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

Exhibit 99.2

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

	Three Months Ended December 31,
	2005			2004
Net revenue	$	185,121		$	184,760
Operating expenses:
Personnel expense		60,475			57,213
Medical supplies expense		51,959			52,486
Bad debt expense		14,438			11,484
Other operating expenses		41,053			38,400
Depreciation		9,641			9,736
Amortization		252			290
Loss on disposal of property, equipment and other assets		119			3
Total operating expenses		177,937			169,612
Income from operations		7,184			15,148
Other income (expenses):
Interest expense		(9,068	)		(7,998	)
Interest and other income, net		1,417			395
Equity in net earnings of unconsolidated affiliates		1,065			769
Total other expenses, net		(6,586	)		(6,834	)
Income from continuing operations before minority interest, income taxes and discontinued operations		598			8,314
Minority interest share of earnings of consolidated subsidiaries		(2,818	)		(3,999	)
Income (loss) from continuing operations before income taxes and discontinued operations		(2,220	)		4,315
Income tax expense (benefit)		(887	)		1,723
Income (loss) from continuing operations		(1,333	)		2,592
Income from discontinued operations, net of taxes		—			1,948
Net income (loss)	$	(1,333	)	$	4,540
Earnings (loss) per share, basic
Continuing operations	$	(0.07	)	$	0.14
Discontinued operations		—			0.11
Earnings (loss) per share, basic	$	(0.07	)	$	0.25
Earnings (loss) per share, diluted				$
Continuing operations	$	(0.07	)		0.14
Discontinued operations		—			0.10
Earnings (loss) per share, diluted	$	(0.07	)	$	0.24
Weighted average number of shares, basic		18,501			18,045
Dilutive effect of stock options		—			932
Weighted average number of shares, diluted		18,501			18,977

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

	Three Months Ended December 31,
	2005			2004		% Change
Statement of Operations Data:
Net revenue	$	185,121		$	184,760		0.2	%
Adjusted EBITDA (1)	$	17,613		$	25,177		(30.0	)%
Income from operations	$	7,184		$	15,148		(52.6	)%
Income (loss) from continuing operations	$	(1,333	)	$	2,592		(151.4	)%
Earnings (loss) per share from continuing operations, basic	$	(0.07	)	$	0.14		(150.0	)%
Earnings (loss) per share from continuing operations, diluted	$	(0.07	)	$	0.14		(150.0	)%

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

	Three Months Ended December 31,
	2005			2004			% Change
Selected Operating Data (a):
Number of hospitals		11			11
Licensed beds ( b )		672			672
Staffed and available beds ( c )		667			631
Admissions ( d )		11,285			10,883			3.7	%
Adjusted admissions ( e )		14,785			14,282			3.5	%
Patient days ( f )		37,978			37,158			2.2	%
Adjusted patient days ( g )		49,590			48,393			2.5	%
Average length of stay (days) ( h )		3.37			3.41			(1.2	)%
Occupancy ( i )		61.9	%		64.0	%
Inpatient catheterization procedures		5,692			5,808			(2.0	)%
Inpatient surgical procedures		3,023			2,775			8.9	%
Hospital division revenue	$	171,604		$	171,229			0.2	%

(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)	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.
(c)	Staffed and available beds represent the number of beds that are readily available for patient use at the end of the period.
(d)	Admissions represent the number of patients admitted for inpatient treatment.
(e)	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.
(f)	Patient days represent the total number of days of care provided to inpatients.
(g)	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.
(h)	Average length of stay (days) represents the average number of days inpatients stay in our hospitals.
(i)	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 with MedCath’s income (loss) from continuing operations as derived directly from MedCath’s consolidated financial statements for the three months ended December 31, 2005 and 2004.

	Three Months Ended December 31,
	2005			2004
	(in thousands)
Income (loss) from continuing operations	$	(1,333	)	$	2,592
Add:
Income tax expense (benefit)		(887	)		1,723
Minority interest share of earnings of consolidated subsidiaries		2,818			3,999
Equity in net earnings of unconsolidated affiliates		(1,065	)		(769	)
Interest and other income, net		(1,417	)		(395	)
Interest expense		9,068			7,998
Loss on disposal of property, equipment and other assets		119			3
Amortization		252			290
Depreciation		9,641			9,736
Share-based compensation expense		417			—
Adjusted EBITDA	$	17,613		$	25,177

     The following table reconciles estimated Adjusted EBITDA with MedCath’s estimated net income for the guidance for the fiscal year ending September 30, 2006.

	Fiscal 2006 Guidance Range
	(in millions)
Net income	$	7.5	$	8.5
Add:
Income tax expense (benefit)		5.0		5.6
Minority interest share of earnings of consolidated subsidiaries		13.0		15.4
Total other expenses, net		26.0		26.0
Amortization		1.0		1.0
Depreciation		40.5		40.5
Adjusted EBITDA	$	93.0	$	97.0