LifeCare Holdings, Inc. Announces Year-e...( PLANO Texas March 28 /- LifeCare ...),Health

PLANO, Texas, March 28 /PRNewswire/ -- LifeCare Holdings, Inc. (the "Company") today announced its operating results for the three months and year ended December 31, 2007.

Three Months Ended December 31, 2007

Net Revenues

Our net patient service revenue of $79.7 million for the three months ended December 31, 2007, decreased by $0.1 million as compared to the same period in 2006. Patient days increased by 1,027, or 1.8%, and admissions increased by 32, or 1.5%, during the 2007 period. During the three months ended December 31, 2007, our net patient service revenue per patient day was $1,390 as compared to $1,416 per patient day for the same period in 2006, which represents a decrease of 1.8%. This decrease on a per patient day basis was primarily the result of the recent unfavorable reimbursement changes implemented by CMS during 2007, partially offset by an increase in the percentage of our revenues generated from commercial payors.

Expenses

Total expenses increased by $17.1 million to $117.4 million for the three months ended December 31, 2007 as compared to $100.3 million for the comparable period in 2006. Included in expenses for the 2007 and 2006 periods are impairment charges of $35.0 million and $19.0 million, respectively. Excluding the impairment charges, expenses increased by $1.1 million to $82.4 million for the 2007 period as compared to $81.3 million for the 2006 period.

Rent expense increased by $1.4 million during the 2007 period in connection with an 11.5% increase in average licensed bed capacity. The provision for doubtful accounts decreased by $2.9 million during the 2007 period as compared to the same period in 2006 due primarily to a $1.7 million charge for the impact of a conversion to a new patient accounting system during the 2006 period.

Net interest expense increased by $1.2 million during the 2007 period as the result of the increase in LIBOR rates during 2007 and the increased margin
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