590 19,684 19,996 Dilutive effect
of stock options and restricted stock - 65 - 73 --- -- --- --
Weighted average number of shares, diluted 19,740 19,655 19,684
20,069 ====== ====== ====== ====== MEDCATH CORPORATION CONSOLIDATED
BALANCE SHEETS (In thousands, except share data) September 30,
September 30, 2009 2008 ------------- ------------- (Unaudited)
Current assets: Cash and cash equivalents $32,014 $93,836
Restricted cash - 3,154 Accounts receivable, net 70,410 82,324
Income tax receivable, net - 3,091 Medical supplies 18,261 15,340
Deferred income tax assets 12,201 9,769 Prepaid expenses and other
current assets 13,969 9,756 Current assets of discontinued
operations 30,011 22,506 ------ ------ Total current assets 176,866
239,776 Property and equipment, net 382,684 323,094 Investments in
affiliates 14,055 15,285 Goodwill - 60,174 Other intangible assets,
net 378 1,133 Other assets 16,465 8,378 Long-term assets of
discontinued operations - 5,616 ---- ----- Total assets $590,448
$653,456 ======== ======== Current liabilities: Accounts payable
$40,979 $41,404 Income tax payable 642 - Accrued compensation and
benefits 18,744 16,744 Other accrued liabilities 24,860 23,322
Current portion of long-term debt and obligations under capital
leases 21,243 31,920 Current liabilities of discontinued operations
10,165 11,282 ------ ------ Total current liabilities 116,633
124,672 Long-term debt 102,727 115,628 Obligations under capital
leases 3,791 2,087 Deferred income tax liabilities 13,874 12,352
Other long-term obligations 8,893 4,454 ----- ----- Total
liabilities 245,918 259,193 Minority interest in equity of
consolidated subsidiaries 25,632 24,667 Stockholders' equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized;
none issued - - Common stock, $0.01 par value, 50,000,000 shares
authorized; 21,697,380 issued and 19,743,019 outstanding at
September 30, 2009; 21,553,054 issued and 19,598,693 outstanding at
September 30, 2008 216 216 Paid-in capital 455,259 455,494
Accumulated deficit (91,420) (41,138) Accumulated other
comprehensive loss (360) (179) Treasury stock, at cost; 1,954,361
shares at September 30, 2009 1,954,361 shares at September 30, 2008
(44,797) (44,797) ------- ------- Total stockholders' equity
318,898 369,596 ------- ------- Total liabilities and stockholders'
equity $590,448 $653,456 ======== ======== MEDCATH CORPORATION
SELECTED OPERATING DATA (In thousands, except per share data and
selected operating data) (Unaudited) Three Months Ended Twelve
Months Ended September 30, September 30, -----------------------
----------------------- 2009 2008 % Change 2009 2008 % Change
----------------------- ----------------------- Statement of
Operations Data: Net revenue $147,966 $145,511 1.7% $602,042
$591,611 1.8% Adjusted EBITDA (1) $9,538 $11,530 (17.3)% $55,590
$74,810 (25.7)% (Loss) income from operations $(62,794) $4,362 N/M
$(43,684) $38,673 N/M (Loss) income from continuing operations
$(61,900) $155 N/M $(58,418) $12,373 N/M (Loss) earnings per share
from continuing operations, basic $(3.14) $0.01 N/M $(2.96) $0.62
N/M (Loss) earnings per share from continuing operations, diluted
$(3.14) $0.01 N/M $(2.96) $0.61 N/M (1) See Supplemental Financial
Disclosure--Reconciliation of GAAP Financial Measures to Non-GAAP
Financial Measures. N/M - Not meaningful Three Months Ended Twelve
Months Ended September 30, September 30, -----------------------
----------------------- % % 2009 2008 Change 2009 2008 Change
----------------------- ----------------------- Selected Operating
Data (a): Number of hospitals 7 7 7 7 Licensed beds (c) 588 509 588
509 Staffed and available beds (d) 502 464 502 464 Admissions (e)
6,707 6,980 (3.9)% 26,856 29,360 (8.5)% Adjusted admissions (f)
10,262 9,976 2.9% 40,964 40,971 (0.0)% Patient days (g) 24,688
25,500 (3.2)% 103,342 107,353 (3.7)% Adjusted patient days (h)
37,720 36,776 2.6% 157,638 150,559 4.7% Average length of stay
(days) (i) 3.68 3.65 0.8% 3.85 3.66 5.2% Occupancy (j) 53.5% 59.7%
56.4% 63.4% Inpatient catheterization procedures (k) 3,187 3,735
(14.7)% 13,257 15,979 (17.0)% Inpatient surgical procedures (l)
2,050 2,050 0.0% 8,181 8,383 (2.4)% Hospital net revenue $141,976
$139,487 1.8% $578,432 $565,787 2.2% Combined Operating Data (b):
Number of hospitals 9 9 9 9 Licensed beds (c) 755 676 755 676
Staffed and available beds (d) 665 629 665 629 Admissions (e) 9,143
9,997 (8.5)% 38,055 40,176 (5.3)% Adjusted admissions (f) 14,323
14,791 (3.2)% 59,168 58,669 0.9% Patient days (g) 32,572 34,732
(6.2)% 137,889 141,346 (2.4)% Adjusted patient days (h) 50,630
51,281 (1.3)% 212,826 205,032 3.8% Average length of stay (days)
(i) 3.56 3.47 2.6% 3.62 3.52 2.8% Occupancy (j) 53.2% 60.0% 56.8%
61.6% Inpatient catheterization procedures (k) 3,801 4,524 (16.0)%
16,230 19,148 (15.2)% Inpatient surgical procedures (l) 2,625 2,666
(1.5)% 10,573 10,954 (3.5)% Hospital net revenue $180,562 $179,296
0.7% $739,111 $725,188 1.9% (a) Selected operating data includes
consolidated hospitals in operation 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) Combined
operating data includes hospitals in operation as of the end of the
period reported in continuing operations including hospitals which
are accounted for using the equity method in our consolidated
financial statements. (c) 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. (d) Staffed and available beds represent the number of beds
that are readily available for patient use at the end of the
period. (e) Admissions represent the number of patients admitted
for inpatient treatment. (f) 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.
(g) Patient days represent the total number of days of care
provided to inpatients. (h) Adjusted patient days is a general
measure of combined inpatient and outpatient volume. We computed
adjusted patient days by dividing gross patient revenue by gross
inpatient revenue and then multiplying the quotient by patient
days. (i) Average length of stay (days) represents the average
number of days inpatients stay in our hospitals. (j) 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. (k) Inpatients with a catheterization procedure
represent the number of inpatients with a procedure performed in
one of the hospitals' catheterization labs during the period. (l)
Inpatient surgical procedures represent the number of surgical
procedures performed on inpatients during the period. MEDCATH
CORPORATION SUPPLEMENTAL FINANCIAL DISCLOSURE - RECONCILIATION OF
GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES (Unaudited)
The following table reconciles MedCath's income from continuing
operations as derived directly from MedCath's consolidated
financial statements to Adjusted EBITDA for the three and twelve
months ended September 30, 2009 and 2008. Twelve Months Three
Months Ended Ended September September 30, 30, ------------------
---------------- 2009 2008 2009 2008 ---- ---- ---- ---- (in
thousands) (in thousands) (Loss) income from continuing operations
$(61,900) $155 $(58,418) $12,373 Add: Income tax (benefit) expense
(1,193) 1,533 1,200 9,374 Minority interest share of earnings of
consolidated subsidiaries 872 1,181 9,328 12,546 Equity in net
earnings of unconsolidated affiliates (2,013) (1,049) (9,057)
(7,891) Interest and other income (12) (100) (237) (2,029) Loss on
early extinguishment of debt - - 6,702 - Interest expense 1,452
2,642 6,798 14,300 Impairment of goodwill 60,174 - 60,174 - Loss
(gain) on disposal of property, equipment and other assets 133
(143) 271 248 Amortization 889 30 1,121 84 Depreciation 8,591 7,623
31,755 30,041 Pre-opening expenses 2,223 143 3,563 786 Share-based
compensation expense 322 (485) 2,390 4,978 --- ---- ----- -----
Adjusted EBITDA $9,538 $11,530 $55,590 $74,810 ====== =======
======= ======= The following table reconciles MedCath's diluted
earnings per share from continuing operations as derived directly
from MedCath's consolidated financial statements to Adjusted EPS
from continuing operations for the three months ended September 30,
2009 and 2008. Twelve Months Three Months Ended Ended September
September 30, 30, ------------------- ----------------- 2009 2008
2009 2008 ---- ---- ---- ---- Diluted earnings per share ($3.14)
$0.01 ($2.96) $0.61 Add: Third party payor adjustments 0.04 0.02
0.12 0.03 Termination of management contract 0.03 - 0.03 -
Impairment of goodwill 3.05 - 3.05 - Operating expense as
previously disclosed - - 0.28 0.02 Share-based compensation expense
0.01 (0.01) 0.08 0.14 Pre-opening expense 0.05 - 0.09 0.02 ---- ---
---- ---- Adjusted diluted earnings per share $0.04 $0.02 $0.69
$0.82 ===== ===== ===== ===== The following table reflects the
calculation of adjusted free cash flow and adjusted free cash flow
per diluted share. Free Cash Flows is commonly defined as cash
flows from continuing operations less capital expenditures. Twelve
Months Three Months Ended Ended September September 30, 30,
------------------- ----------------- 2009 2008 2009 2008 ---- ----
---- ---- (in thousands) Cash flow from continuing operations
$10,722 $9,894 $64,333 $43,190 Less: Non-expansion capital
expenditures 6,984 8,022 24,332 24,175 ----- ----- ------ ------
Free cash flow $3,738 $1,872 $40,001 $19,015 ====== ====== =======
======= DATASOURCE: MedCath Corporation CONTACT: O. Edwin French,
President/Chief Executive Officer, +1-704-815-7700, or Art Parker,
Chief Financial Officer, +1-704-815-7700 Web Site:
http://www.medcath.com/
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