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LifeCare Holdings, Inc. Announces First Quarter Results
Date:5/15/2008

PLANO, Texas, May 15 /PRNewswire/ -- LifeCare Holdings, Inc. (the "Company") today announced its operating results for the first quarter ended March 31, 2008.

Net Revenues

Our net patient service revenue increased by $6.4 million, or 7.8%, for the three months ended March 31, 2008, to $88.8 million from $82.4 million for the comparable period in 2007. Patient days in the 2008 period were 3,480, or 6.0%, greater than the same period in 2007.

The increase in our net patient service revenue was comprised of a favorable benefit of $4.9 million from the increase in patient days and $1.5 million as the result of higher rates on a per patient day basis. During the three months ended March 31, 2008, our net patient service revenue per patient day was $1,438, which represented an increase of 1.7% compared to the same period in 2007. The increase in net patient service revenue on a per patient day basis during the 2008 period was primarily the result of annual inflationary increases in our standard charge rates and certain of our contracts with commercial payors, our continued focus on treating higher acuity patients and an increase in the percentage of our revenues generated from commercial payors. These favorable items were partially offset by a decline in Medicare net patient service revenue per patient day from the unfavorable annual regulatory updates implemented by Medicare in July 2007.

Expenses

Total expenses increased by $6.6 million to $91.5 million for the three months ended March 31, 2008 as compared to $84.9 million for the same period in 2007. Of this $6.6 million increase in total expenses, approximately $3.1 million was attributable to an increase in salaries, wages, and benefits. This increase was due primarily to our increase in operating capacity, patient days and inflationary increases.

The remaining $3.5 million of the total $6.6 million increase was comprised of an increase in rent expense of $1.0 million
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SOURCE LifeCare Holdings, Inc.
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