Navigation Links
MedCath Corporation Reports First Quarter Earnings
Date:2/4/2009

CHARLOTTE, N.C., Feb. 4 /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 operating results for its first quarter of fiscal 2009, which ended December 31, 2008.

    Highlights

    -- Net revenue up 4.4% compared with first quarter of fiscal 2008

    -- Adjusted EBITDA of $17.2 million

    -- Operating cash flow from continuing operations of $18.2 million

    -- EPS from continuing operations of ($0.08); or $0.18, excluding loss on
       debt refinancing, pre-opening expenses and share-based compensation
       expense

First Quarter 2009 Results

MedCath's reported net revenue increased 4.4% to $153.1 million in the first quarter of fiscal 2009 from $146.7 million in the first quarter of fiscal 2008. Income from operations decreased to $7.9 million from $9.5 million in the first quarter of fiscal 2008 and Adjusted EBITDA decreased to $17.2 million from $21.0 million in the same period of the prior year. MedCath's income (loss) from continuing operations was ($1.6) million, or ($0.08) per diluted share, in the first quarter of fiscal 2009 compared to $2.3 million, or $0.11 per diluted share, in the first quarter of fiscal 2008.

MedCath's operating results for the first quarter of fiscal 2009 include a $7.0 million, or $0.23 per diluted share, decrease in income from continuing operations related to loss on early extinguishment of debt incurred from the company's entering into a new credit facility in November 2008 and the repurchase of all of the company's outstanding 9-7/8% Senior Notes in December 2008. MedCath anticipates that the repurchase of the Senior Notes will be $0.19 accretive to its annual earnings per share.

Adjusted EBITDA in this release does not include share-based compensation or pre-opening expenses, but these items are included as a component of income from continuing operations. Share-based compensation expense totaled $1.0 million in the first quarter of fiscal 2009, or $0.03 per diluted share, compared with a $3.7 million expense, or $0.12 per diluted share, in the first quarter of fiscal 2008. Pre-opening expenses totaled $0.2 million in the first quarter of fiscal 2009, compared with $0.3 million in the first quarter of fiscal 2008.

As shown below, EPS for the quarter, adjusted for loss on debt refinance, share-based compensation expense and pre-opening expenses totaled $0.18 for the quarter:


      EPS from continuing operations             $ (0.08)
      Adjustments (net of tax effect)
        Pre-opening expenses                     $  0.01
        Share-based compensation expense         $  0.03
        Loss on Debt Refinancing                 $  0.22
      EPS, adjusted for above items              $  0.18

During the first quarter of fiscal 2009, MedCath divested the 51.0% ownership interest in a joint venture held in its MedCath Partners Division. MedCath received approximately $6.9 million in cash consideration for its ownership interest in the joint venture and recognized a $4.0 million gain in income from discontinued operations, net of taxes. The joint venture had net revenue of $2.6 million, Adjusted EBITDA of $0.7 million, net income of $0.2 million and earnings per share of $0.01 for the fiscal quarter ended December 31, 2008. The operating results for this joint venture are included in MedCath's discontinued operations for the first quarter of fiscal 2009.

"We are pleased with our first quarter results and progress we're making toward our strategic transformation and plans to diversify our services," said Ed French, MedCath's President and Chief Executive Officer. "We experienced solid sequential earnings growth and margin expansion; and our cash flow from operations was extremely strong. Our expansion plans continue to move forward as planned, and we look to add 149 beds during the next 10 months."

Operating Statistics, Cash Flow and Capital Expenditures

Same facility hospital admissions in the first quarter of fiscal 2009 were 6,757, down 5.5% compared with the first quarter of fiscal 2008. Adjusted admissions totaled 9,874, up 0.5% compared with the first quarter of fiscal 2008. Same facility hospital outpatient visits totaled 7,499 in the first quarter of fiscal 2009, up 16.3% in comparison with the first quarter of fiscal 2008.

MedCath's commercial admissions of 23.6% were unchanged from the year earlier period and the fourth quarter of fiscal 2008. Self-pay admissions equaled 2.2% of total admissions in the first quarter of fiscal 2009, in comparison to 2.4% of total admissions in the first quarter of fiscal 2008. Total uncompensated care, which includes charity care plus bad debt expense, equaled 8.5% of hospital division net revenue before the deduction for charity care in the first quarter of fiscal 2009 compared to 9.2% in the first quarter of fiscal 2008 and 10.4% in the fourth quarter of fiscal 2008.

Net cash provided by operating activities of continuing operations for the first quarter of fiscal 2009 was $18.2 million, which reflects the payment of approximately $2.5 million in interest expense from an earlier quarter in connection with the repurchase of the Senior Notes. Net cash provided by operating activities of continuing operations for the first quarter of fiscal 2008 was breakeven. Cash capital expenditures totaled $30.0 million and included $6.3 million related to maintenance expenditures and $23.7 million related to MedCath's construction projects not opened.

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 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.

Management will discuss and answer questions regarding MedCath's quarterly results Thursday, February 5, 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 82073996. A live web cast will also be available on the company's web site, 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, March 5, 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 82073996. This press release and the financial information included therewith will be accessible on the web, by going to 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 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.

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 requires 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. Copies of this form including exhibits are available on the internet site of the Securities and Exchange Commission at http://www.sec.gov.



                               MEDCATH CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In thousands, except per share data)
                                   (Unaudited)


                                              Three Months Ended December 31,
                                                   2008              2007

       Net revenue                                $153,103          $146,695
       Operating expenses:
         Personnel expense                          50,656            50,384
         Medical supplies expense                   42,651            38,742
         Bad debt expense                           11,393            11,285
         Other operating expenses                   32,235            29,016
         Pre-opening expenses                          207               248
         Depreciation                                7,835             7,341
         Amortization                                  149               127
         Loss on disposal of property,
          equipment and other assets                    73                28
            Total operating expenses               145,199           137,171
       Income from operations                        7,904             9,524
       Other income (expenses):
         Interest expense                           (2,857)           (3,931)
         Loss on early extinguishment of debt       (6,961)              -
         Interest and other income, net                100             1,158
         Equity in net earnings of
          unconsolidated affiliates                  2,065             2,025
            Total other expenses, net               (7,653)             (748)
       Income from continuing operations
        before minority interest and income
        taxes                                          251             8,776
       Minority interest share of
        earnings of consolidated
        subsidiaries                                (2,776)           (4,137)
       Income from continuing operations
        before income taxes                         (2,525)            4,639
       Income tax (benefit)/expense                   (909)            2,348
       (Loss)/income from continuing
        operations                                  (1,616)            2,291
       Income from discontinued
        operations, net of taxes                     3,862               773
       Net income                                   $2,246            $3,064

       Earnings (loss) per share, basic
          Continuing operations                     $(0.08)            $0.11
          Discontinued operations                     0.19              0.03
          Earnings (loss) per share,
           basic                                     $0.11             $0.14

       Earnings (loss) per share, diluted
          Continuing operations                     $(0.08)            $0.11
          Discontinued operations                     0.19              0.03
          Earnings (loss) per share,
           diluted                                   $0.11             $0.14

       Weighted average number of shares,
        basic                                       19,599            21,028
       Dilutive effect of stock options
        and restricted stock                           -                 263
       Weighted average number of shares,
        diluted                                     19,599            21,291



                                   MEDCATH CORPORATION
                              CONSOLIDATED BALANCE SHEETS
                           (In thousands, except share data)


                                               December 31,     September 30,
                                                   2008              2008
                                               (Unaudited)

           Current assets:
             Cash and cash equivalents             $56,912           $93,836
             Restricted cash                         3,163             3,154
             Accounts receivable, net               86,572            83,875
             Income tax receivable, net              1,696             3,091
             Medical supplies                       17,838            15,479
             Deferred income tax assets              9,978             9,769
             Prepaid expenses and other
              current assets                        10,439             9,796
             Current assets of
              discontinued operations               12,770            20,776
               Total current assets                199,368           239,776
           Property and equipment, net             341,942           323,729
           Investments in affiliates                10,742            15,285
           Goodwill                                 60,174            60,174
           Other intangible assets, net              5,914             6,063
           Other assets                              9,748             8,378
           Long-term assets of
            discontinued operations                    -                  51
               Total assets                       $627,888          $653,456

           Current liabilities:
             Accounts payable                      $42,128           $41,642
             Accrued compensation and
              benefits                              17,283            16,872
             Other accrued liabilities              21,080            24,054
             Current portion of long-term
              debt and obligations
              under capital leases                  15,341            31,920
             Current liabilities of
              discontinued operations                9,510            10,184
               Total current liabilities           105,342           124,672
           Long-term debt                          115,578           115,628
           Obligations under capital
            leases                                   1,956             2,087
           Deferred income tax
            liabilities                             12,276            12,352
           Other long-term obligations               4,425             4,454
               Total liabilities                   239,577           259,193

           Minority interest in equity of
            consolidated subsidiaries               15,880            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; 21,588,880
              issued and 19,634,519
              outstanding at December
              31, 2008; 21,553,054 issued
              and 19,598693 outstanding at
              September 30, 2008                       216               216
             Paid-in capital                       456,531           455,494
             Accumulated deficit                   (38,892)          (41,138)
             Accumulated other
              comprehensive loss                      (627)             (179)
             Treasury stock, at cost;
              1,954,361 shares at December
              31, 2008 1,954,361 shares at
              September 30, 2008                   (44,797)          (44,797)
               Total stockholders' equity          372,431           369,596
               Total liabilities and
                stockholders' equity              $627,888          $653,456



                               MEDCATH CORPORATION
                             SELECTED OPERATING DATA
        (In thousands, except per share data and selected operating data)
                                   (Unaudited)

                                             Three Months Ended December 31,
                                             2008        2007      % Change

    Statement of Operations Data:
    Net revenue                             $153,103    $146,695       4.4 %
    Adjusted EBITDA (1)                      $17,166     $20,977     (18.2)%
    Income from operations                    $7,904      $9,524     (17.0)%
    (Loss)/income from continuing
     operations                              $(1,616)     $2,291    (170.5)%
    Earnings (loss) per share from
     continuing operations, basic             $(0.08)      $0.11    (172.7)%
    Earnings (loss) per share from
     continuing operations, diluted           $(0.08)      $0.11    (172.7)%

    (1) See Supplemental Financial Disclosure--Reconciliation of GAAP
        Financial Measures to Non-GAAP Financial Measures.




                                              Three Months Ended December 31,
                                               2008        2007     % Change

    Selected Operating Data ( a ):
    Number of hospitals                            7           7
    Licensed beds ( c )                          509         421
    Staffed and available beds ( d )             463         404
    Admissions ( e )                           6,757       7,150     (5.5)%
    Adjusted admissions ( f )                  9,874       9,829       0.5%
    Patient days ( g )                        25,181      25,460     (1.1)%
    Adjusted patient days ( h )               37,044      35,144       5.4%
    Average length of stay (days) ( i )         3.73        3.56       4.8%
    Occupancy ( j )                            59.1%       68.5%
    Inpatient catheterization procedures
     ( k )                                     3,552       4,049    (12.3)%
    Inpatient surgical procedures ( l )        2,001       1,947       2.8%
    Hospital net revenue                    $144,225    $137,151       5.2%

    Combined Operating Data ( b ):
    Number of hospitals                            9           9
    Licensed beds ( c )                          676         588
    Staffed and available beds ( d )             628         567
    Admissions ( e )                           9,740       9,769     (0.3)%
    Adjusted admissions ( f )                 14,622      14,167       3.2%
    Patient days ( g )                        34,189      33,725       1.4%
    Adjusted patient days ( h )               51,162      48,482       5.5%
    Average length of stay (days) ( i )         3.51        3.45       1.7%
    Occupancy ( j )                            59.2%       64.7%
    Inpatient catheterization procedures
     ( k )                                     4,385       4,776     (8.2)%
    Inpatient surgical procedures ( l )        2,622       2,686     (2.4)%
    Hospital net revenue                    $185,023    $176,706       4.7%


    ( 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 Adjusted EBITDA with MedCath's income from
       continuing operations as derived directly from MedCath's unaudited
    consolidated financial statements for the three months ended December 31,
                                 2008 and 2007.


                                              Three Months Ended December 31,
                                                   2008              2007
                                                        (in thousands)

    (Loss)/income from continuing
     operations                                    $(1,616)           $2,291
    Add:
      Income tax expense                              (909)            2,348
      Minority interest share of earnings
       of consolidated subsidiaries                  2,776             4,137
      Equity in net earnings of
       unconsolidated affiliates                    (2,065)           (2,025)
      Interest and other income, net                  (100)           (1,158)
      Loss on early extinguishment of
       debt                                          6,961               -
      Interest expense                               2,857             3,931
      Loss on disposal of property,
       equipment and other assets                       73                28
      Amortization                                     149               127
      Depreciation                                   7,835             7,341
      Pre-opening expenses                             207               248
      Share-based compensation expense                 998             3,709
    Adjusted EBITDA                                $17,166           $20,977


'/>"/>
SOURCE MedCath Corporation
Copyright©2009 PR Newswire.
All rights reserved


Related medicine news :

1. MedCath Corporation to Hold Conference Call on First Quarter Results
2. MedCath Corporation Announces Completion of Sale of Equity Interest in Joint Venture
3. MedCath Corporation to Hold Conference Call on Fourth Quarter Results
4. MedCath Corporation Reports Third Quarter Earnings
5. MedCath Announces Completion of Sale of Dayton Heart Hospital to Good Samaritan Hospital-Dayton
6. MedCath Names Parker to New Finance Post
7. MedCath Corporation to Present at the Banc of America Securities 2008 Health Care Conference
8. MedCath Corporation Reports Second Quarter Earnings
9. MedCath Corporation to Present at the Deutsche Bank Securities 33rd Annual Health Care Conference
10. MedCath Provides Preliminary Second Quarter Fiscal 2008 Earnings and Updates Fiscal 2008 Outlook
11. Woodrin Woody Grossman Appointed to MedCaths Board of Directors
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:12/2/2016)... ... ... years, Doctors on Liens has published a directory of the top doctors working ... When the company started in 1997, the directory was a single page focusing on chiropractors ... directory features a vast array of medical specialists stretching from Sacramento to San ...
(Date:12/2/2016)... ... December 02, 2016 , ... Center for Autism and ... of those affected by autism spectrum disorder (ASD) and other developmental disabilities. The group, ... will give parents and other caregivers the opportunity to share stories and advice, seek ...
(Date:12/2/2016)... ... December 02, 2016 , ... Mediaplanet’s newest campaign, ... standing as living proof that attitude and determination can combine into the most ... spike around the holidays. This campaign will offer patients a new-found hope, by ...
(Date:12/2/2016)... ... December 02, 2016 , ... ... version of its SaaS LIMS, CloudLIMS Lite. CloudLIMS Lite helps biobanks, clinical, research ... labeling, storing, shipping and disposal. The new version is a faster and a ...
(Date:12/2/2016)... Wexford, PA (PRWEB) , ... December 02, 2016 , ... ... manages stress and overall health, day and night. No other wearable health technology on ... management. We wanted to give poeple more meaningful insights about their health than ...
Breaking Medicine News(10 mins):
(Date:12/2/2016)... , Dec. 2, 2016  LifeVac, the revolutionary ... included in the Emergency Response Training and Support Services ... excited to have LifeVac become part of the ERTSS ... Founder and CEO of LifeVac. "Having an established network ... and effectively will help leverage our efforts to spread ...
(Date:12/2/2016)... -- PipelineRx, a leading medication management technology company focused ... its SaaS-based telepharmacy platform, PowerGridRx™ , at ... Clinical Meeting and Exhibition, December 5-7 in ... hospital clients nationally, the Company is a leader ... improve pharmacy operations, enhance patient safety, and reduce ...
(Date:12/2/2016)... 2, 2016  Maxor National Pharmacy Services, LLC ("Maxor"), today ... Inc. ("PSI").  The combination of Texas -based ... -based PSI bring together both company,s clinical expertise and high-touch ... an industry-leading specialty pharmacy. About Maxor ... , , ...
Breaking Medicine Technology: