Medcath (MDTH) 8-K Medcath Corporation Reports Fourth Quarter Earnings

Exhibit 99.2

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

	Three Months Ended September 30,						Twelve Months Ended September 30,
	2004			2003			2004			2003
Net revenue	$	182,094		$	144,355		$	692,791		$	542,986
Operating expenses:
Personnel expense		57,631			45,473			218,140			172,318
Medical supplies expense		51,381			38,395			192,814			136,681
Bad debt expense		13,440			10,206			46,717			26,791
Other operating expenses		37,462			34,426			147,952			130,173
Pre-opening expenses		—			3,046			5,531			10,095
Depreciation		10,570			9,983			43,768			40,104
Amortization		290			285			1,160			1,441
Loss on disposal of property, equipment and other assets		114			164			93			258
Impairments of goodwill and long-lived assets		7,227			58,865			7,227			58,865
Total operating expenses		178,115			200,843			663,402			576,726
Income (loss) from operations		3,979			(56,488	)		29,389			(33,740	)
Other income (expenses):
Interest expense		(7,866	)		(6,953	)		(28,953	)		(25,857	)
Interest income		229			270			835			1,373
Loss on debt refinancing		(5,488	)		—			(5,488	)		—
Other income, net		26			10			43			206
Equity in net earnings of unconsolidated affiliates		916			648			3,540			3,541
Total other expenses, net		(12,183	)		(6,025	)		(30,023	)		(20,737	)
Loss before minority interest and income taxes		(8,204	)		(62,513	)		(634	)		(54,477	)
Minority interest share of earnings of consolidated subsidiaries		(3,381	)		(534	)		(6,202	)		(5,524	)
Loss before income taxes		(11,585	)		(63,047	)		(6,836	)		(60,001	)
Income tax benefit (expense)		4,874			986			3,213			(305	)
Net loss	$	(6,711	)	$	(62,061	)	$	(3,623	)	$	(60,306	)
Loss per share, basic and diluted	$	(0.37	)	$	(3.46	)	$	(0.20	)	$	(3.35	)
Weighted average number of shares, basic and diluted		18,014			17,943			17,984			17,989

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

	Three Months Ended September 30,									Twelve Months Ended September 30,
	2004			2003			% Change			2004			2003			% Change
Statement of Operations Data:
Net revenue	$	182,094		$	144,355			26.1	%	$	692,791		$	542,986			27.6	%
Adjusted EBITDA(a)	$	22,180		$	12,809			73.2	%	$	81,637		$	66,928			22.0	%
Adjusted EBITDA, before pre-opening expenses (a)	$	22,180		$	15,855			39.9	%	$	87,168		$	77,023			13.2	%
Income (loss) from operations	$	3,979		$	(56,488	)		(107.0	)%	$	29,389		$	(33,740	)		(187.1	)%
Net loss	$	(6,711	)	$	(62,061	)		(89.2	)%	$	(3,623	)	$	(60,306	)		(94.0	)%
Loss per share, basic and diluted	$	(0.37	)	$	(3.46	)		(89.3	)%	$	(0.20	)	$	(3.35	)		(94.0	)%

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

	Three Months Ended September 30,									Twelve Months Ended September 30,
	2004			2003			% Change			2004			2003			% Change
Selected Operating Data (consolidated):
Number of hospitals		12			9						12			9
Licensed beds (a)		704			580						704			580
Staffed and available beds (b)		604			493						604			493
Admissions (c)		11,051			9,186			20.3	%		42,382			32,998			28.4	%
Adjusted admissions (d)		14,319			11,621			23.2	%		53,947			41,213			30.9	%
Patient days (e)		36,963			31,478			17.4	%		146,177			117,615			24.3	%
Adjusted patient days (f)		47,562			39,700			19.8	%		185,469			146,717			26.4	%
Average length of stay (days) (g)		3.34			3.43			(2.6	)%		3.45			3.56			(3.1	)%
Occupancy (h)		66.5	%		69.4	%					66.1	%		65.4	%
Inpatient Catheterization Procedures		5,894			4,724			24.8	%		22,010			17,537			25.5	%
Inpatient Surgical Procedures		2,871			2,267			26.6	%		10,726			8,750			22.6	%
Hospital Division revenue	$	167,742		$	129,434			29.6	%	$	635,992		$	476,971			33.3	%

	Three Months Ended September 30,									Twelve Months Ended September 30,
	2004			2003			% Change			2004			2003			% Change
Selected Operating Data (same facility):
Number of hospitals		9			9						8			8
Licensed beds (a)		580			580						522			522
Staffed and available beds (b)		531			493						489			475
Admissions (c)		9,897			9,186			7.7	%		37,705			32,328			16.6	%
Adjusted admissions (d)		12,977			11,621			11.7	%		48,048			40,244			19.4	%
Patient days (e)		33,285			31,478			5.7	%		131,413			115,736			13.5	%
Adjusted patient days (f)		43,296			39,700			9.1	%		166,892			144,000			15.9	%
Average length of stay (days) (g)		3.36			3.43			(2.0	)%		3.49			3.58			(2.5	)%
Occupancy (h)		68.1	%		69.4	%					73.4	%		66.8	%
Inpatient Catheterization Procedures		5,040			4,724			6.7	%		18,885			17,116			10.3	%
Inpatient Surgical Procedures		2,612			2,267			15.2	%		9,396			8,512			10.4	%
Hospital Division revenue	$	146,181		$	129,434			12.9	%	$	538,513		$	460,383			17.0	%

(a)	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.
(b)	Staffed and available beds represent the weighted average number of beds that are readily available for patient use during the period.
(c)	Admissions represent the number of patients admitted for inpatient treatment.
(d)	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.
(e)	Patient days represent the total number of days of care provided to inpatients.
(f)	Adjusted patient days is a general measure of combined inpatient and outpatient days. We computed adjusted patient days by dividing gross patient revenue by gross inpatient revenue and then multiplying the quotient by patient days.
(g)	Average length of stay (days) represents the average number of days inpatients stay in our hospital.
(h)	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.

MEDCATH CORPORATION
SUPPLEMENTAL FINANCIAL DISCLOSURE — RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES
(Unaudited)

     The following table reconciles Adjusted EBITDA and Adjusted EBITDA, before pre-opening expenses with MedCath’s Net income (loss) as derived directly from MedCath’s consolidated financial statements for the three months and twelve months ended September 30, 2004 and 2003.

	Three Months Ended September 30,						Twelve Months Ended September 30,
	2004			2003			2004			2003
	(in thousands)
Net loss	$	(6,711	)	$	(62,061	)	$	(3,623	)	$	(60,306	)
Add:
Income tax (benefit) expense		(4,874	)		(986	)		(3,213	)		305
Minority interest share of earnings of consolidated subsidiaries		3,381			534			6,202			5,524
Equity in net earnings of unconsolidated affiliates		(916	)		(648	)		(3,540	)		(3,541	)
Other income, net		(26	)		(10	)		(43	)		(206	)
Interest income		(229	)		(270	)		(835	)		(1,373	)
Interest expense		7,866			6,953			28,953			25,857
Loss on debt refinancing		5,488			—			5,488			—
Impairments of goodwill and long-lived assets		7,227			58,865			7,227			58,865
Loss on disposal of property, equipment and other assets		114			164			93			258
Amortization		290			285			1,160			1,441
Depreciation		10,570			9,983			43,768			40,104
Adjusted EBITDA	$	22,180		$	12,809		$	81,637		$	66,928
Add:
Pre-opening expenses		—			3,046			5,531			10,095
Adjusted EBITDA, before pre-opening expenses	$	22,180		$	15,855		$	87,168		$	77,023

     The following table reconciles estimated Adjusted EBITDA and Adjusted EBITDA, before pre-opening expenses with MedCath’s estimated Income from continuing operations for the guidance for the fiscal year ending September 30, 2005.

	Fiscal 2005 Guidance Range
	(in millions)
Income from continuing operations	$	10.5	$	12.0
Add:
Income tax expense		7.0		8.0
Minority interest share of earnings of consolidated subsidiaries		11.2		12.1
Total other expenses, net		33.1		34.2
Amortization		1.2		1.2
Depreciation		42.0		42.5
Adjusted EBITDA	$	105.0	$	110.0
Add:
Pre-opening expenses		—		—
Adjusted EBITDA, before pre-opening expenses	$	105.0	$	110.0