CHARLOTTE, N.C., Feb 3 /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 first quarter of fiscal 2010, which ended
December 31, 2009. First Quarter 2010 Highlights -- Same facility
hospital admissions and outpatient cases were up 2.0% and 5.8%,
respectively, for the first quarter of fiscal 2010 compared to the
same period of the prior year. -- Same facility hospital
non-cardiovascular admissions increased 17% for the first quarter
of 2010 compared to the same period of the prior year. -- Same
facility hospital emergency department visits increased 14.7% in
the first quarter of fiscal 2010 compared to the same period of the
prior year. References in this release to same facility results
exclude the impact of Hualapai Mountain Medical Center ("HMMC"),
our newest hospital located in Kingman, Arizona, for the first
quarter of fiscal 2010, its first quarter of operations. First
Quarter 2010 Results MedCath's net revenue for the first quarter of
fiscal 2010 decreased 2.0% to $147.3 million from $150.2 million in
the first quarter of fiscal 2009. Contributing to the revenue
decline was lower cases and net revenue related to cardiovascular
services, primarily heart surgeries, offset by revenue from
MedCath's newest hospital and revenue growth in non-cardiovascular
cases at several recently expanded hospitals. During the quarter,
non-cardiovascular inpatient net revenue represented 25% of net
inpatient revenue, compared to 17% in the first quarter of 2009.
Loss from continuing operations, net of taxes was $(2.5) million,
or $(0.13) per diluted share compared to $(1.9) million, or $(0.10)
per diluted share, for the same period of the prior year. Adjusted
EBITDA decreased to $7.8 million for the first quarter of fiscal
2010 from $16.1 million in the same period of the prior year. Same
Facility First Quarter 2010 Results Same facility net revenue
decreased 5.0% from $150.2 million to $142.7 million for the first
quarter of fiscal 2010 compared to the same period of the prior
year. Same facility loss from continuing operations, net of taxes
was $(0.2) million, or $(0.01) per diluted share, compared to a
loss from continuing operations, net of taxes of $(1.9) million in
the first quarter of fiscal 2009, or $(0.10) per diluted share.
Same facility Adjusted EBITDA was $10.1 million for the first
quarter of fiscal 2010. "The significant increase we experienced
this quarter in our non-cardiovascular related net patient revenue
is indicative that expansion at several of our hospitals is
providing benefit to the communities we serve as well as to our
Company," said Ed French, MedCath's President and Chief Executive
Officer. "Although we are disappointed with our core cardiovascular
net patient revenue this quarter, we are encouraged by our overall
increase in admissions and outpatient cases." Adjusted EBITDA
excludes share-based compensation and pre-opening expenses, but
these items are included as a component of loss from continuing
operations. Share-based compensation expense totaled $0.6 million
in the first quarter of fiscal 2010, or $0.02 per diluted share,
compared to $1.0 million, or $0.03 per diluted share, in the first
quarter of fiscal 2009. Pre-opening expenses related to the
development of HMMC totaled $0.9 million, or $0.02 per diluted
share, in the first quarter of fiscal 2010, compared to $0.2
million, or $0.01 per diluted share, in the first quarter of fiscal
2009. HMMC contributed $4.6 million to net revenue, $(3.2) million
to EBITDA, which includes $0.9 million of pre-opening expenses, and
$(2.3) million to loss from continuing operations, net of taxes, or
$(0.12) per diluted share. First Quarter Operating Statistics, Cash
Flow and Capital Expenditures Same facility hospital admissions in
the first quarter of fiscal 2010 were 6,938, up 2.0% compared to
the first quarter of fiscal 2009. Adjusted admissions totaled
10,043, up 1.7% compared with the first quarter of fiscal 2009.
Same facility hospital outpatient cases totaled 16,671 in the first
quarter of fiscal 2010, up 5.8% compared to the first quarter of
fiscal 2009. Total same facility uncompensated care, which includes
charity care plus bad debt expense, equaled 9.6% of same facility
hospital division net patient revenue before the deduction for
charity care in the first quarter of fiscal 2010 versus 8.5% for
the first quarter of fiscal 2009. Net cash provided by operating
activities of continuing operations for the first quarter of fiscal
2010 was $3.9 million, down from $18.9 million in the first quarter
of fiscal 2009. Cash provided by operating activities for the first
quarter of fiscal 2010 includes $7.3 million cash used by HMMC,
MedCath's newest hospital. Cash paid for capital expenditures
during the first quarter of fiscal 2010 totaled $9.3 million, which
included $4.5 million related to maintenance expenditures and $4.8
million related to MedCath's construction projects. As of the first
quarter of fiscal 2010, MedCath's balance sheet included cash and
cash equivalents of $22.8 million, total debt and capitalized
leases of $122.2 million and total assets of $558.1 million. 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"); and adjusted diluted (loss) earnings per share from
continuing operations ("Adjusted EPS"). Adjusted EBITDA represents
MedCath's loss from continuing operations, net of taxes before
interest expense; loss on early extinguishment of debt; income tax
benefit; depreciation; amortization; share-based compensation
expense; loss on disposal of property, equipment and other assets;
interest and other income; equity in net earnings of unconsolidated
affiliates; net income attributable to noncontrolling interest; and
pre-opening expense. Adjusted EPS represents MedCath's diluted loss
per share from continuing operations for the three months ended
December 31, 2009 adjusted for share-based compensation expense and
pre-opening expense. 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. Further, management believes
that many investors in MedCath also invest in, or have knowledge
of, other healthcare companies that use Adjusted EBITDA and
Adjusted EPS as a financial performance measure. Because Adjusted
EBITDA and Adjusted EPS are non-GAAP measures, Adjusted EBITDA and
Adjusted EPS, 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 and Adjusted
EPS to diluted EPS from continuing operations. Same facility
non-GAAP measures are also computed as defined above with the
exception that they exclude the impact of Hualapai Mountain Medical
Center. Management will discuss and answer questions regarding
MedCath's quarterly results on Thursday, February 4, 2010, during a
10 a.m. EST 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 52092862. 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. EST, February 18, 2010. To
access the replay, domestic callers should dial (800) 642-1687 and
international callers should dial (706) 645-9291. The archived
conference ID is 52092862. 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 first 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, 2009 filed with the Securities and Exchange
Commission on December 15, 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 Ended December 31,
------------------------------- 2009 2008 ---- ---- Net revenue
$147,260 $150,245 Operating expenses: Personnel expense 51,821
50,169 Medical supplies expense 41,859 41,642 Bad debt expense
11,925 11,429 Other operating expenses 34,452 31,902 Pre-opening
expenses 866 207 Depreciation 9,035 7,801 Amortization 8 30 Loss on
disposal of property, equipment and other assets 137 73 --- --
Total operating expenses 150,103 143,253 ------- ------- (Loss)
income from operations (2,843) 6,992 Other income (expenses):
Interest expense (1,813) (2,857) Loss on early extinguishment of
debt - (6,961) Interest and other income 74 101 Equity in net
earnings of unconsolidated affiliates 1,516 2,065 ----- ----- Total
other income (expense), net (223) (7,652) ---- ------ Loss from
continuing operations before income taxes (3,066) (660) Income tax
benefit (1,539) (1,108) ------ ------ (Loss) income from continuing
operations (1,527) 448 (Loss) income from discontinued operations,
net of taxes (288) 4,921 ---- ----- Net (loss) income (1,815) 5,369
Less: Net income attributable to noncontrolling interest (841)
(3,123) ---- ------ Net (loss) income attributable to MedCath
Corporation $(2,656) $2,246 ======= ====== Amounts attributable to
MedCath Corporation common stockholders: Loss from continuing
operations, net of taxes $(2,511) $(1,915) (Loss) income from
discontinued operations, net of taxes (145) 4,161 ---- ----- Net
(loss) income $(2,656) $2,246 ======= ====== (Loss) earnings per
share, basic Income from continuing operations attributable to
MedCath Corporation common stockholders $(0.13) $(0.10) Income
(loss) from discontinued operations attributable to MedCath
Corporation common stockholders - 0.21 --- ---- (Loss) earnings per
share, basic $(0.13) $0.11 ------ ----- (Loss) earnings per share,
diluted Income from continuing operations attributable to MedCath
Corporation common stockholders $(0.13) $(0.10) Income (loss) from
discontinued operations attributable to MedCath Corporation common
stockholders - 0.21 --- ---- (Loss) earnings per share, diluted
$(0.13) $0.11 ------ ----- Weighted average number of shares, basic
19,743 19,599 Dilutive effect of stock options and restricted stock
- - --- --- Weighted average number of shares, diluted 19,743
19,599 ====== ====== MEDCATH CORPORATION CONSOLIDATED BALANCE
SHEETS (In thousands, except share data) December 31, September 30,
2009 2009 ---- ---- (Unaudited) Current assets: Cash and cash
equivalents $22,760 $32,014 Accounts receivable, net 72,596 70,410
Income tax receivable 1,037 - Medical supplies 18,929 18,261
Deferred income tax assets 12,069 12,201 Prepaid expenses and other
current assets 15,313 13,969 Current assets of discontinued
operations 11,942 30,011 ------ ------ Total current assets 154,646
176,866 Property and equipment, net 383,850 385,926 Investments in
affiliates 7,931 14,055 Other intangible assets, net 327 378 Other
assets 11,331 13,223 ------ ------ Total assets $558,085 $590,448
======== ======== Current liabilities: Accounts payable $39,562
$40,979 Income tax payable - 642 Accrued compensation and benefits
16,136 18,744 Other accrued liabilities 20,975 24,860 Current
portion of long-term debt and obligations under capital leases
18,279 21,243 Current liabilities of discontinued operations 9,907
10,165 ----- ------ Total current liabilities 104,859 116,633
Long-term debt 99,058 101,871 Obligations under capital leases
4,861 4,647 Deferred income tax liabilities 14,069 13,874 Other
long-term obligations 7,436 8,893 ----- ----- Total liabilities
230,283 245,918 Noncontrolling interests - redeemable 4,297 7,448
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; 21,654,768 issued and 20,511,874
outstanding at December 31, 2009; 21,595,880 issued and 20,150,556
outstanding at September 30, 2009 216 216 Paid-in capital 455,273
455,259 Accumulated deficit (94,076) (91,420) Accumulated other
comprehensive loss (304) (360) Treasury stock, at cost; 1,084,006
shares at December 31, 2009 1,445,324 shares at September 30, 2009
(44,797) (44,797) ------- ------- Total MedCath Corporation
stockholders' equity 316,312 318,898 Noncontrolling interest 7,193
18,184 ----- ------ Total equity 323,505 337,082 ------- -------
Total liabilities and equity $558,085 $590,448 ======== ========
MEDCATH CORPORATION SELECTED OPERATING DATA (In thousands, except
per share data and selected operating data) (Unaudited) Three
Months Ended December 31, ------------------------------ 2009 2008
% Change ---- ---- -------- Statement of Operations Data: Net
revenue $147,260 $150,245 (2.0)% Adjusted EBITDA (1) $7,811 $16,101
(51.5)% (Loss) income from operations $(2,843) $6,992 (140.7)% Loss
from continuing operations, net of taxes $(2,511) $(1,915) (31.1)%
Loss per share from continuing operations, basic $(0.13) $(0.10)
(30.0)% Loss per share from continuing operations, diluted $(0.13)
$(0.10) (30.0)% (1) See Supplemental Financial
Disclosure--Reconciliation of GAAP Financial Measures to Non-GAAP
Financial Measures. Three Months Ended December 31,
------------------------------- 2009 Same 2009 2008 % Change
Facility % Change ---- ---- -------- --------- -------- Selected
Operating Data (a): Number of hospitals 8 7 7 Licensed beds ( c )
658 509 588 Staffed and available beds ( d ) 572 463 502 Admissions
( e ) 7,163 6,801 5.3% 6,938 2.0% Adjusted admissions ( f ) 10,497
9,874 6.3% 10,043 1.7% Patient days ( g ) 26,352 25,181 4.7% 25,423
1.0% Adjusted patient days ( h ) 39,336 37,044 6.2% 37,526 1.3%
Average length of stay (days) ( i ) 3.68 3.70 (0.5)% 3.66 (1.1)%
Occupancy ( j ) 50.1% 59.1% 55.0% Inpatient catheterization
procedures ( k ) 3,307 3,552 (6.9)% 3,265 (8.1)% Inpatient surgical
procedures ( l ) 1,949 2,001 (2.6)% 1,909 (4.6)% Hospital net
revenue $142,346 $144,225 (1.3)% $137,753 (4.5)% Combined Operating
Data (b): Number of hospitals 10 9 9 Licensed beds ( c ) 825 676
755 Staffed and available beds ( d ) 735 628 665 Admissions ( e )
9,645 9,807 (1.7)% 9,420 (3.9)% Adjusted admissions ( f ) 14,626
14,622 0.0% 14,172 (3.1)% Patient days ( g ) 34,167 34,189 (0.1)%
33,238 (2.8)% Adjusted patient days ( h ) 52,205 51,162 2.0% 50,395
(1.5)% Average length of stay (days) ( i ) 3.54 3.49 1.4% 3.53 1.1%
Occupancy ( j ) 50.5% 59.2% 54.3% Inpatient catheterization
procedures ( k ) 3,997 4,385 (8.8)% 3,955 (9.8)% Inpatient surgical
procedures ( l ) 2,490 2,622 (5.0)% 2,450 (6.6)% Hospital net
revenue $182,340 $185,023 (1.5)% $177,747 (3.9)% (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. Same facility for the three months ended December 31,
2009 exclude the results of Hualapai Mountain Medical Center (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 (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 the loss from
continuing operations, net of taxes attributable to MedCath
Corporation's common stockholders as derived directly from MedCath
Corporation's consolidated financial statements to Adjusted EBITDA
for the three months ended December 31, 2009 and 2008. Three Months
Ended December 31, ------------------------------ 2009 2008 ----
---- (in thousands) Loss from continuing operations, net of taxes
$(2,511) $(1,915) Add: Income tax benefit (1,539) (1,108) Net
income attributable to noncontrolling interest 984 2,363 Equity in
net earnings of unconsolidated affiliates (1,516) (2,065) Interest
and other income (74) (101) Loss on early extinguishment of debt -
6,961 Interest expense 1,813 2,857 Loss on disposal of property,
equipment and other assets 137 73 Amortization 8 30 Depreciation
9,035 7,801 Pre-opening expenses 866 207 Share-based compensation
expense 608 998 --- --- Adjusted EBITDA $7,811 $16,101 ======
======= The following table reconciles MedCath Corporation's
diluted loss per share from continuing operations, net of taxes
attributable to MedCath Corporations common stockholders as derived
directly from MedCath's consolidated financial statements to
Adjusted diluted (loss) earnings per share from continuing
operations for the three months ended December 31, 2009 and 2008.
Three Months Ended December 31, -------------------------------
2009 2008 ---- ---- Diluted loss per share $(0.13) $(0.10) Add:
Loss on debt refinancing - 0.22 Share-based compensation expense
0.02 0.03 Pre-opening expense 0.02 0.01 ---- ---- Adjusted diluted
(loss) earnings per share ($0.09) $0.16 ====== ===== 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. Three Months Ended December 31,
------------------------------ 2009 2008 ---- ---- (in thousands)
Cash flow from continuing operations $3,878 $18,854 Less:
Non-expansion capital expenditures 4,530 6,320 ----- ----- Free
cash flow $(652) $12,534 ===== ======= DATASOURCE: MedCath
Corporation CONTACT: O. Edwin French, President/Chief Executive
Officer, +1-704-815-7700, Art Parker, Chief Financial Officer,
+1-704-815-7700 Web Site: http://www.medcath.com/
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