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 | Twelve Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net revenue | $ | 110,527 | $ | 103,600 | $ | 442,496 | $ | 419,733 | ||||||||
Operating expenses: | ||||||||||||||||
Personnel expense | 37,355 | 33,926 | 151,990 | 141,315 | ||||||||||||
Medical supplies expense | 27,328 | 27,299 | 113,588 | 111,253 | ||||||||||||
Bad debt expense | 13,456 | 12,692 | 46,887 | 39,068 | ||||||||||||
Other operating expenses | 26,372 | 23,317 | 104,327 | 90,603 | ||||||||||||
Pre-opening expenses | — | 2,223 | 866 | 3,563 | ||||||||||||
Depreciation | 6,277 | 6,305 | 26,895 | 22,818 | ||||||||||||
Amortization | 8 | 867 | 32 | 891 | ||||||||||||
Impairment of goodwill | — | 51,500 | — | 51,500 | ||||||||||||
Impairment of property and equipment | 30,211 | — | 67,776 | — | ||||||||||||
Loss on disposal of property, equipment and other assets | 21 | 87 | 57 | 192 | ||||||||||||
Total operating expenses | 141,028 | 158,216 | 512,418 | 461,203 | ||||||||||||
Loss from operations | (30,501 | ) | (54,616 | ) | (69,922 | ) | (41,470 | ) | ||||||||
Other income (expenses): | ||||||||||||||||
Interest expense | (1,229 | ) | (688 | ) | (4,548 | ) | (3,746 | ) | ||||||||
Loss on early extinguishment of debt | — | — | — | (6,702 | ) | |||||||||||
Interest and other income, net | (59 | ) | 7 | 84 | 217 | |||||||||||
Loss on note receivable | — | — | (1,507 | ) | — | |||||||||||
Equity in net earnings of unconsolidated affiliates | 2,198 | 2,013 | 9,121 | 9,057 | ||||||||||||
Total other income (expense), net | 910 | 1,332 | 3,150 | (1,174 | ) | |||||||||||
Loss from continuing operations before income taxes | (29,591 | ) | (53,284 | ) | (66,772 | ) | (42,644 | ) | ||||||||
Income tax benefit | (10,317 | ) | (1,263 | ) | (26,316 | ) | (362 | ) | ||||||||
Loss from continuing operations | (19,274 | ) | (52,021 | ) | (40,456 | ) | (42,282 | ) | ||||||||
Income from discontinued operations, net of taxes | 4,810 | 1,061 | 5,028 | 9,527 | ||||||||||||
Net loss | (14,464 | ) | (50,960 | ) | (35,428 | ) | (32,755 | ) | ||||||||
Less: Net income attributable to noncontrolling interest | (6,671 | ) | (7,646 | ) | (12,389 | ) | (17,527 | ) | ||||||||
Net loss attributable to MedCath Corporation | $ | (21,135 | ) | $ | (58,606 | ) | $ | (47,817 | ) | $ | (50,282 | ) | ||||
Amounts attributable to MedCath Corporation common stockholders: | ||||||||||||||||
Loss from continuing operations, net of taxes | $ | (25,169 | ) | (53,214 | ) | $ | (51,402 | ) | $ | (51,655 | ) | |||||
Income (loss) from discontinued operations, net of taxes | 4,034 | (5,392 | ) | 3,585 | 1,373 | |||||||||||
Net loss | $ | (21,135 | ) | $ | (58,606 | ) | $ | (47,817 | ) | $ | (50,282 | ) | ||||
(Loss) earnings per share, basic | ||||||||||||||||
Loss from continuing operations attributable to MedCath Corporation common stockholders | $ | (1.26 | ) | $ | (2.70 | ) | $ | (2.59 | ) | $ | (2.62 | ) | ||||
Income from discontinued operations attributable to MedCath Corporation common stockholders | 0.20 | (0.27 | ) | 0.18 | 0.07 | |||||||||||
Loss per share, basic | $ | (1.06 | ) | $ | (2.97 | ) | $ | (2.41 | ) | $ | (2.55 | ) | ||||
(Loss) earnings per share, diluted | ||||||||||||||||
Loss from continuing operations attributable to MedCath Corporation common stockholders | $ | (1.26 | ) | $ | (2.70 | ) | $ | (2.59 | ) | $ | (2.62 | ) | ||||
Income from discontinued operations attributable to MedCath Corporation common stockholders | 0.20 | (0.27 | ) | 0.18 | 0.07 | |||||||||||
Loss per share, diluted | $ | (1.06 | ) | $ | (2.97 | ) | $ | (2.41 | ) | $ | (2.55 | ) | ||||
Weighted average number of shares, basic | 19,898 | 19,740 | 19,842 | 19,684 | ||||||||||||
Dilutive effect of stock options and restricted stock | — | — | — | — | ||||||||||||
Weighted average number of shares, diluted | 19,898 | 19,740 | 19,842 | 19,684 | ||||||||||||
MEDCATH CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
September 30, | September 30, | |||||||
2010 | 2009 | |||||||
(Unaudited) | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 34,835 | $ | 28,267 | ||||
Accounts receivable, net | 48,540 | 49,314 | ||||||
Income tax receivable | 6,188 | — | ||||||
Medical supplies | 13,481 | 13,001 | ||||||
Deferred income tax assets | 13,327 | 12,161 | ||||||
Prepaid expenses and other current assets | 13,583 | 13,077 | ||||||
Current assets of discontinued operations | 38,356 | 61,045 | ||||||
Total current assets | 168,310 | 176,865 | ||||||
Property and equipment, net | 224,082 | 302,717 | ||||||
Other assets | 15,653 | 24,796 | ||||||
Deferred income tax assets | 8,717 | — | ||||||
Non-current assets of discontinued operations | 78,330 | 86,070 | ||||||
Total assets | $ | 495,092 | $ | 590,448 | ||||
Current liabilities: | ||||||||
Accounts payable | $ | 19,267 | $ | 26,838 | ||||
Income tax payable | — | 297 | ||||||
Accrued compensation and benefits | 18,153 | 14,314 | ||||||
Other accrued liabilities | 18,291 | 21,750 | ||||||
Current portion of long-term debt and obligations | ||||||||
under capital leases | 16,672 | 21,074 | ||||||
Current liabilities of discontinued operations | 28,130 | 32,358 | ||||||
Total current liabilities | 100,513 | 116,631 | ||||||
Long-term debt | 52,500 | 66,563 | ||||||
Obligations under capital leases | 6,500 | 4,255 | ||||||
Deferred income tax liabilities | — | 13,874 | ||||||
Other long-term obligations | 5,053 | 8,533 | ||||||
Long-term liabilities of discontinued operations | 35,968 | 36,062 | ||||||
Total liabilities | 200,534 | 245,918 | ||||||
Commitments and contingencies | ||||||||
Redeemable noncontrolling interest | 11,534 | 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; 22,423,666 issued and 20,469,305 outstanding at September 30, 2010; 22,104,917 issued and 20,150,556 outstanding at September 30, 2009 | 216 | 216 | ||||||
Paid-in capital | 457,725 | 455,259 | ||||||
Accumulated deficit | (139,237 | ) | (91,420 | ) | ||||
Accumulated other comprehensive loss | (444 | ) | (360 | ) | ||||
Treasury stock, at cost; 1,954,361 shares at September 30, 2010 1,954,361 shares at September 30, 2009 | (44,797 | ) | (44,797 | ) | ||||
Total MedCath Corporation stockholders’ equity | 273,463 | 318,898 | ||||||
Noncontrolling interest | 9,561 | 18,184 | ||||||
Total equity | 283,024 | 337,082 | ||||||
Total liabilities and equity | $ | 495,092 | $ | 590,448 | ||||
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 September 30, | Twelve Months Ended September 30, | |||||||||||||||||||||||
2010 | 2009 | % Change | 2010 | 2009 | % Change | |||||||||||||||||||
Statement of Operations Data: | ||||||||||||||||||||||||
Net revenue | $ | 110,527 | $ | 103,600 | 6.7 | % | $ | 442,496 | $ | 419,733 | 5.4 | % | ||||||||||||
Adjusted EBITDA (1) | $ | 9,117 | $ | 8,166 | 11.6 | % | $ | 32,619 | $ | 46,734 | (30.2 | )% | ||||||||||||
Loss from operations | $ | (30,501 | ) | $ | (54,616 | ) | 44.2 | % | $ | (69,922 | ) | $ | (41,470 | ) | (68.6 | )% | ||||||||
Loss from continuing operations, net of taxes | $ | (25,169 | ) | $ | (53,214 | ) | 52.7 | % | $ | (51,402 | ) | $ | (51,655 | ) | 0.5 | % | ||||||||
Loss per share from continuing operations, basic | $ | (1.26 | ) | $ | (2.70 | ) | 53.3 | % | $ | (2.59 | ) | $ | (2.62 | ) | 1.1 | % | ||||||||
Loss per share from continuing operations, diluted | $ | (1.26 | ) | $ | (2.70 | ) | 53.3 | % | $ | (2.59 | ) | $ | (2.62 | ) | 1.1 | % |
(1) | See Supplemental Financial Disclosure-Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures. |
Three Months Ended September 30, | Twelve Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||
2010 | 2010 | |||||||||||||||||||||||||||||||||||||||
% | Same | % | % | Same | % | |||||||||||||||||||||||||||||||||||
2010 | 2009 | Change | Facility | Change | 2010 | 2009 | Change | Facility | Change | |||||||||||||||||||||||||||||||
Selected Operating Data(a): | ||||||||||||||||||||||||||||||||||||||||
Number of hospitals | 6 | 5 | 5 | 6 | 5 | 5 | ||||||||||||||||||||||||||||||||||
Licensed beds(c) | 541 | 471 | 471 | 541 | 471 | 471 | ||||||||||||||||||||||||||||||||||
Staffed and available beds(d) | 455 | 385 | 385 | 455 | 385 | 385 | ||||||||||||||||||||||||||||||||||
Admissions(e) | 5,255 | 4,917 | 6.9 | % | 4,775 | (2.9 | )% | 21,998 | 19,931 | 10.4 | % | 20,330 | 2.0 | % | ||||||||||||||||||||||||||
Adjusted admissions(f) | 8,140 | 7,218 | 12.8 | % | 7,218 | 0.0 | % | 32,567 | 28,692 | 13.5 | % | 29,462 | 2.7 | % | ||||||||||||||||||||||||||
Patient days(g) | 19,156 | 18,032 | 6.2 | % | 17,352 | (3.8 | )% | 82,105 | 75,817 | 8.3 | % | 75,831 | 0.0 | % | ||||||||||||||||||||||||||
Adjusted patient days(h) | 29,788 | 26,481 | 12.5 | % | 26,324 | (0.6 | )% | 121,940 | 109,281 | 11.6 | % | 110,262 | 0.9 | % | ||||||||||||||||||||||||||
Average length of stay (days)(i) | 3.65 | 3.67 | (0.5 | )% | 3.63 | (1.1 | )% | 3.73 | 3.80 | (1.8 | )% | 3.73 | (1.8 | )% | ||||||||||||||||||||||||||
Occupancy(j) | 45.8 | % | 50.9 | % | 49.0 | % | 49.4 | % | 54.0 | % | 54.0 | % | ||||||||||||||||||||||||||||
Inpatient catheterization procedures(k) | 2,431 | 2,387 | 1.8 | % | 2,373 | (0.6 | )% | 10,219 | 10,167 | 0.5 | % | 9,962 | (2.0 | )% | ||||||||||||||||||||||||||
Inpatient surgical procedures(l) | 1,241 | 1,251 | (0.8 | )% | 1,127 | (9.9 | )% | 5,234 | 5,064 | 3.4 | % | 4,895 | (3.3 | )% | ||||||||||||||||||||||||||
Hospital net revenue | $ | 107,375 | $ | 98,533 | 9.0 | % | $ | 99,619 | 1.1 | % | $ | 428,122 | $ | 400,170 | 7.0 | % | $ | 401,050 | 0.2 | % | ||||||||||||||||||||
Combined Operating Data(b): | ||||||||||||||||||||||||||||||||||||||||
Number of hospitals | 8 | 7 | 7 | 8 | 7 | 7 | ||||||||||||||||||||||||||||||||||
Licensed beds(c) | 708 | 638 | 638 | 708 | 638 | 638 | ||||||||||||||||||||||||||||||||||
Staffed and available beds(d) | 619 | 548 | 549 | 619 | 548 | 549 | ||||||||||||||||||||||||||||||||||
Admissions(e) | 7,816 | 7,356 | 6.3 | % | 7,336 | (0.3 | )% | 32,360 | 31,132 | 3.9 | % | 30,692 | (1.4 | )% | ||||||||||||||||||||||||||
Adjusted admissions(f) | 12,350 | 11,285 | 9.4 | % | 11,428 | 1.3 | % | 49,861 | 46,899 | 6.3 | % | 46,756 | (0.3 | )% | ||||||||||||||||||||||||||
Patient days(g) | 27,243 | 25,920 | 5.1 | % | 25,439 | (1.9 | )% | 114,989 | 110,366 | 4.2 | % | 108,715 | (1.5 | )% | ||||||||||||||||||||||||||
Adjusted patient days(h) | 42,974 | 39,399 | 9.1 | % | 39,510 | 0.3 | % | 176,268 | 164,473 | 7.2 | % | 164,590 | 0.1 | % | ||||||||||||||||||||||||||
Average length of stay (days)(i) | 3.49 | 3.52 | (0.9 | )% | 3.47 | (1.4 | )% | 3.55 | 3.55 | 0.0 | % | 3.54 | (0.3 | )% | ||||||||||||||||||||||||||
Occupancy(j) | 47.8 | % | 51.4 | % | 50.4 | % | 50.9 | % | 55.2 | % | 54.3 | % | ||||||||||||||||||||||||||||
Inpatient catheterization procedures(k) | 3,031 | 3,003 | 0.9 | % | 2,973 | (1.0 | )% | 12,925 | 13,137 | (1.6 | )% | 12,668 | (3.6 | )% | ||||||||||||||||||||||||||
Inpatient surgical procedures(l) | 1,864 | 1,826 | 2.1 | % | 1,750 | (4.2 | )% | 7,570 | 7,456 | 1.5 | % | 7,231 | (3.0 | )% | ||||||||||||||||||||||||||
Hospital net revenue | $ | 147,424 | $ | 137,119 | 7.5 | % | $ | 139,668 | 1.9 | % | $ | 593,461 | $ | 560,848 | 5.8 | % | $ | 566,389 | 1.0 | % |
(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 and twelve months ended September 30, 2010 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 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. |
SUPPLEMENTAL FINANCIAL DISCLOSURE — RECONCILIATION OF GAAP FINANCIAL MEASURES
TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
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 and twelve months ended September 30, 2010 and 2009.
Three Months Ended | Twelve Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Loss from continuing operations, net of taxes | $ | (25,169 | ) | $ | (53,214 | ) | $ | (51,402 | ) | $ | (51,655 | ) | ||||
Add: | ||||||||||||||||
Income tax benefit | (10,317 | ) | (1,263 | ) | (26,316 | ) | (362 | ) | ||||||||
Net income attributable to noncontrolling interest | 5,895 | 1,193 | 10,946 | 9,374 | ||||||||||||
Equity in net earnings of unconsolidated affiliates | (2,198 | ) | (2,013 | ) | (9,121 | ) | (9,057 | ) | ||||||||
Interest and other income, net | 59 | (7 | ) | (84 | ) | (217 | ) | |||||||||
Loss on note receivable | — | — | 1,507 | — | ||||||||||||
Loss on early extinguishment of debt | — | — | — | 6,702 | ||||||||||||
Interest expense | 1,229 | 688 | 4,548 | 3,746 | ||||||||||||
Loss on disposal of property, equipment and other assets | 21 | 87 | 57 | 192 | ||||||||||||
Impairment of property and equipment | 30,211 | — | 67,776 | — | ||||||||||||
Impairment of goodwill | — | 51,500 | — | 51,500 | ||||||||||||
Amortization | 8 | 867 | 32 | 891 | ||||||||||||
Depreciation | 6,277 | 6,305 | 26,895 | 22,818 | ||||||||||||
Pre-opening expenses | — | 2,223 | 866 | 3,563 | ||||||||||||
Share-based compensation expense | 772 | 322 | 3,151 | 2,390 | ||||||||||||
Professional fees for strategic plans | 2,590 | — | 4,025 | — | ||||||||||||
DSH and Medicaid adjustments | — | 1,478 | — | 4,543 | ||||||||||||
Professional fees for internal assessment | — | — | — | 1,106 | ||||||||||||
Stent procedure penalty | — | — | — | 840 | ||||||||||||
Other non-recurring items | (261 | ) | — | (261 | ) | — | ||||||||||
Severance expense | — | — | — | 360 | ||||||||||||
Adjusted EBITDA | $ | 9,117 | $ | 8,166 | $ | 32,619 | $ | 46,734 | ||||||||
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 earnings per share from continuing operations for the three and twelve months ended September 30, 2010 and 2009.
Three Months Ended | Twelve Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Diluted loss per share | $ | (1.26 | ) | $ | (2.70 | ) | $ | (2.59 | ) | $ | (2.62 | ) | ||||
Add: | ||||||||||||||||
Impairment of property and equipment | 0.92 | — | 2.15 | — | ||||||||||||
Impairment of goodwill | — | 2.61 | — | 2.61 | ||||||||||||
Loss on note receivable | — | — | 0.05 | — | ||||||||||||
DSH and Medicaid adjustments | — | 0.04 | — | 0.13 | ||||||||||||
Termination of management contract | — | 0.03 | — | 0.03 | ||||||||||||
Professional fees for strategic plans | 0.08 | — | 0.13 | — | ||||||||||||
Professional fees for internal assessments | — | — | — | 0.03 | ||||||||||||
Severance expense | — | — | — | 0.01 | ||||||||||||
Loss on early extinguishment of debt | — | — | — | 0.22 | ||||||||||||
Other non-recurring items | (0.01 | ) | — | 0.03 | — | |||||||||||
Non-cash minority interest | 0.15 | — | 0.15 | — | ||||||||||||
Tax valuation | 0.14 | — | 0.14 | — | ||||||||||||
Share-based compensation expense | 0.02 | 0.01 | 0.10 | 0.08 | ||||||||||||
Pre-opening expense | — | 0.05 | 0.02 | 0.09 | ||||||||||||
Adjusted diluted earnings per share | $ | 0.04 | $ | 0.04 | $ | 0.18 | $ | 0.58 | ||||||||