Exhibit 99.2
MEDCATH CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Net revenue | $ | 150,904 | $ | 154,273 | $ | 462,874 | $ | 455,168 | ||||||||
Operating expenses: | ||||||||||||||||
Personnel expense | 50,862 | 50,520 | 153,644 | 150,060 | ||||||||||||
Medical supplies expense | 44,995 | 42,757 | 131,457 | 123,155 | ||||||||||||
Bad debt expense | 12,547 | 10,235 | 34,558 | 31,852 | ||||||||||||
Other operating expenses | 31,441 | 29,555 | 96,022 | 88,996 | ||||||||||||
Pre-opening expenses | 754 | 149 | 1,340 | 643 | ||||||||||||
Depreciation | 7,858 | 7,505 | 23,258 | 22,535 | ||||||||||||
Amortization | 230 | 149 | 589 | 411 | ||||||||||||
(Gain) loss on disposal of property, equipment and other assets | (26 | ) | 225 | 138 | 391 | |||||||||||
Total operating expenses | 148,661 | 141,095 | 441,006 | 418,043 | ||||||||||||
Income from operations | 2,243 | 13,178 | 21,868 | 37,125 | ||||||||||||
Other income (expenses): | ||||||||||||||||
Interest expense | (1,151 | ) | (3,862 | ) | (5,339 | ) | (11,658 | ) | ||||||||
Loss on early extinguishment of debt | — | — | (6,702 | ) | — | |||||||||||
Interest and other income | 52 | 284 | 218 | 1,930 | ||||||||||||
Equity in net earnings of unconsolidated affiliates | 2,265 | 2,636 | 7,044 | 6,842 | ||||||||||||
Total other income (expense) | 1,166 | (942 | ) | (4,779 | ) | (2,886 | ) | |||||||||
Income from continuing operations before minority interest and income taxes | 3,409 | 12,236 | 17,089 | 34,239 | ||||||||||||
Minority interest share of earnings of consolidated subsidiaries | (2,287 | ) | (3,865 | ) | (9,703 | ) | (12,644 | ) | ||||||||
Income from continuing operations before income taxes | 1,122 | 8,371 | 7,386 | 21,595 | ||||||||||||
Income tax expense | 536 | 3,469 | 2,998 | 8,917 | ||||||||||||
Income from continuing operations | 586 | 4,902 | 4,388 | 12,678 | ||||||||||||
(Loss) income from discontinued operations, net of taxes | (90 | ) | 6,870 | 3,936 | 7,843 | |||||||||||
Net income | $ | 496 | $ | 11,772 | $ | 8,324 | $ | 20,521 | ||||||||
Earnings per share, basic | ||||||||||||||||
Continuing operations | $ | 0.03 | $ | 0.25 | $ | 0.22 | $ | 0.62 | ||||||||
Discontinued operations | (0.00 | ) | 0.35 | 0.20 | 0.38 | |||||||||||
Earnings per share, basic | $ | 0.03 | $ | 0.60 | $ | 0.42 | $ | 1.00 | ||||||||
Earnings per share, diluted | ||||||||||||||||
Continuing operations | $ | 0.03 | $ | 0.25 | $ | 0.22 | $ | 0.62 | ||||||||
Discontinued operations | (0.00 | ) | 0.35 | 0.20 | 0.38 | |||||||||||
Earnings per share, diluted | $ | 0.03 | $ | 0.60 | $ | 0.42 | $ | 1.00 | ||||||||
Weighted average number of shares, basic | 19,733 | 19,524 | 19,665 | 20,415 | ||||||||||||
Dilutive effect of stock options and restricted stock | — | 107 | 56 | 89 | ||||||||||||
Weighted average number of shares, diluted | 19,733 | 19,631 | 19,721 | 20,504 | ||||||||||||
MEDCATH CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
June 30, | September 30, | |||||||
2009 | 2008 | |||||||
(Unaudited) | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 42,857 | $ | 93,836 | ||||
Restricted cash | 3,166 | 3,154 | ||||||
Accounts receivable, net | 76,205 | 83,875 | ||||||
Income tax receivable, net | 3,940 | 3,091 | ||||||
Medical supplies | 18,335 | 15,479 | ||||||
Deferred income tax assets | 7,600 | 9,769 | ||||||
Prepaid expenses and other current assets | 12,235 | 9,796 | ||||||
Current assets of discontinued operations | 10,052 | 20,776 | ||||||
Total current assets | 174,390 | 239,776 | ||||||
Property and equipment, net | 370,418 | 323,729 | ||||||
Investments in affiliates | 13,261 | 15,285 | ||||||
Goodwill | 60,174 | 60,174 | ||||||
Other intangible assets, net | 5,974 | 6,063 | ||||||
Other assets | 13,167 | 8,378 | ||||||
Long-term assets of discontinued operations | — | 51 | ||||||
Total assets | $ | 637,384 | $ | 653,456 | ||||
Current liabilities: | ||||||||
Accounts payable | $ | 40,613 | $ | 41,642 | ||||
Accrued compensation and benefits | 17,980 | 16,872 | ||||||
Other accrued liabilities | 25,793 | 24,054 | ||||||
Current portion of long-term debt and obligations under capital leases | 19,133 | 31,920 | ||||||
Current liabilities of discontinued operations | 9,560 | 10,184 | ||||||
Total current liabilities | 113,079 | 124,672 | ||||||
Long-term debt | 104,683 | 115,628 | ||||||
Obligations under capital leases | 4,111 | 2,087 | ||||||
Deferred income tax liabilities | 12,267 | 12,352 | ||||||
Other long-term obligations | 6,882 | 4,454 | ||||||
Total liabilities | 241,022 | 259,193 | ||||||
Minority interest in equity of consolidated subsidiaries | 18,737 | 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; 21,691,780 issued and 19,737,419 outstanding at June 30, 2009; 21,553,054 issued and 19,598,693 outstanding at September 30, 2008 | 216 | 216 | ||||||
Paid-in capital | 455,346 | 455,494 | ||||||
Accumulated deficit | (32,814 | ) | (41,138 | ) | ||||
Accumulated other comprehensive loss | (326 | ) | (179 | ) | ||||
Treasury stock, at cost; 1,954,361 shares at June 30, 2009 1,954,361 shares at September 30, 2008 | (44,797 | ) | (44,797 | ) | ||||
Total stockholders’ equity | 377,625 | 369,596 | ||||||
Total liabilities and stockholders’ equity | $ | 637,384 | $ | 653,456 | ||||
MEDCATH CORPORATION
SELECTED OPERATING DATA
(In thousands, except per share data and selected operating data)
(Unaudited)
SELECTED OPERATING DATA
(In thousands, except per share data and selected operating data)
(Unaudited)
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||||||||||
2009 | 2008 | % Change | 2009 | 2008 | % Change | |||||||||||||||||||
Statement of Operations Data: | ||||||||||||||||||||||||
Net revenue | $ | 150,904 | $ | 154,273 | (2.2 | )% | $ | 462,874 | $ | 455,168 | 1.7 | % | ||||||||||||
Adjusted EBITDA (1) | $ | 11,290 | $ | 22,747 | (50.4 | )% | $ | 49,261 | $ | 66,568 | (26.0 | )% | ||||||||||||
Income from operations | $ | 2,243 | $ | 13,178 | (83.0 | )% | $ | 21,868 | $ | 37,125 | (41.1 | )% | ||||||||||||
Income from continuing operations | $ | 586 | $ | 4,902 | (88.0 | )% | $ | 4,388 | $ | 12,678 | (65.4 | )% | ||||||||||||
Earnings per share from continuing operations, basic | $ | 0.03 | $ | 0.25 | (88.0 | )% | $ | 0.22 | $ | 0.62 | (64.5 | )% | ||||||||||||
Earnings per share from continuing operations, diluted | $ | 0.03 | $ | 0.25 | (88.0 | )% | $ | 0.22 | $ | 0.62 | (64.5 | )% |
(1) | See Supplemental Financial Disclosure—Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures. |
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||||||||||
2009 | 2008 | % Change | 2009 | 2008 | % Change | |||||||||||||||||||
Selected Operating Data (a): | ||||||||||||||||||||||||
Number of hospitals | 7 | 7 | 7 | 7 | ||||||||||||||||||||
Licensed beds ( c ) | 588 | 449 | 588 | 449 | ||||||||||||||||||||
Staffed and available beds ( d ) | 542 | 449 | 542 | 449 | ||||||||||||||||||||
Admissions ( e ) | 6,352 | 7,384 | (14.0 | )% | 20,152 | 22,380 | (10.0 | )% | ||||||||||||||||
Adjusted admissions ( f ) | 10,284 | 10,341 | (0.6 | )% | 30,714 | 30,979 | (0.9 | )% | ||||||||||||||||
Patient days ( g ) | 25,482 | 27,132 | (6.1 | )% | 78,681 | 81,853 | (3.9 | )% | ||||||||||||||||
Adjusted patient days ( h ) | 41,174 | 38,105 | 8.1 | % | 120,106 | 113,790 | 5.6 | % | ||||||||||||||||
Average length of stay (days) ( i ) | 4.01 | 3.67 | 9.3 | % | 3.90 | 3.66 | 6.6 | % | ||||||||||||||||
Occupancy ( j ) | 51.7 | % | 66.4 | % | 53.2 | % | 66.5 | % | ||||||||||||||||
Inpatient catheterization procedures ( k ) | 3,071 | 3,961 | (22.5 | )% | 10,069 | 12,244 | (17.8 | )% | ||||||||||||||||
Inpatient surgical procedures ( l ) | 2,045 | 2,260 | (9.5 | )% | 6,133 | 6,332 | (3.1 | )% | ||||||||||||||||
Hospital net revenue | $ | 141,665 | $ | 144,676 | (2.1 | )% | $ | 436,457 | $ | 426,300 | 2.4 | % | ||||||||||||
Combined Operating Data (b): | ||||||||||||||||||||||||
Number of hospitals | 9 | 9 | 9 | 9 | ||||||||||||||||||||
Licensed beds ( c ) | 755 | 676 | 755 | 676 | ||||||||||||||||||||
Staffed and available beds ( d ) | 705 | 612 | 705 | 612 | ||||||||||||||||||||
Admissions ( e ) | 9,187 | 9,879 | (7.0 | )% | 28,917 | 30,179 | (4.2 | )% | ||||||||||||||||
Adjusted admissions ( f ) | 14,979 | 14,512 | 3.2 | % | 44,849 | 43,838 | 2.3 | % | ||||||||||||||||
Patient days ( g ) | 33,885 | 34,819 | (2.7 | )% | 105,350 | 106,614 | (1.2 | )% | ||||||||||||||||
Adjusted patient days ( h ) | 54,810 | 50,722 | 8.1 | % | 162,387 | 153,697 | 5.7 | % | ||||||||||||||||
Average length of stay (days) ( i ) | 3.69 | 3.52 | 4.8 | % | 3.64 | 3.53 | 3.1 | % | ||||||||||||||||
Occupancy ( j ) | 52.8 | % | 62.5 | % | 54.7 | % | 63.6 | % | ||||||||||||||||
Inpatient catheterization procedures ( k ) | 3,786 | 4,814 | (21.4 | )% | 12,427 | 14,624 | (15.0 | )% | ||||||||||||||||
Inpatient surgical procedures ( l ) | 2,618 | 2,842 | (7.9 | )% | 7,951 | 8,287 | (4.1 | )% | ||||||||||||||||
Hospital net revenue | $ | 182,058 | $ | 183,446 | (0.8 | )% | $ | 558,548 | $ | 545,892 | 2.3 | % |
(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)
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 consolidated financial statements for the three and nine months ended June 30, 2009 and 2008.
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Income from continuing operations | $ | 586 | $ | 4,902 | $ | 4,388 | $ | 12,678 | ||||||||
Add: | ||||||||||||||||
Income tax expense | 536 | 3,469 | 2,998 | 8,917 | ||||||||||||
Minority interest share of earnings of consolidated subsidiaries | 2,287 | 3,865 | 9,703 | 12,644 | ||||||||||||
Equity in net earnings of unconsolidated affiliates | (2,265 | ) | (2,636 | ) | (7,044 | ) | (6,842 | ) | ||||||||
Interest and other income | (52 | ) | (284 | ) | (218 | ) | (1,930 | ) | ||||||||
Loss on early extinguishment of debt | — | — | 6,702 | — | ||||||||||||
Interest expense | 1,151 | 3,862 | 5,339 | 11,658 | ||||||||||||
(Gain) loss on disposal of property, equipment and other assets | (26 | ) | 225 | 138 | 391 | |||||||||||
Amortization | 230 | 149 | 589 | 411 | ||||||||||||
Depreciation | 7,858 | 7,505 | 23,258 | 22,535 | ||||||||||||
Pre-opening expenses | 754 | 149 | 1,340 | 643 | ||||||||||||
Share-based compensation expense | 231 | 1,541 | 2,068 | 5,463 | ||||||||||||
Adjusted EBITDA | $ | 11,290 | $ | 22,747 | $ | 49,261 | $ | 66,568 | ||||||||
The following table reconciles Adjusted EPS with MedCath’s diluted earnings per share from continuing operations as derived directly from MedCath’s consolidated financial statements for the three months ended June 30, 2009.
Diluted earnings per share | $ | 0.03 | |||
Add: | |||||
DSH adjustments | 0.08 | ||||
Medicaid reimbursement charges | 0.01 | ||||
Professional fees for internal control assessment | 0.03 | ||||
Settlement of Medicare claims | 0.03 | ||||
Severance expense | 0.01 | ||||
Share-based compensation expense | 0.01 | ||||
Pre-opening expense | 0.02 | ||||
Adjusted diluted earnings per share | $ | 0.22 | |||