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 September 30, | Twelve Months Ended September 30, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| Net revenue | $ | 158,641 | $ | 177,444 | $ | 718,959 | $ | 706,374 | ||||||||
| Operating expenses: | ||||||||||||||||
| Personnel expense | 51,976 | 55,472 | 229,844 | 228,350 | ||||||||||||
| Medical supplies expense | 42,907 | 47,684 | 192,036 | 196,046 | ||||||||||||
| Bad debt expense | 10,005 | 14,395 | 55,162 | 56,845 | ||||||||||||
| Other operating expenses | 31,145 | 35,008 | 142,584 | 141,498 | ||||||||||||
| Pre-opening expenses | 555 | — | 555 | — | ||||||||||||
| Depreciation | 7,332 | 8,863 | 33,602 | 34,792 | ||||||||||||
| Amortization | 126 | 252 | 631 | 1,008 | ||||||||||||
| Loss (gain) on disposal of property, equipment and other assets | 419 | 95 | 1,466 | (142 | ) | |||||||||||
| Impairment of long-lived assets | — | 7 | — | 458 | ||||||||||||
| Total operating expenses | 144,465 | 161,776 | 655,880 | 658,855 | ||||||||||||
| Income from operations | 14,176 | 15,668 | 63,079 | 47,519 | ||||||||||||
| Other income (expenses): | ||||||||||||||||
| Interest expense | (4,014 | ) | (7,952 | ) | (22,464 | ) | (31,840 | ) | ||||||||
| Loss on early extinguishment of debt | (4,789 | ) | — | (9,931 | ) | (1,370 | ) | |||||||||
| Interest and other income, net | 1,570 | 2,029 | 7,855 | 7,733 | ||||||||||||
| Equity in net earnings of unconsolidated affiliates | 1,644 | 1,036 | 5,739 | 4,919 | ||||||||||||
| Total other expenses, net | (5,589 | ) | (4,887 | ) | (18,801 | ) | (20,558 | ) | ||||||||
| Income from continuing operations before minority interest, income taxes and discontinued operations | 8,587 | 10,781 | 44,278 | 26,961 | ||||||||||||
| Minority interest share of earnings of consolidated subsidiaries | (4,221 | ) | (3,171 | ) | (14,575 | ) | (15,521 | ) | ||||||||
| Income from continuing operations before income taxes and discontinued operations | 4,366 | 7,610 | 29,703 | 11,440 | ||||||||||||
| Income tax expense | 1,834 | 3,120 | 12,476 | 4,729 | ||||||||||||
| Income from continuing operations | 2,532 | 4,490 | 17,227 | 6,711 | ||||||||||||
| Income (loss) from discontinued operations, net of taxes | (1,624 | ) | 6,449 | (5,700 | ) | 5,865 | ||||||||||
| Net income (loss) | $ | 908 | $ | 10,939 | $ | 11,527 | $ | 12,576 | ||||||||
| Earnings (loss) per share, basic | ||||||||||||||||
| Continuing operations | $ | 0.12 | $ | 0.24 | $ | 0.82 | $ | 0.36 | ||||||||
| Discontinued operations | (0.08 | ) | 0.34 | (0.26 | ) | 0.31 | ||||||||||
| Earnings (loss) per share, basic | $ | 0.04 | $ | 0.58 | $ | 0.56 | $ | 0.67 | ||||||||
| Earnings (loss) per share, diluted | ||||||||||||||||
| Continuing operations | $ | 0.12 | $ | 0.23 | $ | 0.80 | $ | 0.34 | ||||||||
| Discontinued operations | (0.08 | ) | 0.32 | (0.26 | ) | 0.30 | ||||||||||
| Earnings (loss) per share, diluted | $ | 0.04 | $ | 0.55 | $ | 0.54 | $ | 0.64 | ||||||||
| Weighted average number of shares, basic | 21,202 | 18,872 | 20,872 | 18,656 | ||||||||||||
| Dilutive effect of stock options and restricted stock | 579 | 1,037 | 639 | 899 | ||||||||||||
| Weighted average number of shares, diluted | 21,781 | 19,909 | 21,511 | 19,555 | ||||||||||||
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, | |||||||||||||||||||||||
| 2007 | 2006 | % Change | 2007 | 2006 | % Change | |||||||||||||||||||
Statement of Operations Data: | ||||||||||||||||||||||||
| Net revenue | $ | 158,641 | $ | 177,444 | (10.6 | )% | $ | 718,959 | $ | 706,374 | 1.8 | % | ||||||||||||
| Adjusted EBITDA (1) | $ | 23,097 | $ | 25,727 | (10.2 | )% | $ | 103,671 | $ | 96,857 | 7.0 | % | ||||||||||||
| Income from operations | $ | 14,176 | $ | 15,668 | (9.5 | )% | $ | 63,079 | $ | 47,519 | 32.7 | % | ||||||||||||
| Income from continuing operations | $ | 2,532 | $ | 4,490 | (43.6 | )% | $ | 17,227 | $ | 6,711 | 156.7 | % | ||||||||||||
| Earnings per share from continuing operations, basic | $ | 0.12 | $ | 0.24 | (500.0 | )% | $ | 0.82 | $ | 0.36 | 127.8 | % | ||||||||||||
| Earnings per share from continuing operations, diluted | $ | 0.12 | $ | 0.23 | (478.3 | )% | $ | 0.80 | $ | 0.34 | 135.3 | % | ||||||||||||
(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, | |||||||||||||||||||||||
| 2007 | 2006 | % Change | 2007 | 2006 | % Change | |||||||||||||||||||
Selected Operating Data (a): | ||||||||||||||||||||||||
| Number of hospitals | 8 | 9 | 8 | 9 | ||||||||||||||||||||
| Licensed beds ( c ) | 468 | 580 | 468 | 580 | ||||||||||||||||||||
| Staffed and available beds ( d ) | 451 | 563 | 451 | 563 | ||||||||||||||||||||
| Admissions ( e ) | 8,017 | 9,991 | (19.8 | )% | 38,757 | 41,406 | (6.4 | )% | ||||||||||||||||
| Adjusted admissions ( f ) | 10,772 | 13,356 | (19.3 | )% | 52,714 | 54,186 | (2.7 | )% | ||||||||||||||||
| Patient days ( g ) | 27,336 | 32,258 | (15.3 | )% | 132,937 | 136,532 | (2.6 | )% | ||||||||||||||||
| Adjusted patient days ( h ) | 36,907 | 43,018 | (14.2 | )% | 180,258 | 178,667 | 0.9 | % | ||||||||||||||||
| Average length of stay (days) ( i ) | 3.41 | 3.23 | 5.6 | % | 3.43 | 3.30 | 3.9 | % | ||||||||||||||||
| Occupancy ( j ) | 65.9 | % | 62.3 | % | 80.8 | % | 66.4 | % | ||||||||||||||||
| Inpatients with a catheterization procedure ( k ) | 4,415 | 5,032 | (12.3 | )% | 19,878 | 21,163 | (6.1 | )% | ||||||||||||||||
| Inpatient surgical procedures ( l ) | 2,137 | 2,650 | (19.4 | )% | 10,193 | 10,764 | (5.3 | )% | ||||||||||||||||
| Hospital net revenue | $ | 146,771 | $ | 163,867 | (10.4 | )% | $ | 665,908 | $ | 648,898 | 2.6 | % | ||||||||||||
Selected Operating Data — Same Facility (a): | ||||||||||||||||||||||||
| Number of hospitals | 8 | 8 | 8 | 8 | ||||||||||||||||||||
| Licensed beds ( c ) | 468 | 468 | 468 | 468 | ||||||||||||||||||||
| Staffed and available beds ( d ) | 451 | 451 | 451 | 451 | ||||||||||||||||||||
| Admissions ( e ) | 8,017 | 8,242 | (2.7 | )% | 33,277 | 34,099 | (2.4 | )% | ||||||||||||||||
| Adjusted admissions ( f ) | 10,772 | 10,569 | 1.9 | % | 43,783 | 43,138 | 1.5 | % | ||||||||||||||||
| Patient days ( g ) | 27,336 | 27,794 | (1.6 | )% | 117,065 | 115,574 | 1.3 | % | ||||||||||||||||
| Adjusted patient days ( h ) | 36,907 | 35,905 | 2.8 | % | 154,390 | 146,980 | 5.0 | % | ||||||||||||||||
| Average length of stay (days) ( i ) | 3.41 | 3.37 | 1.2 | % | 3.52 | 3.39 | 3.8 | % | ||||||||||||||||
| Occupancy ( j ) | 65.9 | % | 67.0 | % | 71.1 | % | 70.2 | % | ||||||||||||||||
| Inpatients with a catheterization procedure ( k ) | 4,415 | 4,856 | (9.1 | )% | 19,252 | 20,403 | (5.6 | )% | ||||||||||||||||
| Inpatient surgical procedures ( l ) | 2,137 | 2,227 | (4.0 | )% | 8,751 | 9,523 | (8.1 | )% | ||||||||||||||||
| Hospital net revenue | $ | 146,771 | $ | 147,445 | (0.5 | )% | $ | 604,896 | $ | 580,757 | 4.2 | % | ||||||||||||
Combined Operating Data (b): | ||||||||||||||||||||||||
| Number of hospitals | 10 | 10 | 10 | 10 | ||||||||||||||||||||
| Licensed beds ( c ) | 635 | 635 | 635 | 635 | ||||||||||||||||||||
| Staffed and available beds ( d ) | 614 | 618 | 614 | 618 | ||||||||||||||||||||
| Admissions ( e ) | 10,678 | 10,833 | (1.4 | )% | 44,249 | 44,858 | (1.4 | )% | ||||||||||||||||
| Adjusted admissions ( f ) | 14,828 | 14,319 | 3.6 | % | 59,977 | 58,094 | 3.2 | % | ||||||||||||||||
| Patient days ( g ) | 35,794 | 35,270 | 1.5 | % | 152,070 | 149,321 | 1.8 | % | ||||||||||||||||
| Adjusted patient days ( h ) | 49,592 | 46,463 | 6.7 | % | 205,037 | 193,147 | 6.2 | % | ||||||||||||||||
| Average length of stay (days) ( i ) | 3.35 | 3.26 | 2.8 | % | 3.44 | 3.33 | 3.3 | % | ||||||||||||||||
| Occupancy ( j ) | 63.4 | % | 62.0 | % | 67.9 | % | 66.2 | % | ||||||||||||||||
| Inpatients with a catheterization procedure ( k ) | 5,230 | 5,573 | (6.2 | )% | 22,510 | 23,366 | (3.7 | )% | ||||||||||||||||
| Inpatient surgical procedures ( l ) | 2,823 | 2,873 | (1.7 | )% | 11,653 | 11,715 | (0.5 | )% | ||||||||||||||||
| Hospital net revenue | $ | 184,630 | $ | 178,196 | 3.6 | % | $ | 753,887 | $ | 710,243 | 6.1 | % | ||||||||||||
| (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 all periods presented excludes Harlingen 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. |
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 twelve months ended September 30, 2007 and 2006.
| Three Months Ended September 30, | Twelve Months Ended September 30, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| (in thousands) | ||||||||||||||||
| Income from continuing operations | $ | 2,532 | $ | 4,490 | $ | 17,227 | $ | 6,711 | ||||||||
| Add: | ||||||||||||||||
| Income tax expense | 1,834 | 3,120 | 12,476 | 4,729 | ||||||||||||
| Minority interest share of earnings of consolidated subsidiaries | 4,221 | 3,171 | 14,575 | 15,521 | ||||||||||||
| Equity in net earnings of unconsolidated affiliates | (1,644 | ) | (1,036 | ) | (5,739 | ) | (4,919 | ) | ||||||||
| Interest and other income, net | (1,570 | ) | (2,029 | ) | (7,855 | ) | (7,733 | ) | ||||||||
| Loss on early extinguishment of debt | 4,789 | — | 9,931 | 1,370 | ||||||||||||
| Interest expense | 4,014 | 7,952 | 22,464 | 31,840 | ||||||||||||
| Impairment of long-lived assets | — | 7 | — | 458 | ||||||||||||
| Loss (gain) on disposal of property, equipment and other assets | 419 | 95 | 1,466 | (142 | ) | |||||||||||
| Amortization | 126 | 252 | 631 | 1,008 | ||||||||||||
| Depreciation | 7,332 | 8,863 | 33,602 | 34,792 | ||||||||||||
| Pre-opening expenses | 555 | — | 555 | — | ||||||||||||
| Share-based compensation expense | 489 | 842 | 4,338 | 13,222 | ||||||||||||
| Adjusted EBITDA | $ | 23,097 | $ | 25,727 | $ | 103,671 | $ | 96,857 | ||||||||
The following table reconciles estimated Adjusted EBITDA with MedCath’s estimated net income for the guidance for the fiscal year ending September 30, 2008.
| Fiscal 2008 Guidance Range | ||||||||
| (in millions) | ||||||||
| Income from continuing operations | $ | 32.8 | $ | 34.3 | ||||
| Add: | ||||||||
| Income tax benefit | $ | 21.9 | $ | 22.8 | ||||
| Minority interest share of earnings of consolidated subsidiaries | $ | 20.4 | $ | 22.9 | ||||
| Equity in net earnings of unconsolidated affiliates | $ | (7.5 | ) | $ | (8.4 | ) | ||
| Interest expense, net | $ | 10.9 | $ | 10.9 | ||||
| Depreciation and amortization | $ | 31.5 | $ | 31.5 | ||||
| Adjusted EBITDA | $ | 110.0 | $ | 114.0 | ||||