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Gentiva Health Services, Inc.http://www.gentiva.com Gentiva Health Services, Melville New York, United States of America. Gentiva Health Services, Inc. is the nation's largest provider of comprehensive home health and related services. Gentiva serves patients through more than 500 direct service delivery units within Gentiva(R) Health Services Reports Third Quarter 2009 ResultsThursday 29th of October 2009 7:00
-- Net revenues of $295.6 million for the quarter ended September 27, 2009
compared to $345.2 million, which included net revenues of $75.5 million
from its CareCentrix business unit, for the quarter ended September 28,
2008. Excluding prior year's third quarter net revenues from
CareCentrix, Gentiva's net revenues grew over $25 million, or 9% in the
2009 third quarter. The Company sold a majority ownership interest in
CareCentrix to Water Street Healthcare Partners on September 25, 2008.
-- Net income of $15.4 million, or $0.52 per diluted share compared to net
income of $120.9 million or $4.07 per diluted share in the 2008 third
quarter. Third quarter 2008 results included a non-recurring gain of
$107.9 million or $3.67 per diluted share relating to the sale of a
majority ownership interest in CareCentrix.
-- Adjusted net income for the 2009 third quarter was $15.9 million, up 27%
compared with the prior year period. On a diluted earnings per share
basis, adjusted net income in the 2009 third quarter was $0.54 per
diluted share compared with $0.42 per diluted share in the corresponding
period of 2008. Adjusted net income for both third quarter periods
excludes special charges of $0.02 per diluted share relating to
restructuring and merger and acquisition activities. In addition,
adjusted 2008 third quarter results exclude a non-recurring gain
relating to the sale of a majority ownership interest in CareCentrix.
-- Earnings before interest, taxes, depreciation and amortization (EBITDA)
increased 8% to $31.0 million in the third quarter of 2009. EBITDA as a
percentage of net revenues improved to 10.5% in the third quarter of
2009 versus 8.3% in the prior-year period. EBITDA included restructuring
and integration costs of $0.9 million in the third quarter of 2009 as
compared to $1.4 million for the prior year period.
"Gentiva continues to execute well on its business strategy and we are well on track to achieve our full year 2009 financial outlook, with expectations toward the higher end of the earnings range," said Gentiva CEO Tony Strange. "Growth trends in both our Home Health and Hospice business units remain solid as we intensify our focus on serving the needs of the nation's growing high-acuity senior population. We are delivering on the key initiatives that will grow our company, including increasing the penetration of our specialty care programs, recruiting and retaining the best caregivers in the business, and operating efficiently, with a strong balance sheet." Gentiva reported these segment highlights for the quarter:
-- Home Health revenue growth of 9% to $261.4 million and operating
contribution growth of 7% to $41.4 million.
-- Revenues in the All Other segment - which includes hospice, respiratory
therapy and home medical equipment, infusion therapy and consulting -
increased 11% to $34.6 million, while operating contribution increased
70% to $5.0 million compared to the prior-year period.
Gentiva reported these highlights for the nine months ended September 27, 2009:
-- Net revenues of $882.6 million versus $1.01 billion in the prior year
period. Net revenues in the 2008 period included approximately $232.7
million relating to CareCentrix. Excluding the revenue contribution
from CareCentrix, Gentiva's net revenues grew about $103 million, or
13%, in the nine-month period ended September 27, 2009.
-- Net income of $50.5 million, or $1.70 per diluted share which included
(i) a non-recurring pre-tax net gain of $5.7 million or $0.19 per
diluted share resulting from the 2009 first quarter sale of certain
branch offices that specialized primarily in pediatric home health care
services and (ii) special pre-tax charges of $2.4 million or $0.05 per
diluted share relating to restructuring and merger and acquisition
costs. These results compared to net income of $140.6 million or $4.80
per diluted share in the 2008 period which included a net gain of $3.72
per diluted share from the sale of CareCentrix and special pre-tax
charges of $2.1 million or $0.04 per diluted share relating to
restructuring and merger and acquisition costs.
-- Adjusted net income was $46.3 million, up 41% compared with the prior
year period. On a diluted earnings per share basis, adjusted net income
in the 2009 period was $1.56 compared with $1.12 in the corresponding
period of 2008. Adjusted net income excludes non-recurring transaction
gains and special charges relating to restructuring and merger and
acquisition activities in both periods.
-- EBITDA increased 13% to $94.7 million versus $84.1 million in the
prior-year period.
-- Operating cash flow was $76.5 million in the 2009 period compared to
$51.1 million in the comparable 2008 period.
At September 27, 2009, the Company reported cash and cash equivalents of $120.3 million and long-term debt of $237.0 million. Full-Year 2009 Outlook Gentiva announced that it is reaffirming its revenue and earnings outlook for fiscal 2009. Gentiva anticipates full-year 2009 net revenues will range between $1.19 billion to $1.21 billion. On a diluted earnings per share basis, adjusted net income is expected to be in a range between $2.04 and $2.10 per diluted share. Gentiva's 2009 outlook represents an increase in net revenues of 12% to 14% and an increase in adjusted net income per diluted share of 45% to 50% when compared with 2008 pro forma financial results, which reflect the Company's performance as if the CareCentrix divestiture had occurred at the beginning of fiscal 2008. The 2009 outlook excludes special charges relating to restructuring and merger and acquisition costs which are expected to range between $3 million and $4 million for the year and non-recurring charges and credits. The outlook includes the impact of recently announced acquisitions and also reflects 53 weeks of activity in fiscal 2009. Non-GAAP Financial Measures The information provided in this press release includes certain non-GAAP financial measures as defined under Securities and Exchange Commission (SEC) rules. In accordance with SEC rules, the Company has provided, in the supplemental information and the footnotes to the tables, a reconciliation of those measures to the most directly comparable GAAP measures. Conference Call and Web Cast Details The Company will comment further on its third quarter 2009 results during its conference call and live web cast to be held Thursday, October 29, 2009 at 10:00 a.m. Eastern Time. To participate in the call from the United States, Canada or an international location, dial (973) 935-2408 and reference call #35210278. The web cast is an audio-only, one-way event. Web cast listeners who wish to ask questions must participate in the conference call. Log onto http://investors.gentiva.com/events.cfm to hear the web cast. A replay of the call will be available on October 29, beginning at approximately 1 p.m. ET, and will remain available continuously through November 5. To listen to a replay of the call from the United States, Canada or international locations, dial (800) 642-1687 or (706) 645-9291 and enter the following PIN at the prompt: 35210278. Visit http://investors.gentiva.com/events.cfm to access the web cast archive. This press release is accessible at http://investors.gentiva.com/releases.cfm and a transcript of the conference call is expected to be available on the site within 48 hours after the call. About Gentiva Health Services, Inc. Gentiva Health Services, Inc. is a leading provider of comprehensive home health services, delivering innovative, high quality care to patients across the United States. Gentiva is a single source for skilled nursing; physical, occupational, speech and neurorehabilitation services; hospice services; social work; nutrition; disease management education; help with daily living activities; respiratory therapy and home medical equipment; infusion therapy services; and other therapies and services. For more information, visit Gentiva's web site, http://www.gentiva.com, and its investor relations section at http://investors.gentiva.com. GTIV-E (unaudited tables and notes follow)
Gentiva Health Services, Inc. and Subsidiaries
Condensed Consolidated Financial Statements and Supplemental
Information
(Unaudited)
(in 000's, except
per share data) 3rd Quarter Nine Months
----------- -----------
2009 2008 2009 2008
---- ---- ---- ----
Statements of Income
--------------------
Net revenues $295,592 $345,243 $882,612 $1,011,089
Cost of services
and goods sold 143,490 194,263 425,474 572,106
------------------ --------------------
Gross profit 152,102 150,980 457,138 438,983
Selling, general
and administrative
expenses (126,624) (127,909) (379,165) (371,358)
Gain on sale of
assets, net - 107,872 5,747 107,872
Interest income 687 338 2,305 1,278
Interest expense
and other (1,985) (4,191) (7,865) (15,876)
------------------ --------------------
Income before
income taxes 24,180 127,090 78,160 160,899
Income tax expense 9,013 6,218 28,417 20,280
------------------ --------------------
Income before equity
in net earnings of
affiliate 15,167 120,872 49,743 140,619
Equity in net earnings
of affiliate 238 20 779 20
------------------ --------------------
Net income $15,405 $120,892 $50,522 $140,639
================== ====================
Earnings per Share
------------------
Net income:
Basic $0.53 $4.21 $1.74 $4.94
================== ====================
Diluted $0.52 $4.07 $1.70 $4.80
================== ====================
Average shares
outstanding:
Basic 29,154 28,687 29,019 28,489
================== ====================
Diluted 29,800 29,718 29,648 29,320
================== ====================
Condensed Balance Sheets
------------------------
ASSETS Sept 27, 2009 Dec 28, 2008
------ ------------- ------------
Cash and cash equivalents $120,298 $69,201
Short-term investments (A) 5,000 -
Accounts receivable, net (B) 175,728 177,201
Deferred tax assets 12,434 11,933
Prepaid expenses and other current assets 16,487 13,141
--------------------------
Total current assets 329,947 271,476
Long-term investments (A) - 11,050
Note receivable 25,000 25,000
Investment in affiliate 24,043 23,264
Fixed assets, net 69,100 63,815
Intangible assets, net 253,836 250,432
Goodwill 311,135 308,213
Other assets 23,876 20,247
--------------------------
Total assets $1,036,937 $973,497
==========================
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Accounts payable $7,982 $8,027
Payroll and related taxes 24,734 17,869
Deferred revenue 39,893 32,976
Medicare liabilities 6,493 6,680
Obligations under insurance programs 38,530 39,628
Other accrued expenses 34,409 40,895
--------------------------
Total current liabilities 152,041 146,075
Long-term debt 237,000 251,000
Deferred tax liabilities, net 70,559 64,262
Other liabilities 20,998 17,189
Shareholders' equity 556,339 494,971
--------------------------
Total liabilities and
shareholders' equity $1,036,937 $973,497
==========================
Common shares outstanding 29,236 28,864
==========================
(A) Short-term and long-term investments consisted of auction rate
securities with underlying guarantees carrying a AAA rating. At
September 27, 2009, short-term investments were presented at cost as
the Company settled its remaining ARS at par in early October 2009.
At December 28, 2008, long-term investments were presented net of a
valuation allowance of approximately $1.9 million.
(B) Accounts receivable, net, included an allowance for doubtful accounts
of $7.3 million and $8.2 million at September 27, 2009 and December
28, 2008, respectively.
(in 000's)
Nine Months
-----------
Condensed Statements of Cash Flows 2009 2008
---------------------------------- ---- ----
OPERATING ACTIVITIES:
Net income $50,522 $140,639
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 16,705 16,494
Amortization of debt issuance costs 952 1,474
Provision for doubtful accounts 6,307 9,536
Equity-based compensation expense 4,140 4,711
Windfall tax benefits associated with
equity-based compensation (743) (2,087)
Impairment loss on auction rate securities 1,000 -
Gain on sale of assets, net (5,747) (107,872)
Equity in net earnings of affiliate (779) (20)
Deferred income taxes 5,015 11,868
Changes in assets and liabilities, net of
effects from acquisitions and dispositions:
Accounts receivable (4,441) (28,666)
Prepaid expenses and other current assets (3,895) (2,204)
Current liabilities 6,617 6,387
Other, net 813 836
------------------
Net cash provided by operating activities 76,466 51,096
------------------
INVESTING ACTIVITIES:
Purchase of fixed assets (18,157) (19,082)
Proceeds from sale of assets, net of cash
transferred 5,619 81,760
Acquisition of businesses, net of cash acquired (10,325) (60,634)
Purchases of short-term investments
available-for-sale - (28,000)
Maturities of short-term investments
available-for-sale 7,000 46,250
------------------
Net cash (used in) provided by investing
activities (15,863) 20,294
------------------
FINANCING ACTIVITIES:
Proceeds from issuance of common stock 9,228 9,721
Windfall tax benefits associated with equity-
based compensation 743 2,087
Borrowings under revolving credit facility - 24,000
Home Health Care Affiliates debt repayments - (7,420)
Debt issuance costs - (557)
Repayments under the Company's term loan (14,000) (73,000)
Repurchases of common stock (4,813) -
Repayment of capital lease obligations (664) (899)
------------------
Net cash used in financing activities (9,506) (46,068)
------------------
Net change in cash and cash equivalents 51,097 25,322
Cash and cash equivalents at beginning of period 69,201 36,181
------------------
Cash and cash equivalents at end of period $120,298 $61,503
==================
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:
Interest paid $7,067 $17,945
Income taxes paid $27,359 $8,363
(in 000's)
Supplemental Information 3rd Quarter Nine Months
------------------------- ----------- -----------
2009 2008 2009 2008
---- ---- ---- ----
Segment Information (1)
Net revenues
Home Health $261,444 $239,344 $784,770 $693,220
CareCentrix - 75,546 - 232,717
All Other (3) 34,582 31,265 99,140 87,821
Intersegment revenues (434) (912) (1,298) (2,669)
------------------ --------------------
Total net revenues (3) $295,592 $345,243 $882,612 $1,011,089
================== ====================
Operating contribution (4)
Home Health $41,380 $38,841 $133,238 $109,466
CareCentrix (5) - 5,225 - 18,074
All Other 4,963 2,923 12,084 9,046
------------------ --------------------
Total operating
contribution 46,343 46,989 145,322 136,586
Corporate expenses (15,305) (18,177) (50,644) (52,467)
Gain on sale of assets,
net - 107,872 5,747 107,872
Depreciation and
amortization (5,560) (5,741) (16,705) (16,494)
Interest expense, net (6) (1,298) (3,853) (5,560) (14,598)
------------------ --------------------
Income before
income taxes $24,180 $127,090 $78,160 $160,899
================== ====================
3rd Quarter Nine Months
----------- -----------
2009 2008 2009 2008
---- ---- ---- ----
Net Revenues by Major Payer Source:
Medicare
Home Health $189,994 $165,153 $570,204 $471,515
Other 21,835 19,407 62,783 52,900
----------------- -------------------
Total Medicare 211,829 184,560 632,987 524,415
Medicaid and local
government 23,733 32,482 76,705 97,001
Commercial Insurance
and Other:
Paid at episodic rates 20,653 14,091 55,947 38,639
Other 39,377 114,110 116,973 351,034
----------------- -------------------
Total commercial
insurance and other 60,030 128,201 172,920 389,673
----------------- -------------------
Total net revenues $295,592 $345,243 $882,612 $1,011,089
================= ===================
A reconciliation of EBITDA to Net income - As Reported amounts
follows: (2)
3rd Quarter Nine Months
----------- -----------
2009 2008 2009 2008
---- ---- ---- ----
EBITDA (4) $31,038 $28,812 $94,678 $84,119
Gain on sale of assets, net - 107,872 5,747 107,872
Depreciation and
amortization (5,560) (5,741) (16,705) (16,494)
Interest expense, net (6) (1,298) (3,853) (5,560) (14,598)
----------------- -----------------
Income before income taxes 24,180 127,090 78,160 160,899
Income tax expense (7) (9,013) (6,218) (28,417) (20,280)
----------------- -----------------
Income before equity in net
earnings of affiliate 15,167 120,872 49,743 140,619
Equity in net earnings of
affiliate 238 20 779 20
----------------- -----------------
Net income - As Reported $15,405 $120,892 $50,522 $140,639
================= =================
Notes:
1) The Company's senior management evaluates performance and allocates
resources based on operating contributions of the operating segments,
which exclude corporate expenses, depreciation, amortization, and
interest expense (net), but include revenues and all other costs
directly attributable to the specific segment.
2) EBITDA, a non-GAAP financial measure, is defined as income before
interest expense (net of interest income), income taxes, depreciation
and amortization. Management uses EBITDA to evaluate overall
performance and compare current operating results with other companies
in the healthcare industry. EBITDA should not be considered in
isolation or as a substitute for net income, operating income or cash
flow statement data determined in accordance with accounting principles
generally accepted in the United States. Because EBITDA is not a
measure of financial performance under accounting principles generally
accepted in the United States and is susceptible to varying
calculations, it may not be comparable to similarly titled measures in
other companies.
3) Certain reclassifications have been made to the 2008 third quarter and
first nine months statements of income and supplemental information to
conform to the current year presentation. The primary impact of the
reclassifications was to reduce (i) net revenues in All Other and (ii)
cost of services and goods sold by approximately $2.3 million and $6.4
million, in the third quarter and first nine months of 2008,
respectively, relating to the reimbursement of nursing home room and
board charges for hospice patients.
4) Operating contribution and EBITDA for the third quarter and first nine
months of 2009 included special charges of $0.9 million and $2.4
million, respectively. For the third quarter and first nine months of
2008, operating contribution and EBITDA included special charges of
$1.4 million and $2.1 million, respectively. The special charges,
which included restructuring and integration costs and costs and
professional fees associated with merger and acquisition activities,
were reflected as follows for segment reporting (dollars in millions):
3rd Quarter Nine Months
----------- -----------
2009 2008 2009 2008
---- ---- ---- ----
Home Health $0.9 $0.1 $1.4 $0.3
Corporate expenses - 1.3 1.0 1.8
------------ ------------
Total $0.9 $1.4 $2.4 $2.1
============ ============
5) Operating contribution for CareCentrix, in which the Company sold a
majority ownership interest on September 25, 2008, was comprised of the
following (dollars in thousands):
3rd Quarter Nine Months
----------- -----------
2009 2008 2009 2008
---- ---- ---- ----
Gross profit $- $13,669 $- $42,539
Selling, general and
administrative expenses - (8,589) - (24,850)
Add: depreciation - 145 - 385
------------ ------------
Operating contribution $- $5,225 $- $18,074
============ ============
6) Interest expense, net for the first nine months of 2009 included
impairment losses on auction rate securities of approximately $1.0
million.
7) The Company's effective tax rate was 37.3% and 36.4% for the third
quarter and first nine months of 2009, respectively, and 4.9% and 12.6%
for the third quarter and first nine months of 2008, respectively.
During the 2008 periods, the Company recorded a pre-tax gain, net of
transaction costs, of $107.9 million and an income tax benefit of
approximately $1.2 million relating to the sale of a majority interest
in its CareCentrix unit. The CareCentrix transaction generated a
capital loss carryforward for federal tax purposes. During the first
nine months of 2009, the Company recorded a pre-tax gain, net of
transaction costs, of $5.7 million relating to the sale of several
branch offices that specialized primarily in pediatric home health care
services. There was no income tax expense relating to the gain on sale
of assets in 2009 due to the utilization of a capital loss
carryforward. Excluding the impact of the non-recurring gains, the
Company's effective tax rate would have been 37.3% and 39.2% for the
third quarter and first nine months of 2009, respectively, and 38.9%
and 40.6% for the third quarter and first nine months of 2008,
respectively.
Forward-Looking Statement Certain statements contained in this news release, including, without limitation, statements containing the words "believes," "anticipates," "intends," "expects," "assumes," "trends" and similar expressions, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based upon the Company's current plans, expectations and projections about future events. However, such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These factors include, among others, the following: economic and business conditions, including the ability to access capital markets; demographic changes; changes in, or failure to comply with, existing governmental regulations; legislative proposals for healthcare reform; changes in Medicare and Medicaid reimbursement levels; effects of competition in the markets in which the Company operates; liability and other claims asserted against the Company; ability to attract and retain qualified personnel; availability and terms of capital; loss of significant contracts or reduction in revenues associated with major payer sources; ability of customers to pay for services; business disruption due to natural disasters or terrorist acts; ability to successfully integrate the operations of acquisitions the Company may make and achieve expected synergies and operational efficiencies within expected time-frames; effect on liquidity of the Company's debt service requirements; and changes in estimates and judgments associated with critical accounting policies and estimates. For a detailed discussion of certain of these and other factors that could cause actual results to differ from those contained in this news release, please refer to the Company's various filings with the Securities and Exchange Commission (SEC), including the "Risk Factors" section contained in the Company's annual report on Form 10-K for the year ended December 28, 2008.
Financial and Investor Contact:
John R. Potapchuk
631-501-7035
john.potapchuk@gentiva.com
or Brandon Ballew
770-221-6700
brandon.ballew@gentiva.com
Media Contact:
Scott Cianciulli
Brainerd Communicators
212-986-6667
cianciulli@braincomm.com
SOURCE Gentiva Health Services, Inc. Browse other news from this organisation: Gentiva Health Services, Inc. Source PR Newswire  |
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