Medcath (MDTH) 8-K Results of Operations and Financial Condition

Exhibit 99.1

	Three Months Ended
	September 30,			June 30,			March 31,			December 31,
	2004			2004			2004			2003
Consolidated Statements of Operations: (in thousands, except per share data)
Net revenue	$	164,821		$	162,137		$	152,754		$	138,466
Operating expenses:
Personnel expense		50,930			50,341			47,599			42,623
Medical supplies expense		46,662			46,597			41,720			38,226
Bad debt expense		11,877			9,088			8,502			11,280
Other operating expenses		33,148			34,280			33,652			28,432
Pre-opening expenses		—			—			2,087			3,016
Depreciation		9,503			10,388			9,900			9,184
Amortization		290			290			290			290
Loss (gain) on disposal of property, equipment and other assets		113			35			26			(85	)
Impairments of long-lived assets		7,227			—			—			—
Total operating expenses		159,750			151,019			143,776			132,966
Income from operations		5,071			11,118			8,978			5,500
Other income (expenses):
Interest expense		(7,741	)		(6,280	)		(6,147	)		(5,711	)
Interest and other income, net		245			216			160			233
Loss on debt refinancing		(5,072	)		—			—			—
Equity in net earnings of unconsolidated affiliates		916			900			1,147			577
Total other expenses, net		(11,652	)		(5,164	)		(4,840	)		(4,901	)
Income (loss) from continuing operations before minority interest, taxes and discontinued operations		(6,581	)		5,954			4,138			599
Minority interest share of (earnings) losses of consolidated subsidiaries		(3,381	)		(2,852	)		65			(711	)
Income (loss) from continuing operations before income taxes and discontinued operations		(9,962	)		3,102			4,203			(112	)
Income tax expense (benefit)		(3,923	)		1,045			1,621			(45	)
Income (loss) from continuing operations		(6,039	)		2,057			2,582			(67	)
Income (loss) from discontinued operations		(672	)		(677	)		59			(866	)
Net income (loss)	$	(6,711	)	$	1,380		$	2,641		$	(933	)
Earnings (loss) per share, basic
Continuing operations	$	(0.33	)	$	0.12		$	0.15		$	(0.00	)
Discontinued operations	$	(0.04	)	$	(0.04	)	$	0.00		$	(0.05	)
Earnings (loss) per share, basic	$	(0.37	)	$	0.08		$	0.15		$	(0.05	)
Earnings (loss) per share, diluted
Continuing operations	$	(0.33	)	$	0.11		$	0.14		$	(0.00	)
Discontinued operations	$	(0.04	)	$	(0.04	)	$	0.00		$	(0.05	)
Earnings (loss) per share, diluted	$	(0.37	)	$	0.07		$	0.14		$	(0.05	)
Weighted average number of shares, basic		18,014			17,990			17,985			17,949
Dilutive effect of stock options		—			826			514			—
Weighted average number of shares, diluted		18,014			18,816			18,499			17,949
Consolidated Balance Sheet Data:(in thousands)
Cash and cash equivalents	$	69,855		$	87,967		$	80,864		$	78,051
Working capital		102,681			102,820			56,291			60,506
Total assets		754,236			773,072			779,955			747,516
Long-term debt and capital leases, excluding current maturities		351,097			314,845			298,360			290,085
Other long-term obligations		1,620			2,236			3,094			2,649
Stockholders’ equity		263,648			269,714			267,228			264,625
Selected Operating Data (consolidated) (a):
Number of hospitals		10			10			10			8
Licensed beds (d)		612			612			612			520
Staffed and available beds (e)		536			541			525			464
Admissions (f)		10,156			9,834			9,533			8,674
Adjusted admissions (g)		12,979			12,388			11,902			10,837
Patient days (h)		34,329			33,730			34,065			31,243
Adjusted patient days (i)		43,617			42,405			42,493			39,033
Average length of stay (j)		3.38			3.43			3.57			3.6
Occupancy (k)		69.6	%		68.5	%		72.1	%		73.2	%
Inpatient catheterization procedures		5,357			5,284			4,920			4,189
Inpatient surgical procedures		2,687			2,611			2,511			2,183
Selected Operating Data (same facility) (b):
Number of hospitals		8			8			7			7
Licensed beds (d)		520			520			462			462
Staffed and available beds (e)		471			471			429			428
Admissions (f)		9,112			8,935			8,799			8,288
Adjusted admissions (g)		11,777			11,352			10,952			10,304
Patient days (h)		30,969			30,808			31,708			30,131
Adjusted patient days (i)		39,756			39,040			39,452			37,496
Average length of stay (j)		3.4			3.45			3.6			3.64
Occupancy (k)		71.5	%		71.9	%		81.2	%		76.5	%
Inpatient catheterization procedures		4,580			4,610			4,457			3,948
Inpatient surgical procedures		2,461			2,417			2,271			2,050
Selected Operating Data (same facility — as of subsequent comparable period end date) (c):
Number of hospitals		10			10			8			8
Licensed beds (d)		612			612			520			520
Staffed and available beds (e)		536			541			471			464
Admissions (f)		10,156			9,834			9,244			8,674
Adjusted admissions (g)		12,979			12,388			11,552			10,837
Patient days (h)		34,329			33,730			33,115			31,243
Adjusted patient days (i)		43,617			42,405			41,352			39,033
Average length of stay (j)		3.38			3.43			3.58			3.6
Occupancy (k)		69.6	%		68.5	%		78.1	%		73.2	%
Inpatient catheterization procedures		5,357			5,284			4,715			4,189
Inpatient surgical procedures		2,687			2,611			2,426			2,183

(a)	Selected operating data includes consolidated hospitals in operation as of the end of period reported in continuing operations but does not include hospitals which were accounted for using the equity method or as discontinued operations in our consolidated financial statements.
(b)	Selected operating data includes those consolidated hospitals that were open and operational for the three months ending each quarter of fiscal year 2004 that were also operational for the three months ending the same quarter of fiscal year 2003.
(c)	Selected operating data includes those consolidated hospitals that were open and operational for the three months ending each quarter of fiscal year 2004 that were also operational for the three months ending the same quarter of fiscal year 2005.
(d)	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.
(e)	Staffed and available beds represent the number of beds that are readily available for patient use at the end of the period.
(f)	Admissions represent the number of patients admitted for inpatient treatment.
(g)	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.
(h)	Patient days represent the total number of days of care provided to inpatients.
(i)	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.
(j)	Average length of stay (days) represents the average number of days inpatients stay in our hospitals.
(k)	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.

	Three Months Ended
	September 30,			June 30,			March 31,			December 31,
	2005			2005			2005			2004
Consolidated Statements of Operations:
(in thousands, except per share data)
Net revenue	$	175,547		$	179,787		$	176,074		$	168,295
Operating expenses:
Personnel expense		55,010			53,893			53,864			52,117
Medical supplies expense		48,512			51,047			50,234			47,532
Bad debt expense		14,340			13,874			11,743			10,446
Other operating expenses		35,490			36,286			35,852			35,178
Pre-opening expenses		—			—			—			—
Depreciation		10,379			9,034			8,937			9,243
Amortization		290			290			290			290
Loss (gain) on disposal of property, equipment and other assets		(824	)		148			55			1
Impairments of long-lived assets		2,662			—			—			—
Total operating expenses		165,859			164,572			160,975			154,807
Income from operations		9,688			15,215			15,099			13,488
Other income (expenses):
Interest expense		(8,705	)		(8,440	)		(7,813	)		(7,876	)
Interest and other income, net		1,175			868			613			389
Equity in net earnings of unconsolidated affiliates		802			899			886			769
Total other expenses, net		(6,728	)		(6,673	)		(6,314	)		(6,718	)
Income from continuing operations before minority interest, taxes and discontinued operations		2,960			8,542			8,785			6,770
Minority interest share of earnings of consolidated subsidiaries		(3,611	)		(3,956	)		(4,402	)		(3,999	)
Income (loss) from continuing operations before income taxes and discontinued operations		(651	)		4,586			4,383			2,771
Income tax expense (benefit)		(101	)		1,952			1,755			1,107
Income (loss) from continuing operations		(550	)		2,634			2,628			1,164
Income (loss) from discontinued operations		(1,751	)		115			1,175			2,876
Net income (loss)	$	(2,301	)	$	2,749		$	3,803		$	4,540
Earnings (loss) per share, basic
Continuing operations	$	(0.03	)	$	0.14		$	0.15		$	0.09
Discontinued operations	$	(0.09	)	$	0.01		$	0.06		$	0.16
Earnings (loss) per share, basic	$	(0.12	)	$	0.15		$	0.21		$	0.25
Earnings (loss) per share, diluted
Continuing operations	$	(0.03	)	$	0.13		$	0.14		$	0.09
Discontinued operations	$	(0.09	)	$	0.01		$	0.06		$	0.15
Earnings (loss) per share, diluted	$	(0.12	)	$	0.14		$	0.20		$	0.24
Weighted average number of shares, basic		18,493			18,425			18,177			18,045
Dilutive effect of stock options		—			1,248			1,285			932
Weighted average number of shares, diluted		18,493			19,673			19,462			18,977
Consolidated Balance Sheet Data:
(in thousands)
Cash and cash equivalents	$	140,842		$	140,317		$	121,703		$	113,927
Working capital		135,101			124,678			124,373			150,680
Total assets		763,205			770,704			771,858			763,048
Long-term debt and capital leases, excluding current maturities		299,401			298,509			313,327			348,558
Other long-term obligations		497			808			829			1,204
Stockholders’ equity		282,741			283,508			278,094			269,499
Selected Operating Data (consolidated) (a):
Number of hospitals		10			10			10			10
Licensed beds (c)		612			612			612			612
Staffed and available beds (d)		578			571			571			571
Admissions (e)		10,482			10,364			10,788			9,967
Adjusted admissions (f)		13,694			13,555			14,008			12,790
Patient days (g)		35,039			36,281			39,186			34,271
Adjusted patient days (h)		45,465			47,202			50,788			43,689
Average length of stay (i)		3.34			3.50			3.63			3.44
Occupancy (j)		65.9	%		69.8	%		76.3	%		65.2	%
Inpatient catheterization procedures		5,616			5,457			5,427			5,336
Inpatient surgical procedures		2,816			2,915			2,964			2,616
Selected Operating Data (same facility) (b):
Number of hospitals		10			10			8			8
Licensed beds (c)		612			612			520			520
Staffed and available beds (d)		578			571			487			487
Admissions (e)		10,482			10,364			9,568			8,950
Adjusted admissions (f)		13,694			13,555			12,597			11,626
Patient days (g)		35,039			36,281			34,759			30,457
Adjusted patient days (h)		45,465			47,202			45,668			39,345
Average length of stay (i)		3.34			3.50			3.63			3.40
Occupancy (j)		65.9	%		69.8	%		79.3	%		68.0	%
Inpatient catheterization procedures		5,616			5,457			4,577			4,628
Inpatient surgical procedures		2,816			2,915			2,683			2,372

(a)	Selected operating data includes consolidated hospitals in operation as of the end of period reported in continuing operations but does not include hospitals which were accounted for using the equity method or as discontinued operations in our consolidated financial statements.
(b)	Selected operating data includes those consolidated hospitals that were open and operational for the three months ending each quarter of fiscal year 2005 that were also operational for the three months ending the same quarter of fiscal year 2004.
(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.

	Three Months Ended
	June 30,			March 31,			December 31,
	2006			2006			2005
Consolidated Statements of Operations:
(in thousands, except per share data)
Net revenue	$	189,832		$	192,488		$	171,836
Operating expenses:
Personnel expense		58,033			67,934			55,244
Medical supplies expense		52,657			53,915			48,163
Bad debt expense		14,228			16,788			13,389
Other operating expenses		37,916			37,868			38,339
Pre-opening expenses		—			—			—
Depreciation		9,366			9,264			9,171
Amortization		252			252			252
Loss (gain) on disposal of property, equipment and other assets		(296	)		(38	)		97
Impairments of long-lived assets		451			—			—
Total operating expenses		172,607			185,983			164,655
Income from operations		17,225			6,505			7,181
Other income (expenses):
Interest expense		(7,870	)		(8,899	)		(9,059	)
Interest and other income, net		2,977			1,367			1,404
Equity in net earnings of unconsolidated affiliates		1,408			1,410			1,065
Total other expenses, net		(3,485	)		(6,122	)		(6,590	)
Income from continuing operations before minority interest, taxes and discontinued operations		13,740			383			591
Minority interest share of earnings of consolidated subsidiaries		(4,742	)		(4,790	)		(2,818	)
Income (loss) from continuing operations before income taxes and discontinued operations		8,998			(4,407	)		(2,227	)
Income tax expense (benefit)		3,649			(1,766	)		(890	)
Income (loss) from continuing operations		5,349			(2,641	)		(1,337	)
Income (loss) from discontinued operations		(439	)		701			4
Net income (loss)	$	4,910		$	(1,940	)	$	(1,333	)
Earnings (loss) per share, basic
Continuing operations	$	0.28		$	(0.14	)	$	(0.07	)
Discontinued operations	$	(0.02	)	$	0.04		$	—
Earnings (loss) per share, basic	$	0.26		$	(0.10	)	$	(0.07	)
Earnings (loss) per share, diluted
Continuing operations	$	0.27		$	(0.14	)	$	(0.07	)
Discontinued operations	$	(0.02	)	$	0.04		$	—
Earnings (loss) per share, diluted	$	0.25		$	(0.10	)	$	(0.07	)
Weighted average number of shares, basic		18,630			18,618			18,501
Dilutive effect of stock options and restricted stock		661			—			—
Weighted average number of shares, diluted		19,291			18,618			18,501
Consolidated Balance Sheet Data:
(in thousands)
Cash and cash equivalents	$	144,561		$	124,855		$	135,315
Working capital		155,460			140,164			146,450
Total assets		767,515			758,168			762,962
Long-term debt and capital leases, excluding current maturities		298,087			300,278			313,374
Other long-term obligations		319			307			341
Stockholders’ equity		299,480			291,919			282,533
Selected Operating Data (consolidated) (a):
Number of hospitals		10			10			10
Licensed beds (c)		612			612			612
Staffed and available beds (d)		595			600			607
Admissions (e)		11,115			11,484			10,388
Adjusted admissions (f)		14,494			14,825			13,504
Patient days (g)		35,508			38,820			35,169
Adjusted patient days (h)		46,318			50,245			45,578
Average length of stay (i)		3.19			3.38			3.39
Occupancy (j)		65.6	%		71.9	%		63.0	%
Inpatient catheterization procedures		5,838			5,983			5,208
Inpatient surgical procedures		2,920			3,103			2,679
Selected Operating Data (same facility) (b):
Number of hospitals		10			10			10
Licensed beds (c)		612			612			612
Staffed and available beds (d)		595			600			607
Admissions (e)		11,115			11,484			10,388
Adjusted admissions (f)		14,494			14,825			13,504
Patient days (g)		35,508			38,820			35,169
Adjusted patient days (h)		46,318			50,245			45,578
Average length of stay (i)		3.19			3.38			3.39
Occupancy (j)		65.6	%		71.9	%		63.0	%
Inpatient catheterization procedures		5,838			5,983			5,208
Inpatient surgical procedures		2,920			3,103			2,679

(a)	Selected operating data includes consolidated hospitals in operation as of the end of period reported in continuing operations but does not include hospitals which were accounted for using the equity method or as discontinued operations in our consolidated financial statements.
(b)	Selected operating data includes those consolidated hospitals that were open and operational for the three months ending each quarter of fiscal year 2006 that were also operational for the three months ending the same quarter of fiscal year 2005.
(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.