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8-K - FORM 8-K - KINDRED HEALTHCARE, INC | d8k.htm |
Exhibit 99.1
Contact: | Richard A. Lechleiter | |
Executive Vice President and Chief Financial Officer | ||
(502) 596-7734 |
KINDRED HEALTHCARE THIRD QUARTER RESULTS
EXCEED COMPANYS GUIDANCE
Company Reports $0.14 per Diluted Share from Continuing Operations
Compared to Earnings Guidance Range of Breakeven to $0.05
Company Raises 2009 EPS Range to $1.48 to $1.53 from $1.35 to $1.45
Company Provides Fourth Quarter 2009 EPS Guidance Range of $0.30 to $0.35
Company Provides Initial 2010 EPS Guidance Range of $1.20 to $1.35
Management Cites Weakness in 2010 Nursing Center Medicare and Medicaid Rates
LOUISVILLE, Ky. (November 2, 2009) Kindred Healthcare, Inc. (the Company) (NYSE:KND) today announced its operating results for the third quarter ended September 30, 2009.
Third Quarter Highlights:
| Consolidated revenues rose 6% to $1.1 billion |
| Each operating division reported revenue growth compared to last year |
| Diluted earnings per share reported at $0.14 compared to last years $0.05 |
| Hospital operating income grew 21% in the third quarter |
| Both reported and same-store admissions grew 4% compared to last years third quarter |
| Nursing center results were in line with expectations |
| Revenue quality mix improved to 58.1% from 56.6% in the third quarter of 2008 |
| Peoplefirst rehabilitation services reported continued revenue growth and productivity gains |
| Quarterly revenues were up 15% from last years third quarter; operating income grew 47% |
| Financial liquidity strengthened during the quarter |
| Third quarter operating cash flows surged to $53 million from $7 million last year |
| Accounts receivable days outstanding declined to 56.8 from 63.0 at September 30, 2008 |
| Long-term debt, net of excess cash, declined to $220 million at September 30, 2009 compared to $329 million at September 30, 2008 |
Kindred Healthcare Third Quarter Results Exceed Companys Guidance
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November 2, 2009
Continuing Operations
Consolidated revenues for the third quarter ended September 30, 2009 totaled $1.1 billion, an increase of 6% from last years third quarter. Income from continuing operations for the third quarter of 2009 totaled $5.4 million or $0.14 per diluted share compared to $2.1 million or $0.05 per diluted share in the third quarter last year.
As expected, the Company recorded a $1.7 million or $0.04 per diluted share favorable income tax adjustment in the third quarter of 2009. This adjustment was included in the Companys previously issued third quarter earnings guidance.
Operating results for the third quarter of 2008 included certain items that, in the aggregate, reduced net income by $2.3 million or $0.06 per diluted share.
For the nine months ended September 30, 2009, consolidated revenues increased 5% to $3.2 billion compared to the first nine months of 2008. Income from continuing operations totaled $46.3 million or $1.18 per diluted share for the first nine months of 2009 compared to $38.8 million or $0.98 per diluted share in the same period a year ago.
Consolidated operating results for the first nine months of 2008 included certain items that, in the aggregate, increased net income by approximately $1.7 million or $0.04 per diluted share.
Discontinued Operations
During the past several years, the Company has entered into transactions to divest unprofitable businesses. For accounting purposes, the historical operating results of these businesses and gains or losses associated with these operations have been classified as discontinued operations in the Companys consolidated statement of operations for all historical periods.
In the third quarter of 2009, the Company reported breakeven results from discontinued operations compared to a loss of $1.3 million or $0.03 per diluted share in the third quarter of 2008.
For the first nine months of 2009, the Company reported a loss from discontinued operations of $1.5 million or $0.04 per diluted share compared to a loss of $4.4 million or $0.11 per diluted share in the first nine months of 2008.
In the third quarter of 2008, the Company recorded a net loss of $22.1 million or $0.56 per diluted share related to the closure of a hospital. Operating results for the first nine months of 2009 included a loss on the divestiture of discontinued operations totaling $24.0 million or $0.61 per diluted share compared to a net loss of $19.3 million or $0.49 per diluted share for the first nine months of 2008.
Management Commentary
Paul J. Diaz, President and Chief Executive Officer of the Company, remarked, We are pleased to report solid third quarter performance in each of our three operating divisions. Our efforts to improve the quality of our services and better manage costs during the weakest seasonal period of the year led to better overall execution compared to both our expectations and the third quarter last year. Our improved operational focus also has resulted in more consistent overall operating results over the past four quarters.
Kindred Healthcare Third Quarter Results Exceed Companys Guidance
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November 2, 2009
Commenting on the Companys third quarter operations, Mr. Diaz noted, Growth in hospital operating income was driven primarily by 11% growth in non-government admissions and favorable commercial pricing as we continued to demonstrate the value of our hospital services to commercial payors. Our nursing center revenues grew 3% and operating income was in line with our expectations for the quarter. Peoplefirst rehabilitation services continued to achieve solid revenue growth and strong productivity gains that drove operating income growth of 47% compared to the third quarter last year. Furthermore, our focus on cost management across the organization was a significant factor in our third quarter success.
Mr. Diaz further noted, The significant growth in operating cash flows in the first nine months of this year, driven primarily by strong accounts receivable collections, has allowed us to fund our ongoing capital spending programs, our hospital development projects and the development of our transitional care centers and units in selected nursing centers. At the same time, we have reduced our outstanding revolving credit borrowings, net of excess cash, by over $100 million in the last twelve months. Looking forward, we will continue to focus on maximizing cash flows to fund our growth initiatives and reduce our leverage.
Earnings Guidance Continuing Operations
The Company raised its 2009 earnings guidance for continuing operations. The Company expects consolidated revenues for 2009 to approximate $4.3 billion. Operating income, or earnings before interest, income taxes, depreciation, amortization and rent, is expected to range from $577 million to $581 million. Rent expense is expected to approximate $350 million, while depreciation, amortization and net interest expense are expected to approximate $131 million. Income from continuing operations for 2009 is expected to approximate $58 million to $60 million or $1.48 to $1.53 per diluted share (based upon diluted shares of 38.5 million).
The Company also provided its earnings outlook for the fourth quarter of 2009, estimating diluted earnings per share between $0.30 to $0.35 (based upon diluted shares of 38.5 million).
The Company anticipates that routine capital spending for 2009 will approximate $110 million to $115 million and hospital development capital spending should approximate $45 million to $50 million. Management expects that substantially all of these expenditures will be financed through internal sources.
The Company also provided its initial earnings guidance for 2010. Consolidated revenues are expected to approximate $4.5 billion. Operating income is expected to range from $575 million to $583 million. Rent expense is expected to approximate $364 million, while depreciation, amortization and net interest expense are expected to approximate $128 million. Income from continuing operations for 2010 is expected to approximate $48 million to $54 million or $1.20 to $1.35 per diluted share (based upon diluted shares of 39 million).
The Company anticipates that routine capital spending in 2010 will approximate $115 million to $120 million, hospital development capital spending should approximate $45 million to $50 million and nursing center development capital spending on transitional care centers and units should approximate $25 million to $30 million. Management expects that a substantial portion of these expenditures will be financed through internal sources.
The Company indicated that the earnings guidance for 2009 and 2010 reflects the estimated impact of the final rules issued by the Centers for Medicare and Medicaid Services (CMS) on July 31, 2009 related to payment rates for long-term acute care (LTAC) hospitals and nursing centers. The
Kindred Healthcare Third Quarter Results Exceed Companys Guidance
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November 2, 2009
Company also indicated that the earnings guidance does not reflect any material acquisitions or divestitures and does not take into account any other changes in government reimbursements, repurchases of common stock or unusual items.
Mr. Diaz noted, We remain focused on our strategic operating plan, improving our core operations and adding selectively to our asset base in targeted cluster markets. As we have in the past, we will continue to invest in our people, facilities, clinical programs and information systems to differentiate Kindred as a leading provider of post-acute services. However, we are concerned in the near term with weakness in both Medicare and Medicaid rates in our nursing center business. While we are reviewing a number of mitigation strategies for 2010, we do not believe that we can completely offset weaker government reimbursements in this division. We also would remind investors of the uncertainty associated with various federal healthcare reform proposals, ongoing state budget pressures as well as potential transition issues in the fourth quarter next year related to the new RUGs IV requirements for nursing centers.
Webcast of Conference Call
As previously announced, investors and the general public can access a live webcast of the third quarter 2009 conference call through a link on the Companys website at www.kindredhealthcare.com. The conference call will be held November 3, 2009 at 10:00 a.m. Eastern Time.
A telephone replay of the conference call will be available at approximately 1:00 p.m. on November 3 by dialing (719) 457-0820, access code: 5654091. The replay will be available through November 12.
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements regarding the Companys expected future financial position, results of operations, cash flows, financing plans, business strategy, budgets, capital expenditures, competitive positions, growth opportunities, plans and objectives of management and statements containing words such as anticipate, approximate, believe, plan, estimate, expect, project, could, should, will, intend, may and other similar expressions, are forward-looking statements.
Such forward-looking statements are inherently uncertain, and stockholders and other potential investors must recognize that actual results may differ materially from the Companys expectations as a result of a variety of factors, including, without limitation, those discussed below. Such forward-looking statements are based upon managements current expectations and include known and unknown risks, uncertainties and other factors, many of which the Company is unable to predict or control, that may cause the Companys actual results or performance to differ materially from any future results or performance expressed or implied by such forward-looking statements. These statements involve risks, uncertainties and other factors discussed below and detailed from time to time in the Companys filings with the Securities and Exchange Commission.
In addition to the factors set forth above, other factors that may affect the Companys plans or results include, without limitation, (a) changes in the reimbursement rates or the methods or timing of payment from third party payors, including the Medicare and Medicaid programs, changes arising from and related to the Medicare prospective payment system for LTAC hospitals, including potential changes in the Medicare payment rules, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, and changes in Medicare and Medicaid reimbursements for the Companys nursing centers; (b) the
Kindred Healthcare Third Quarter Results Exceed Companys Guidance
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November 2, 2009
effects of healthcare reform, legislative changes and government regulations, interpretation of regulations and changes in the nature and enforcement of regulations governing the healthcare industry; (c) the impact of the Medicare, Medicaid and SCHIP Extension Act of 2007, including the ability of the Companys hospitals to adjust to potential LTAC certification, medical necessity reviews and the three-year moratorium on future hospital development; (d) failure of the Companys facilities to meet applicable licensure and certification requirements; (e) the further consolidation of managed care organizations and other third party payors; (f) the Companys ability to meet its rental and debt service obligations; (g) the Companys ability to operate pursuant to the terms of its debt obligations and its master lease agreements with Ventas, Inc. (NYSE:VTR); (h) the condition of the financial markets, including volatility and deterioration in the equity, capital and credit markets, which could limit the availability and terms of debt and equity financing sources to fund the requirements of the Companys businesses, or which could negatively impact the Companys investment portfolio; (i) national and regional economic, financial, business and political conditions, including their effect on the availability and cost of labor, credit, materials and other services; (j) the Companys ability to control costs, particularly labor and employee benefit costs; (k) increased operating costs due to shortages in qualified nurses, therapists and other healthcare personnel; (l) the Companys ability to attract and retain key executives and other healthcare personnel; (m) the increase in the costs of defending and insuring against alleged professional liability claims and the Companys ability to predict the estimated costs related to such claims, including the impact of differences in actuarial assumptions and estimates compared to eventual outcomes; (n) the Companys ability to successfully reduce (by divestiture of operations or otherwise) its exposure to professional liability claims; (o) the Companys ability to successfully pursue its development activities and successfully integrate new operations, including the realization of anticipated revenues, economies of scale, cost savings and productivity gains associated with such operations; (p) the Companys ability to successfully dispose of unprofitable facilities; (q) events or circumstances which could result in impairment of an asset or other charges; (r) changes in generally accepted accounting principles or practices; and (s) the Companys ability to maintain an effective system of internal control over financial reporting. Many of these factors are beyond the Companys control. The Company cautions investors that any forward-looking statements made by the Company are not guarantees of future performance. The Company disclaims any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments.
As noted above, the Companys earnings guidance includes the financial measure referred to as operating income. The Companys management uses operating income as a meaningful measure of operational performance in addition to other measures. The Company uses operating income to assess the relative performance of its operating divisions as well as the employees that operate these businesses. In addition, the Company believes this measurement is important because securities analysts and investors use this measurement to compare the Companys performance to other companies in the healthcare industry. The Company believes that income from continuing operations is the most comparable measure, in relation to generally accepted accounting principles, to operating income. Readers of the Companys financial information should consider income from continuing operations as an important measure of the Companys financial performance because it provides the most complete measure of its performance. Operating income should be considered in addition to, not as a substitute for, or superior to, financial measures based upon generally accepted accounting principles as an indicator of operating performance. A reconciliation of the estimated operating income to income from continuing operations provided in the Companys earnings guidance is included in this press release.
Kindred Healthcare Third Quarter Results Exceed Companys Guidance
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November 2, 2009
About Kindred Healthcare
Kindred Healthcare, Inc. is a healthcare services company, based in Louisville, Kentucky, with annual revenues of over $4 billion and approximately 54,800 employees in 41 states. At September 30, 2009, Kindred through its subsidiaries provided healthcare services in 654 locations, including 82 long-term acute care hospitals, 222 skilled nursing centers and a contract rehabilitation services business, Peoplefirst rehabilitation services, which served 350 non-affiliated facilities. Ranked first in Fortune magazines 2009 Most Admired Companies Health Care: Medical Facilities category, Kindreds mission is to promote healing, provide hope, preserve dignity and produce value for each patient, resident, family member, customer, employee and shareholder we serve. For more information, go to www.kindredhealthcare.com.
Kindred Healthcare Third Quarter Results Exceed Companys Guidance
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November 2, 2009
KINDRED HEALTHCARE, INC.
Financial Summary
(Unaudited)
(In thousands, except per share amounts)
Three months ended September 30, |
Nine months ended September 30, |
||||||||||||||
2009 | 2008 | 2009 | 2008 | ||||||||||||
Revenues |
$ | 1,057,488 | $ | 997,129 | $ | 3,200,016 | $ | 3,057,645 | |||||||
Income from continuing operations |
$ | 5,388 | $ | 2,119 | $ | 46,267 | $ | 38,806 | |||||||
Discontinued operations, net of income taxes: |
|||||||||||||||
Income (loss) from operations |
13 | (1,321 | ) | (1,465 | ) | (4,369 | ) | ||||||||
Gain (loss) on divestiture of operations |
52 | (22,058 | ) | (23,999 | ) | (19,346 | ) | ||||||||
Net income (loss) |
$ | 5,453 | $ | (21,260 | ) | $ | 20,803 | $ | 15,091 | ||||||
Earnings (loss) per common share: |
|||||||||||||||
Basic: |
|||||||||||||||
Income from continuing operations |
$ | 0.14 | $ | 0.05 | $ | 1.19 | $ | 1.00 | |||||||
Discontinued operations: |
|||||||||||||||
Income (loss) from operations |
| (0.03 | ) | (0.04 | ) | (0.11 | ) | ||||||||
Gain (loss) on divestiture of operations |
| (0.57 | ) | (0.62 | ) | (0.50 | ) | ||||||||
Net income (loss) |
$ | 0.14 | $ | (0.55 | ) | $ | 0.53 | $ | 0.39 | ||||||
Diluted: |
|||||||||||||||
Income from continuing operations |
$ | 0.14 | $ | 0.05 | $ | 1.18 | $ | 0.98 | |||||||
Discontinued operations: |
|||||||||||||||
Income (loss) from operations |
| (0.03 | ) | (0.04 | ) | (0.11 | ) | ||||||||
Gain (loss) on divestiture of operations |
| (0.56 | ) | (0.61 | ) | (0.49 | ) | ||||||||
Net income (loss) |
$ | 0.14 | $ | (0.54 | ) | $ | 0.53 | $ | 0.38 | ||||||
Shares used in computing earnings (loss) per common share: |
|||||||||||||||
Basic |
38,398 | 38,034 | 38,297 | 37,732 | |||||||||||
Diluted |
38,524 | 38,894 | 38,419 | 38,485 |
Kindred Healthcare Third Quarter Results Exceed Companys Guidance
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November 2, 2009
KINDRED HEALTHCARE, INC.
Condensed Consolidated Statement of Operations
(Unaudited)
(In thousands, except per share amounts)
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Revenues |
$ | 1,057,488 | $ | 997,129 | $ | 3,200,016 | $ | 3,057,645 | ||||||||
Salaries, wages and benefits |
629,077 | 597,216 | 1,865,125 | 1,776,872 | ||||||||||||
Supplies |
82,400 | 77,766 | 246,648 | 236,369 | ||||||||||||
Rent |
88,081 | 84,865 | 260,164 | 254,348 | ||||||||||||
Other operating expenses |
221,524 | 207,773 | 663,684 | 645,290 | ||||||||||||
Other income |
(2,870 | ) | (4,313 | ) | (8,565 | ) | (14,197 | ) | ||||||||
Depreciation and amortization |
31,992 | 29,174 | 93,837 | 90,277 | ||||||||||||
Interest expense |
1,741 | 3,710 | 6,448 | 11,538 | ||||||||||||
Investment income |
(746 | ) | (671 | ) | (3,254 | ) | (6,253 | ) | ||||||||
1,051,199 | 995,520 | 3,124,087 | 2,994,244 | |||||||||||||
Income from continuing operations before income taxes |
6,289 | 1,609 | 75,929 | 63,401 | ||||||||||||
Provision (benefit) for income taxes |
901 | (510 | ) | 29,662 | 24,595 | |||||||||||
Income from continuing operations |
5,388 | 2,119 | 46,267 | 38,806 | ||||||||||||
Discontinued operations, net of income taxes: |
||||||||||||||||
Income (loss) from operations |
13 | (1,321 | ) | (1,465 | ) | (4,369 | ) | |||||||||
Gain (loss) on divestiture of operations |
52 | (22,058 | ) | (23,999 | ) | (19,346 | ) | |||||||||
Net income (loss) |
$ | 5,453 | $ | (21,260 | ) | $ | 20,803 | $ | 15,091 | |||||||
Earnings (loss) per common share: |
||||||||||||||||
Basic: |
||||||||||||||||
Income from continuing operations |
$ | 0.14 | $ | 0.05 | $ | 1.19 | $ | 1.00 | ||||||||
Discontinued operations: |
||||||||||||||||
Income (loss) from operations |
| (0.03 | ) | (0.04 | ) | (0.11 | ) | |||||||||
Gain (loss) on divestiture of operations |
| (0.57 | ) | (0.62 | ) | (0.50 | ) | |||||||||
Net income (loss) |
$ | 0.14 | $ | (0.55 | ) | $ | 0.53 | $ | 0.39 | |||||||
Diluted: |
||||||||||||||||
Income from continuing operations |
$ | 0.14 | $ | 0.05 | $ | 1.18 | $ | 0.98 | ||||||||
Discontinued operations: |
||||||||||||||||
Income (loss) from operations |
| (0.03 | ) | (0.04 | ) | (0.11 | ) | |||||||||
Gain (loss) on divestiture of operations |
| (0.56 | ) | (0.61 | ) | (0.49 | ) | |||||||||
Net income (loss) |
$ | 0.14 | $ | (0.54 | ) | $ | 0.53 | $ | 0.38 | |||||||
Shares used in computing earnings (loss) per common share: |
||||||||||||||||
Basic |
38,398 | 38,034 | 38,297 | 37,732 | ||||||||||||
Diluted |
38,524 | 38,894 | 38,419 | 38,485 |
Kindred Healthcare Third Quarter Results Exceed Companys Guidance
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November 2, 2009
KINDRED HEALTHCARE, INC.
Condensed Consolidated Balance Sheet
(Unaudited)
(In thousands, except per share amounts)
September 30, 2009 |
December 31, 2008 |
|||||||
ASSETS | ||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 45,303 | $ | 140,795 | ||||
Cash - restricted |
6,165 | 5,104 | ||||||
Insurance subsidiary investments |
159,830 | 196,983 | ||||||
Accounts receivable less allowance for loss |
665,360 | 611,032 | ||||||
Inventories |
21,863 | 22,325 | ||||||
Deferred tax assets |
52,796 | 58,296 | ||||||
Income taxes |
22,407 | 47,257 | ||||||
Other |
19,303 | 20,843 | ||||||
993,027 | 1,102,635 | |||||||
Property and equipment |
1,491,683 | 1,392,636 | ||||||
Accumulated depreciation |
(742,135 | ) | (656,676 | ) | ||||
749,548 | 735,960 | |||||||
Goodwill |
81,223 | 72,244 | ||||||
Intangible assets less accumulated amortization |
64,712 | 64,367 | ||||||
Assets held for sale |
20,733 | 7,786 | ||||||
Insurance subsidiary investments |
50,890 | 48,610 | ||||||
Deferred tax assets |
110,249 | 100,751 | ||||||
Other |
58,527 | 49,408 | ||||||
$ | 2,128,909 | $ | 2,181,761 | |||||
LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 161,505 | $ | 178,246 | ||||
Salaries, wages and other compensation |
296,611 | 281,542 | ||||||
Due to third party payors |
30,827 | 33,122 | ||||||
Professional liability risks |
47,128 | 55,447 | ||||||
Other accrued liabilities |
85,368 | 76,832 | ||||||
Long-term debt due within one year |
84 | 81 | ||||||
621,523 | 625,270 | |||||||
Long-term debt |
251,070 | 349,433 | ||||||
Professional liability risks |
208,451 | 187,804 | ||||||
Deferred credits and other liabilities |
104,843 | 104,279 | ||||||
Stockholders equity: |
||||||||
Common stock, $0.25 par value; authorized 175,000 shares; issued 39,074 shares - September 30, 2009 and 38,909 shares - December 31, 2008 |
9,769 | 9,727 | ||||||
Capital in excess of par value |
817,947 | 812,141 | ||||||
Accumulated other comprehensive loss |
(2,223 | ) | (3,619 | ) | ||||
Retained earnings |
117,529 | 96,726 | ||||||
943,022 | 914,975 | |||||||
$ | 2,128,909 | $ | 2,181,761 | |||||
Kindred Healthcare Third Quarter Results Exceed Companys Guidance
Page 10
November 2, 2009
KINDRED HEALTHCARE, INC.
Condensed Consolidated Statement of Cash Flows
(Unaudited)
(In thousands)
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Cash flows from operating activities: |
||||||||||||||||
Net income (loss) |
$ | 5,453 | $ | (21,260 | ) | $ | 20,803 | $ | 15,091 | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||||||||||
Depreciation and amortization |
31,992 | 29,595 | 94,511 | 92,269 | ||||||||||||
Amortization of stock-based compensation costs |
2,449 | 2,411 | 7,548 | 9,806 | ||||||||||||
Provision for doubtful accounts |
7,100 | 6,877 | 21,747 | 22,037 | ||||||||||||
Deferred income taxes |
4,286 | 8,226 | (5,221 | ) | (4,921 | ) | ||||||||||
(Gain) loss on divestiture of discontinued operations |
(52 | ) | 22,058 | 23,999 | 19,346 | |||||||||||
Other |
(1,428 | ) | (853 | ) | (1,192 | ) | (1,946 | ) | ||||||||
Change in operating assets and liabilities: |
||||||||||||||||
Accounts receivable |
(11,934 | ) | (41,141 | ) | (76,075 | ) | (125,287 | ) | ||||||||
Inventories and other assets |
(2,194 | ) | (422 | ) | (11,755 | ) | (4,880 | ) | ||||||||
Accounts payable |
3,876 | (2,726 | ) | (6,392 | ) | (13,756 | ) | |||||||||
Income taxes |
(7,727 | ) | (17,796 | ) | 38,374 | 21,188 | ||||||||||
Due to third party payors |
5,413 | 14,998 | (4,340 | ) | 191 | |||||||||||
Other accrued liabilities |
15,580 | 7,262 | 37,841 | 12,251 | ||||||||||||
Net cash provided by operating activities |
52,814 | 7,229 | 139,848 | 41,389 | ||||||||||||
Cash flows from investing activities: |
||||||||||||||||
Purchase of property and equipment |
(33,975 | ) | (47,293 | ) | (112,857 | ) | (112,153 | ) | ||||||||
Acquisitions |
(8,035 | ) | (22,419 | ) | (83,432 | ) | (48,824 | ) | ||||||||
Sale of assets |
14,019 | 745 | 14,019 | 27,984 | ||||||||||||
Purchase of insurance subsidiary investments |
(18,808 | ) | (25,908 | ) | (77,480 | ) | (94,976 | ) | ||||||||
Sale of insurance subsidiary investments |
17,658 | 22,568 | 97,677 | 89,501 | ||||||||||||
Net change in insurance subsidiary cash and cash equivalents |
1,177 | 1,671 | 16,852 | 40,099 | ||||||||||||
Change in other investments |
2 | 2 | 2,002 | 7,002 | ||||||||||||
Other |
(517 | ) | 1,340 | 3,877 | 2,628 | |||||||||||
Net cash used in investing activities |
(28,479 | ) | (69,294 | ) | (139,342 | ) | (88,739 | ) | ||||||||
Cash flows from financing activities: |
||||||||||||||||
Proceeds from borrowings under revolving credit |
295,600 | 391,700 | 952,500 | 1,119,800 | ||||||||||||
Repayment of borrowings under revolving credit |
(319,300 | ) | (328,800 | ) | (1,050,800 | ) | (1,066,500 | ) | ||||||||
Repayment of long-term debt |
(20 | ) | (19 | ) | (60 | ) | (57 | ) | ||||||||
Repayment of capital lease obligation |
| | | (16,268 | ) | |||||||||||
Payment of deferred financing costs |
(177 | ) | (211 | ) | (604 | ) | (390 | ) | ||||||||
Issuance of common stock |
568 | 3,087 | 568 | 8,865 | ||||||||||||
Other |
4,570 | (3,213 | ) | 2,398 | (11,682 | ) | ||||||||||
Net cash provided by (used in) financing activities |
(18,759 | ) | 62,544 | (95,998 | ) | 33,768 | ||||||||||
Change in cash and cash equivalents |
5,576 | 479 | (95,492 | ) | (13,582 | ) | ||||||||||
Cash and cash equivalents at beginning of period |
39,727 | 18,816 | 140,795 | 32,877 | ||||||||||||
Cash and cash equivalents at end of period |
$ | 45,303 | $ | 19,295 | $ | 45,303 | $ | 19,295 | ||||||||
Kindred Healthcare Third Quarter Results Exceed Companys Guidance
Page 11
November 2, 2009
KINDRED HEALTHCARE, INC.
Condensed Consolidated Statement of Operations
(Unaudited)
(In thousands, except per share amounts)
2008 Quarters | 2009 Quarters | |||||||||||||||||||||||||||
First | Second | Third | Fourth | First | Second | Third | ||||||||||||||||||||||
Revenues |
$ | 1,034,475 | $ | 1,026,041 | $ | 997,129 | $ | 1,036,219 | $ | 1,069,474 | $ | 1,073,054 | $ | 1,057,488 | ||||||||||||||
Salaries, wages and benefits |
592,240 | 587,416 | 597,216 | 597,291 | 615,218 | 620,830 | 629,077 | |||||||||||||||||||||
Supplies |
77,834 | 80,769 | 77,766 | 80,780 | 80,336 | 83,912 | 82,400 | |||||||||||||||||||||
Rent |
83,623 | 85,860 | 84,865 | 84,325 | 85,201 | 86,882 | 88,081 | |||||||||||||||||||||
Other operating expenses |
223,973 | 213,544 | 207,773 | 209,093 | 220,405 | 221,755 | 221,524 | |||||||||||||||||||||
Other income |
(4,717 | ) | (5,167 | ) | (4,313 | ) | (3,210 | ) | (2,872 | ) | (2,823 | ) | (2,870 | ) | ||||||||||||||
Depreciation and amortization |
30,558 | 30,545 | 29,174 | 29,745 | 30,490 | 31,355 | 31,992 | |||||||||||||||||||||
Interest expense |
4,921 | 2,907 | 3,710 | 3,835 | 2,478 | 2,229 | 1,741 | |||||||||||||||||||||
Investment income |
(3,247 | ) | (2,335 | ) | (671 | ) | (843 | ) | (1,475 | ) | (1,033 | ) | (746 | ) | ||||||||||||||
1,005,185 | 993,539 | 995,520 | 1,001,016 | 1,029,781 | 1,043,107 | 1,051,199 | ||||||||||||||||||||||
Income from continuing operations before income taxes |
29,290 | 32,502 | 1,609 | 35,203 | 39,693 | 29,947 | 6,289 | |||||||||||||||||||||
Provision (benefit) for income taxes |
12,080 | 13,025 | (510 | ) | 13,549 | 16,352 | 12,409 | 901 | ||||||||||||||||||||
Income from continuing operations |
17,210 | 19,477 | 2,119 | 21,654 | 23,341 | 17,538 | 5,388 | |||||||||||||||||||||
Discontinued operations, net of income taxes: |
||||||||||||||||||||||||||||
Income (loss) from operations |
(2,520 | ) | (528 | ) | (1,321 | ) | 970 | (581 | ) | (897 | ) | 13 | ||||||||||||||||
Gain (loss) on divestiture of operations |
| 2,712 | (22,058 | ) | (1,430 | ) | | (24,051 | ) | 52 | ||||||||||||||||||
Net income (loss) |
$ | 14,690 | $ | 21,661 | $ | (21,260 | ) | $ | 21,194 | $ | 22,760 | $ | (7,410 | ) | $ | 5,453 | ||||||||||||
Earnings (loss) per common share: |
||||||||||||||||||||||||||||
Basic: |
||||||||||||||||||||||||||||
Income from continuing operations |
$ | 0.45 | $ | 0.50 | $ | 0.05 | $ | 0.56 | $ | 0.60 | $ | 0.45 | $ | 0.14 | ||||||||||||||
Discontinued operations: |
||||||||||||||||||||||||||||
Income (loss) from operations |
(0.07 | ) | (0.01 | ) | (0.03 | ) | 0.02 | (0.02 | ) | (0.02 | ) | | ||||||||||||||||
Gain (loss) on divestiture of operations |
| 0.07 | (0.57 | ) | (0.04 | ) | | (0.62 | ) | | ||||||||||||||||||
Net income (loss) |
$ | 0.38 | $ | 0.56 | $ | (0.55 | ) | $ | 0.54 | $ | 0.58 | $ | (0.19 | ) | $ | 0.14 | ||||||||||||
Diluted: |
||||||||||||||||||||||||||||
Income from continuing operations |
$ | 0.44 | $ | 0.49 | $ | 0.05 | $ | 0.55 | $ | 0.60 | $ | 0.45 | $ | 0.14 | ||||||||||||||
Discontinued operations: |
||||||||||||||||||||||||||||
Income (loss) from operations |
(0.06 | ) | (0.01 | ) | (0.03 | ) | 0.03 | (0.02 | ) | (0.02 | ) | | ||||||||||||||||
Gain (loss) on divestiture of operations |
| 0.07 | (0.56 | ) | (0.04 | ) | | (0.62 | ) | | ||||||||||||||||||
Net income (loss) |
$ | 0.38 | $ | 0.55 | $ | (0.54 | ) | $ | 0.54 | $ | 0.58 | $ | (0.19 | ) | $ | 0.14 | ||||||||||||
Shares used in computing earnings (loss) per common share: |
||||||||||||||||||||||||||||
Basic |
37,444 | 37,714 | 38,034 | 38,123 | 38,184 | 38,307 | 38,398 | |||||||||||||||||||||
Diluted |
38,061 | 38,474 | 38,894 | 38,265 | 38,315 | 38,415 | 38,524 |
Kindred Healthcare Third Quarter Results Exceed Companys Guidance
Page 12
November 2, 2009
KINDRED HEALTHCARE, INC.
Condensed Business Segment Data
(Unaudited)
(In thousands)
2008 Quarters | 2009 Quarters | |||||||||||||||||||||||||||
First | Second | Third | Fourth | First | Second | Third | ||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||||||
Hospital division |
$ | 476,167 | $ | 461,064 | $ | 434,774 | $ | 465,317 | $ | 492,509 | $ | 487,145 | $ | 468,069 | ||||||||||||||
Health services division |
519,543 | 525,162 | 521,074 | 527,518 | 529,942 | 537,545 | 539,217 | |||||||||||||||||||||
Rehabilitation division |
104,499 | 106,318 | 106,796 | 109,707 | 117,647 | 120,450 | 122,625 | |||||||||||||||||||||
1,100,209 | 1,092,544 | 1,062,644 | 1,102,542 | 1,140,098 | 1,145,140 | 1,129,911 | ||||||||||||||||||||||
Eliminations |
(65,734 | ) | (66,503 | ) | (65,515 | ) | (66,323 | ) | (70,624 | ) | (72,086 | ) | (72,423 | ) | ||||||||||||||
$ | 1,034,475 | $ | 1,026,041 | $ | 997,129 | $ | 1,036,219 | $ | 1,069,474 | $ | 1,073,054 | $ | 1,057,488 | |||||||||||||||
Income from continuing operations: |
||||||||||||||||||||||||||||
Operating income (loss): |
||||||||||||||||||||||||||||
Hospital division |
$ | 96,802 | $ | 85,886 | $ | 64,818 | $ | 97,861 | $ | 100,899 | $ | 91,027 | $ | 78,674 | ||||||||||||||
Health services division |
73,291 | 87,962 | 79,133 | 81,428 | 75,574 | 79,522 | 73,383 | |||||||||||||||||||||
Rehabilitation division |
11,486 | 10,178 | 7,448 | 8,959 | 15,453 | 13,599 | 10,912 | |||||||||||||||||||||
Corporate: |
||||||||||||||||||||||||||||
Overhead |
(34,931 | ) | (33,200 | ) | (30,937 | ) | (33,951 | ) | (34,087 | ) | (33,586 | ) | (33,843 | ) | ||||||||||||||
Insurance subsidiary |
(1,503 | ) | (1,347 | ) | (1,775 | ) | (2,032 | ) | (1,452 | ) | (1,182 | ) | (1,769 | ) | ||||||||||||||
(36,434 | ) | (34,547 | ) | (32,712 | ) | (35,983 | ) | (35,539 | ) | (34,768 | ) | (35,612 | ) | |||||||||||||||
Operating income |
145,145 | 149,479 | 118,687 | 152,265 | 156,387 | 149,380 | 127,357 | |||||||||||||||||||||
Rent |
(83,623 | ) | (85,860 | ) | (84,865 | ) | (84,325 | ) | (85,201 | ) | (86,882 | ) | (88,081 | ) | ||||||||||||||
Depreciation and amortization |
(30,558 | ) | (30,545 | ) | (29,174 | ) | (29,745 | ) | (30,490 | ) | (31,355 | ) | (31,992 | ) | ||||||||||||||
Interest, net |
(1,674 | ) | (572 | ) | (3,039 | ) | (2,992 | ) | (1,003 | ) | (1,196 | ) | (995 | ) | ||||||||||||||
Income from continuing operations before income taxes |
29,290 | 32,502 | 1,609 | 35,203 | 39,693 | 29,947 | 6,289 | |||||||||||||||||||||
Provision (benefit) for income taxes |
12,080 | 13,025 | (510 | ) | 13,549 | 16,352 | 12,409 | 901 | ||||||||||||||||||||
$ | 17,210 | $ | 19,477 | $ | 2,119 | $ | 21,654 | $ | 23,341 | $ | 17,538 | $ | 5,388 | |||||||||||||||
Kindred Healthcare Third Quarter Results Exceed Companys Guidance
Page 13
November 2, 2009
KINDRED HEALTHCARE, INC.
Condensed Business Segment Data (Continued)
(Unaudited)
(In thousands)
2008 Quarters | 2009 Quarters | ||||||||||||||||||||
First | Second | Third | Fourth | First | Second | Third | |||||||||||||||
Rent: |
|||||||||||||||||||||
Hospital division |
$ | 35,907 | $ | 37,750 | $ | 36,461 | $ | 36,198 | $ | 36,445 | $ | 36,834 | $ | 37,062 | |||||||
Health services division |
46,326 | 46,611 | 46,972 | 46,703 | 47,274 | 48,565 | 49,471 | ||||||||||||||
Rehabilitation division |
1,358 | 1,393 | 1,405 | 1,399 | 1,451 | 1,459 | 1,495 | ||||||||||||||
Corporate |
32 | 106 | 27 | 25 | 31 | 24 | 53 | ||||||||||||||
$ | 83,623 | $ | 85,860 | $ | 84,865 | $ | 84,325 | $ | 85,201 | $ | 86,882 | $ | 88,081 | ||||||||
Depreciation and amortization: |
|||||||||||||||||||||
Hospital division |
$ | 11,303 | $ | 11,455 | $ | 11,719 | $ | 13,673 | $ | 12,512 | $ | 13,018 | $ | 13,275 | |||||||
Health services division |
13,892 | 13,292 | 11,536 | 9,925 | 11,685 | 12,038 | 12,408 | ||||||||||||||
Rehabilitation division |
387 | 485 | 547 | 546 | 547 | 549 | 584 | ||||||||||||||
Corporate |
4,976 | 5,313 | 5,372 | 5,601 | 5,746 | 5,750 | 5,725 | ||||||||||||||
$ | 30,558 | $ | 30,545 | $ | 29,174 | $ | 29,745 | $ | 30,490 | $ | 31,355 | $ | 31,992 | ||||||||
Capital expenditures, excluding acquisitions (including discontinued operations): |
|||||||||||||||||||||
Hospital division |
$ | 13,556 | $ | 20,022 | $ | 19,736 | $ | 15,903 | $ | 14,330 | $ | 17,730 | $ | 21,110 | |||||||
Health services division |
7,135 | 10,744 | 19,746 | 12,468 | 21,840 | 11,946 | 6,371 | ||||||||||||||
Rehabilitation division |
282 | 280 | 271 | 329 | 190 | 172 | 269 | ||||||||||||||
Corporate: |
|||||||||||||||||||||
Information systems |
3,832 | 8,616 | 7,051 | 6,864 | 3,453 | 8,838 | 6,152 | ||||||||||||||
Other |
135 | 258 | 489 | 960 | 173 | 210 | 73 | ||||||||||||||
$ | 24,940 | $ | 39,920 | $ | 47,293 | $ | 36,524 | $ | 39,986 | $ | 38,896 | $ | 33,975 | ||||||||
Kindred Healthcare Third Quarter Results Exceed Companys Guidance
Page 14
November 2, 2009
KINDRED HEALTHCARE, INC.
Condensed Business Segment Data (Continued)
(Unaudited)
2008 Quarters | 2009 Quarters | ||||||||||||||||||||
First | Second | Third | Fourth | First | Second | Third | |||||||||||||||
Hospital data: |
|||||||||||||||||||||
End of period data: |
|||||||||||||||||||||
Number of hospitals |
81 | 81 | 82 | 82 | 82 | 82 | 82 | ||||||||||||||
Number of licensed beds |
6,358 | 6,358 | 6,428 | 6,482 | 6,520 | 6,520 | 6,520 | ||||||||||||||
Revenue mix %: |
|||||||||||||||||||||
Medicare |
57 | 56 | 54 | 55 | 56 | 55 | 55 | ||||||||||||||
Medicaid |
9 | 9 | 11 | 11 | 10 | 10 | 11 | ||||||||||||||
Medicare Advantage |
8 | 9 | 9 | 10 | 10 | 11 | 9 | ||||||||||||||
Commercial insurance and other |
26 | 26 | 26 | 24 | 24 | 24 | 25 | ||||||||||||||
Admissions: |
|||||||||||||||||||||
Medicare |
7,920 | 7,268 | 6,786 | 7,054 | 7,421 | 7,117 | 6,875 | ||||||||||||||
Medicaid |
1,034 | 1,008 | 1,148 | 1,043 | 1,052 | 1,053 | 1,165 | ||||||||||||||
Medicare Advantage |
901 | 849 | 869 | 968 | 1,094 | 1,091 | 926 | ||||||||||||||
Commercial insurance and other |
1,814 | 1,799 | 1,748 | 1,727 | 1,921 | 1,869 | 1,969 | ||||||||||||||
11,669 | 10,924 | 10,551 | 10,792 | 11,488 | 11,130 | 10,935 | |||||||||||||||
Admissions mix %: |
|||||||||||||||||||||
Medicare |
68 | 67 | 64 | 65 | 65 | 64 | 63 | ||||||||||||||
Medicaid |
9 | 9 | 11 | 10 | 9 | 9 | 11 | ||||||||||||||
Medicare Advantage |
8 | 8 | 8 | 9 | 9 | 10 | 8 | ||||||||||||||
Commercial insurance and other |
15 | 16 | 17 | 16 | 17 | 17 | 18 | ||||||||||||||
Patient days: |
|||||||||||||||||||||
Medicare |
216,737 | 210,064 | 188,832 | 190,794 | 197,377 | 197,203 | 188,712 | ||||||||||||||
Medicaid |
50,335 | 50,676 | 54,108 | 53,304 | 50,868 | 50,485 | 53,585 | ||||||||||||||
Medicare Advantage |
28,453 | 29,219 | 28,529 | 31,744 | 35,229 | 36,806 | 29,912 | ||||||||||||||
Commercial insurance and other |
66,270 | 67,847 | 64,449 | 63,688 | 65,509 | 61,960 | 65,717 | ||||||||||||||
361,795 | 357,806 | 335,918 | 339,530 | 348,983 | 346,454 | 337,926 | |||||||||||||||
Average length of stay: |
|||||||||||||||||||||
Medicare |
27.4 | 28.9 | 27.8 | 27.0 | 26.6 | 27.7 | 27.4 | ||||||||||||||
Medicaid |
48.7 | 50.3 | 47.1 | 51.1 | 48.4 | 47.9 | 46.0 | ||||||||||||||
Medicare Advantage |
31.6 | 34.4 | 32.8 | 32.8 | 32.2 | 33.7 | 32.3 | ||||||||||||||
Commercial insurance and other |
36.5 | 37.7 | 36.9 | 36.9 | 34.1 | 33.2 | 33.4 | ||||||||||||||
Weighted average |
31.0 | 32.8 | 31.8 | 31.5 | 30.4 | 31.1 | 30.9 | ||||||||||||||
Revenues per admission: |
|||||||||||||||||||||
Medicare |
$ | 34,128 | $ | 35,717 | $ | 34,721 | $ | 36,029 | $ | 37,262 | $ | 37,748 | $ | 37,105 | |||||||
Medicaid |
41,853 | 42,271 | 40,798 | 50,577 | 45,160 | 45,759 | 43,640 | ||||||||||||||
Medicare Advantage |
42,167 | 46,448 | 45,679 | 46,305 | 46,387 | 46,950 | 47,597 | ||||||||||||||
Commercial insurance and other |
68,691 | 66,385 | 64,431 | 65,774 | 61,286 | 63,716 | 59,957 | ||||||||||||||
Weighted average |
40,806 | 42,206 | 41,207 | 43,117 | 42,872 | 43,769 | 42,805 | ||||||||||||||
Revenues per patient day: |
|||||||||||||||||||||
Medicare |
$ | 1,247 | $ | 1,236 | $ | 1,248 | $ | 1,332 | $ | 1,401 | $ | 1,362 | $ | 1,352 | |||||||
Medicaid |
860 | 841 | 866 | 990 | 934 | 954 | 949 | ||||||||||||||
Medicare Advantage |
1,335 | 1,350 | 1,391 | 1,412 | 1,440 | 1,392 | 1,473 | ||||||||||||||
Commercial insurance and other |
1,880 | 1,760 | 1,748 | 1,784 | 1,797 | 1,922 | 1,796 | ||||||||||||||
Weighted average |
1,316 | 1,289 | 1,294 | 1,370 | 1,411 | 1,406 | 1,385 | ||||||||||||||
Medicare case mix index (discharged patients only) |
1.12 | 1.16 | 1.14 | 1.17 | 1.22 | 1.23 | 1.19 | ||||||||||||||
Average daily census |
3,976 | 3,932 | 3,651 | 3,691 | 3,878 | 3,807 | 3,673 | ||||||||||||||
Occupancy % |
67.9 | 67.1 | 62.2 | 62.1 | 66.0 | 64.7 | 63.6 | ||||||||||||||
Annualized employee turnover % |
25.0 | 25.9 | 25.7 | 25.2 | 21.3 | 22.1 | 22.8 |
Kindred Healthcare Third Quarter Results Exceed Companys Guidance
Page 15
November 2, 2009
KINDRED HEALTHCARE, INC.
Condensed Business Segment Data (Continued)
(Unaudited)
2008 Quarters | 2009 Quarters | ||||||||||||||||||||
First | Second | Third | Fourth | First | Second | Third | |||||||||||||||
Nursing center data: |
|||||||||||||||||||||
End of period data: |
|||||||||||||||||||||
Number of nursing centers: |
|||||||||||||||||||||
Owned or leased |
218 | 218 | 218 | 218 | 218 | 218 | 218 | ||||||||||||||
Managed |
4 | 4 | 4 | 4 | 4 | 4 | 4 | ||||||||||||||
222 | 222 | 222 | 222 | 222 | 222 | 222 | |||||||||||||||
Number of licensed beds: |
|||||||||||||||||||||
Owned or leased |
27,569 | 27,449 | 27,422 | 27,252 | 27,138 | 27,138 | 27,086 | ||||||||||||||
Managed |
485 | 485 | 485 | 485 | 485 | 485 | 485 | ||||||||||||||
28,054 | 27,934 | 27,907 | 27,737 | 27,623 | 27,623 | 27,571 | |||||||||||||||
Revenue mix %: |
|||||||||||||||||||||
Medicare |
35 | 35 | 33 | 34 | 35 | 35 | 34 | ||||||||||||||
Medicaid |
42 | 43 | 43 | 43 | 41 | 41 | 42 | ||||||||||||||
Medicare Advantage |
5 | 5 | 5 | 5 | 6 | 6 | 6 | ||||||||||||||
Private and other |
18 | 17 | 19 | 18 | 18 | 18 | 18 | ||||||||||||||
Patient days (excludes managed facilities): |
|||||||||||||||||||||
Medicare |
401,468 | 394,520 | 365,125 | 361,977 | 374,853 | 375,140 | 360,009 | ||||||||||||||
Medicaid |
1,356,401 | 1,347,763 | 1,387,819 | 1,374,670 | 1,326,654 | 1,323,157 | 1,357,596 | ||||||||||||||
Medicare Advantage |
64,929 | 68,850 | 69,655 | 69,083 | 80,352 | 82,652 | 84,322 | ||||||||||||||
Private and other |
413,510 | 406,564 | 419,071 | 420,193 | 403,320 | 415,510 | 415,467 | ||||||||||||||
2,236,308 | 2,217,697 | 2,241,670 | 2,225,923 | 2,185,179 | 2,196,459 | 2,217,394 | |||||||||||||||
Patient day mix %: |
|||||||||||||||||||||
Medicare |
18 | 18 | 16 | 16 | 17 | 17 | 16 | ||||||||||||||
Medicaid |
61 | 61 | 62 | 62 | 61 | 60 | 61 | ||||||||||||||
Medicare Advantage |
3 | 3 | 3 | 3 | 4 | 4 | 4 | ||||||||||||||
Private and other |
18 | 18 | 19 | 19 | 18 | 19 | 19 | ||||||||||||||
Revenues per patient day: |
|||||||||||||||||||||
Medicare Part A |
$ | 428 | $ | 430 | $ | 433 | $ | 455 | $ | 457 | $ | 459 | $ | 464 | |||||||
Total Medicare (including Part B) |
461 | 465 | 474 | 497 | 497 | 500 | 508 | ||||||||||||||
Medicaid |
159 | 166 | 163 | 163 | 165 | 167 | 166 | ||||||||||||||
Medicare Advantage |
369 | 373 | 370 | 381 | 380 | 392 | 398 | ||||||||||||||
Private and other |
229 | 227 | 230 | 231 | 235 | 232 | 234 | ||||||||||||||
Weighted average |
232 | 237 | 232 | 237 | 243 | 245 | 243 | ||||||||||||||
Average daily census |
24,575 | 24,370 | 24,366 | 24,195 | 24,280 | 24,137 | 24,102 | ||||||||||||||
Admissions |
18,215 | 17,634 | 16,903 | 17,234 | 18,166 | 18,456 | 17,803 | ||||||||||||||
Occupancy % |
89.3 | 89.1 | 89.2 | 88.9 | 89.3 | 88.9 | 88.9 | ||||||||||||||
Medicare average length of stay |
35.2 | 35.7 | 36.5 | 34.8 | 34.8 | 35.5 | 36.3 | ||||||||||||||
Annualized employee turnover % |
48.2 | 50.2 | 51.0 | 48.9 | 37.9 | 39.9 | 40.2 | ||||||||||||||
Rehabilitation data: |
|||||||||||||||||||||
Revenue mix %: |
|||||||||||||||||||||
Company-operated |
65 | 64 | 62 | 61 | 61 | 60 | 59 | ||||||||||||||
Non-affiliated |
35 | 36 | 38 | 39 | 39 | 40 | 41 | ||||||||||||||
Sites of service (at end of period) |
650 | 658 | 659 | 655 | 661 | 659 | 660 | ||||||||||||||
Revenue per site |
$ | 160,767 | $ | 161,578 | $ | 162,058 | $ | 167,492 | $ | 177,984 | $ | 182,775 | $ | 185,797 | |||||||
Therapist productivity % |
81.9 | 81.3 | 80.1 | 82.3 | 84.8 | 84.8 | 83.5 | ||||||||||||||
Annualized employee turnover % |
13.1 | 13.5 | 13.2 | 13.3 | 10.9 | 11.6 | 13.1 |
Kindred Healthcare Third Quarter Results Exceed Companys Guidance
Page 16
November 2, 2009
KINDRED HEALTHCARE, INC.
Earnings (Loss) Per Common Share Reconciliation (a)
(Unaudited)
(In thousands, except per share amounts)
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||||||||||||||||||
Basic | Diluted | Basic | Diluted | Basic | Diluted | Basic | Diluted | |||||||||||||||||||||||||
Earnings (loss): |
||||||||||||||||||||||||||||||||
Income from continuing operations: |
||||||||||||||||||||||||||||||||
As reported in Statement of Operations |
$ | 5,388 | $ | 5,388 | $ | 2,119 | $ | 2,119 | $ | 46,267 | $ | 46,267 | $ | 38,806 | $ | 38,806 | ||||||||||||||||
Allocation to participating unvested restricted stockholders |
(90 | ) | (90 | ) | (46 | ) | (45 | ) | (833 | ) | (830 | ) | (915 | ) | (897 | ) | ||||||||||||||||
Available to common stockholders |
$ | 5,298 | $ | 5,298 | $ | 2,073 | $ | 2,074 | $ | 45,434 | $ | 45,437 | $ | 37,891 | $ | 37,909 | ||||||||||||||||
Discontinued operations, net of income taxes: |
||||||||||||||||||||||||||||||||
Income (loss) from operations: |
||||||||||||||||||||||||||||||||
As reported in Statement of Operations |
$ | 13 | $ | 13 | $ | (1,321 | ) | $ | (1,321 | ) | $ | (1,465 | ) | $ | (1,465 | ) | $ | (4,369 | ) | $ | (4,369 | ) | ||||||||||
Allocation to participating unvested restricted stockholders |
| | 29 | 28 | 26 | 26 | 103 | 101 | ||||||||||||||||||||||||
Available to common stockholders |
$ | 13 | $ | 13 | $ | (1,292 | ) | $ | (1,293 | ) | $ | (1,439 | ) | $ | (1,439 | ) | $ | (4,266 | ) | $ | (4,268 | ) | ||||||||||
Gain (loss) on divestiture of operations: |
||||||||||||||||||||||||||||||||
As reported in Statement of Operations |
$ | 52 | $ | 52 | $ | (22,058 | ) | $ | (22,058 | ) | $ | (23,999 | ) | $ | (23,999 | ) | $ | (19,346 | ) | $ | (19,346 | ) | ||||||||||
Allocation to participating unvested restricted stockholders |
(1 | ) | (1 | ) | 475 | 465 | 432 | 431 | 456 | 447 | ||||||||||||||||||||||
Available to common stockholders |
$ | 51 | $ | 51 | $ | (21,583 | ) | $ | (21,593 | ) | $ | (23,567 | ) | $ | (23,568 | ) | $ | (18,890 | ) | $ | (18,899 | ) | ||||||||||
Net income (loss): |
||||||||||||||||||||||||||||||||
As reported in Statement of Operations |
$ | 5,453 | $ | 5,453 | $ | (21,260 | ) | $ | (21,260 | ) | $ | 20,803 | $ | 20,803 | $ | 15,091 | $ | 15,091 | ||||||||||||||
Allocation to participating unvested restricted stockholders |
(91 | ) | (91 | ) | 458 | 448 | (375 | ) | (373 | ) | (356 | ) | (349 | ) | ||||||||||||||||||
Available to common stockholders |
$ | 5,362 | $ | 5,362 | $ | (20,802 | ) | $ | (20,812 | ) | $ | 20,428 | $ | 20,430 | $ | 14,735 | $ | 14,742 | ||||||||||||||
Shares used in the computation: |
||||||||||||||||||||||||||||||||
Weighted average shares outstanding - basic computation |
38,398 | 38,398 | 38,034 | 38,034 | 38,297 | 38,297 | 37,732 | 37,732 | ||||||||||||||||||||||||
Dilutive effect of employee stock options |
126 | 860 | 122 | 753 | ||||||||||||||||||||||||||||
Adjusted weighted average shares outstanding - diluted computation |
38,524 | 38,894 | 38,419 | 38,485 | ||||||||||||||||||||||||||||
Earnings (loss) per common share: |
||||||||||||||||||||||||||||||||
Income from continuing operations |
$ | 0.14 | $ | 0.14 | $ | 0.05 | $ | 0.05 | $ | 1.19 | $ | 1.18 | $ | 1.00 | $ | 0.98 | ||||||||||||||||
Discontinued operations: |
||||||||||||||||||||||||||||||||
Income (loss) from operations |
| | (0.03 | ) | (0.03 | ) | (0.04 | ) | (0.04 | ) | (0.11 | ) | (0.11 | ) | ||||||||||||||||||
Gain (loss) on divestiture of operations |
| | (0.57 | ) | (0.56 | ) | (0.62 | ) | (0.61 | ) | (0.50 | ) | (0.49 | ) | ||||||||||||||||||
Net income (loss) |
$ | 0.14 | $ | 0.14 | $ | (0.55 | ) | $ | (0.54 | ) | $ | 0.53 | $ | 0.53 | $ | 0.39 | $ | 0.38 | ||||||||||||||
(a) | Earnings (loss) per common share are based upon the weighted average number of common shares outstanding during the respective periods. The diluted calculation of earnings (loss) per common share includes the dilutive effect of stock options. On January 1, 2009, the Company adopted the provisions of the authoritative guidance for determining whether instruments granted in share-based payment transactions are participating securities, which requires that certain unvested restricted stock be included as a participating security in the basic and diluted earnings (loss) per common share calculation pursuant to the two-class method. |
Kindred Healthcare Third Quarter Results Exceed Companys Guidance
Page 17
November 2, 2009
KINDRED HEALTHCARE, INC.
Reconciliation of Earnings Guidance for 2009 and 2010 - Continuing Operations
(Unaudited)
(In millions, except per share amounts)
Earnings Guidance Ranges (a) | ||||||||||||||||||
2009 | 2010 | |||||||||||||||||
As of November 2, 2009 | As of August 4, 2009 | As of November 2, 2009 | ||||||||||||||||
Low | High | Low | High | Low | High | |||||||||||||
Operating income |
$ | 577 | $ | 581 | $ | 578 | $ | 584 | $ | 575 | $ | 583 | ||||||
Rent |
350 | 350 | 353 | 353 | 364 | 364 | ||||||||||||
Depreciation and amortization |
126 | 126 | 126 | 126 | 123 | 123 | ||||||||||||
Interest, net |
5 | 5 | 8 | 8 | 5 | 5 | ||||||||||||
Income from continuing operations before income taxes |
96 | 100 | 91 | 97 | 83 | 91 | ||||||||||||
Provision for income taxes |
38 | 40 | 37 | 40 | 35 | 37 | ||||||||||||
Income from continuing operations |
58 | 60 | 54 | 57 | 48 | 54 | ||||||||||||
Allocation to participating unvested restricted stockholders |
1 | 1 | 1 | 1 | 1 | 1 | ||||||||||||
Available to common stockholders |
$ | 57 | $ | 59 | $ | 53 | $ | 56 | $ | 47 | $ | 53 | ||||||
Earnings per diluted share |
$ | 1.48 | $ | 1.53 | $ | 1.35 | $ | 1.45 | $ | 1.20 | $ | 1.35 | ||||||
Shares used in computing earnings per diluted share |
38.5 | 38.5 | 39.0 | 39.0 | 39.0 | 39.0 |
(a) | The Company indicated that the earnings guidance for continuing operations reflects the estimated impact of the final rules issued by CMS on July 31, 2009 related to payment rates for LTAC hospitals and nursing centers. |
The Company also indicated that the earnings guidance does not reflect any material acquisitions or divestitures and does not take into account any other changes in government reimbursements, repurchases of common stock or unusual items.