Attached files
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| 8-K - 8-K - APRIA HEALTHCARE GROUP INC | d622699d8k.htm |
Exhibit 99.1
| FOR IMMEDIATE RELEASE | INVESTOR CONTACT: | |
| Peter A. Reynolds | ||
| Principal Financial Officer and Chief Accounting Officer | ||
| 949-639-2000 | ||
Apria Healthcare Group Inc. Announces Third Quarter 2013
Financial Results
LAKE FOREST, California – November 13, 2013 – Apria Healthcare Group Inc. (“Apria” or the “Company”), a quality, cost-efficient provider of home healthcare products and services in the United States, today announced its financial results for the quarter ended September 30, 2013.
2013 Third Quarter Highlights
Net revenues in the three months ended September 30, 2013 were $607.2 million, compared to $608.5 million in the three months ended September 30, 2012, a decrease of $1.3 million or 0.2%. Net revenues for the three months ended September 30, 2013 decreased primarily due to a reduction in Medicare revenue as a result of reduced reimbursement rates as part of the Medicare competitive bidding program starting July 1, 2013 and the budget sequestration, and decreased volume in the respiratory therapy and home medical equipment segment. The decreases were partially offset by increased volume in the home infusion therapy segment and resulted in an increase in segment net revenues of 7.1%.
Adjusted EBITDA before projected cost savings and synergies1 for the three months ended September 30, 2013 was $60.4 million compared to $74.4 million in the three months ended September 30, 2012, a decrease of 18.8%.
Free cash flow for the three months ended September 30, 2013 was $13.0 million compared to $54.4 million in the three months ended September 30, 2012, a decrease of $41.4 million.
Net loss for the three months ended September 30, 2013 was $(15.8) million.
EBITDA for the three months ended September 30, 2013 was $39.7 million.
2013 First Nine Months Highlights
Net revenues in the nine months ended September 30, 2013 were $1,842.6 million, compared to $1,811.9 million in the nine months ended September 30, 2012, an increase of $30.7 million or 1.7%. Net revenues for the nine months ended September 30, 2013 increased primarily due to increased volume in the home infusion therapy segment and resulted in an increase in segment net revenues of 7.6%, partially offset by decreased volume in the respiratory therapy and home medical equipment segment, a decrease in Medicare revenue due to reduced reimbursement rates as part of the Medicare competitive bidding program starting July 1, 2013, and the budget sequestration.
Adjusted EBITDA before projected cost savings and synergies1 for the nine months ended September 30, 2013 was $221.4 million compared to $195.6 million in the nine months ended September 30, 2012, an increase of 13.2%.
| 1 | This press release includes several metrics, including EBITDA, Adjusted EBITDA and Adjusted EBITDA before projected cost savings and synergies that are not calculated in accordance with Generally Accepted Accounting Principles (“GAAP”). See “Definition of Terms and Reconciliation of Non-GAAP Financial Measures” section at the end of this press release for the definitions of EBITDA, Adjusted EBITDA and Adjusted EBITDA before projected cost savings and synergies and their reconciliation to net income (loss). |
1
Free cash flow for the nine months ended September 30, 2013 was $1.2 million compared to $(9.1) million in the nine months ended September 30, 2012, an increase of $10.3 million.
Net loss for the nine months ended September 30, 2013 was $(53.8) million.
EBITDA for the nine months ended September 30, 2013 was $168.8 million.
Certain Credit Statistics
Our net leverage ratio, defined as the ratio of net debt to Adjusted EBITDA, was 3.5x at September 30, 2013.
Conference Call
As previously announced, Apria will hold a conference call to discuss its third quarter 2013 results on November 13, 2013 at 1:00 p.m. (Eastern Standard Time). The conference call can be accessed over the phone by dialing 1-888-536-6116 or, for international callers, by dialing 1-330-871-6050, or through the Investor Relations page of the Company’s website at www.apria.com. The passcode for the call is Apria.
A replay of the conference call will be available two hours after the call and can be accessed by dialing 1-855-859-2056 or, for international callers, by dialing 1-404-537-3406, or through the Investor Relations page of the Company’s website. The passcode for the replay is 64510019. The replay will be available until November 27, 2013.
A financial results presentation will be made available immediately prior to the call on the Investor Relations page of the Company’s website at www.apria.com.
Forward Looking Statements
Statements contained herein that are not historical facts and that reflect the current view of Apria’s management about future events and financial performance are hereby identified as “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Some of these statements can be identified by terms and phrases such as “anticipate,” “believe,” “intend,” “estimate,” “expect,” “continue,” “could,” “should,” “may,” “plan,” “project,” “predict” and similar expressions. The Company cautions that such “forward looking statements,” including without limitation, those relating to the Company’s future business prospects, revenue, working capital, professional liability expense, liquidity, capital needs, interest costs and income, wherever they occur in this or in other statements attributable to the Company, are necessarily estimates reflecting the judgment of the Company’s senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the “forward looking statements.” Factors that could cause our actual results to differ materially from those expressed or implied in such forward looking statements include but are not limited to current or future government regulation of the healthcare industry, government legislative and budget developments, exposure to professional liability lawsuits and governmental agency investigations, the adequacy of insurance coverage and insurance reserves, risks associated with the Company’s reorganization plans, as well as other factors detailed under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition” in the Company’s filings with the Securities and Exchange Commission. The Company’s “forward looking statements” speak only as of the date hereof and the Company disclaims any intent or obligation to update “forward looking statements” herein to reflect changed assumptions, the occurrence of unanticipated events, or changes to future operating results over time.
About Apria Healthcare Group Inc.
Apria provides home respiratory therapy, home infusion therapy and home medical equipment services through approximately 510 locations in the United States. With $2.4 billion in annual revenues, it is one of the nation’s leading home healthcare companies. For more information, visit www.apria.com or www.coramhc.com.
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Apria Healthcare Group Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
| September 30, 2013 | December 31, 2012 | |||||||
| (in thousands, except share data) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS |
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| Cash and cash equivalents |
$ | 18,543 | $ | 27,080 | ||||
| Accounts receivable, less allowance for doubtful accounts of $64,909 and $53,017 at September 30, 2013 and December 31, 2012, respectively |
333,495 | 344,421 | ||||||
| Inventories |
83,930 | 68,075 | ||||||
| Deferred expenses |
3,476 | 3,798 | ||||||
| Prepaid expenses and other current assets |
22,933 | 16,890 | ||||||
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| TOTAL CURRENT ASSETS |
462,377 | 460,264 | ||||||
| PATIENT SERVICE EQUIPMENT, less accumulated depreciation of $198,502 and $185,774 at September 30, 2013 and December 31, 2012, respectively |
198,314 | 186,460 | ||||||
| PROPERTY, EQUIPMENT AND IMPROVEMENTS, NET |
71,433 | 76,823 | ||||||
| GOODWILL |
258,725 | 258,725 | ||||||
| INTANGIBLE ASSETS, NET |
133,223 | 133,781 | ||||||
| DEFERRED DEBT ISSUANCE COSTS, NET |
13,918 | 30,207 | ||||||
| OTHER ASSETS |
36,032 | 26,448 | ||||||
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| TOTAL ASSETS |
$ | 1,174,022 | $ | 1,172,708 | ||||
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| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| CURRENT LIABILITIES |
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| Accounts payable |
$ | 168,695 | $ | 157,530 | ||||
| Accrued payroll and related taxes and benefits |
78,493 | 70,547 | ||||||
| Deferred income taxes |
304 | 986 | ||||||
| Other accrued liabilities |
75,310 | 74,464 | ||||||
| Deferred revenue |
24,626 | 27,785 | ||||||
| Current portion of long-term debt |
31,031 | 25,195 | ||||||
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| TOTAL CURRENT LIABILITIES |
378,459 | 356,507 | ||||||
| LONG-TERM DEBT, net of current portion |
1,037,759 | 1,017,515 | ||||||
| DEFERRED INCOME TAXES |
71,558 | 68,907 | ||||||
| INCOME TAXES PAYABLE AND OTHER NON-CURRENT LIABILITIES |
67,243 | 61,203 | ||||||
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| TOTAL LIABILITIES |
1,555,019 | 1,504,132 | ||||||
| COMMITMENTS AND CONTINGENCIES |
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| STOCKHOLDERS’ DEFICIT |
||||||||
| Common stock, $0.01 par value: 1,000 shares authorized; 100 shares issued at September 30, 2013 and December 31, 2012 |
— | — | ||||||
| Additional paid-in capital |
699,414 | 695,211 | ||||||
| Accumulated deficit |
(1,080,411 | ) | (1,026,635 | ) | ||||
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| TOTAL STOCKHOLDERS’ DEFICIT |
(380,997 | ) | (331,424 | ) | ||||
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| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT |
$ | 1,174,022 | $ | 1,172,708 | ||||
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Apria Healthcare Group Inc.
Condensed Consolidated Statements of Operations
| Three Months Ended September 30, |
Nine Months Ended September 30, |
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| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| (in thousands) | (in thousands) | |||||||||||||||
| Net revenues: |
||||||||||||||||
| Fee for service arrangements |
$ | 561,831 | $ | 562,867 | $ | 1,706,650 | $ | 1,675,930 | ||||||||
| Capitation |
45,366 | 45,606 | 135,925 | 135,928 | ||||||||||||
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| TOTAL NET REVENUES |
607,197 | 608,473 | 1,842,575 | 1,811,858 | ||||||||||||
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| Costs and expenses: |
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| Cost of net revenues: |
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| Product and supply costs |
234,476 | 215,681 | 685,379 | 637,229 | ||||||||||||
| Patient service equipment depreciation |
24,552 | 20,301 | 66,700 | 61,383 | ||||||||||||
| Home respiratory therapy services |
5,636 | 6,650 | 17,024 | 20,957 | ||||||||||||
| Nursing services |
10,856 | 10,422 | 31,115 | 32,354 | ||||||||||||
| Other |
4,115 | 4,200 | 12,959 | 13,194 | ||||||||||||
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| TOTAL COST OF NET REVENUES |
279,635 | 257,254 | 813,177 | 765,117 | ||||||||||||
| Provision for doubtful accounts |
23,933 | 13,495 | 60,160 | 46,143 | ||||||||||||
| Selling, distribution and administrative |
295,431 | 307,131 | 888,035 | 933,390 | ||||||||||||
| Amortization of intangible assets |
186 | 344 | 558 | 1,488 | ||||||||||||
| Non-cash impairment of intangible assets |
— | 280,000 | — | 280,000 | ||||||||||||
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| TOTAL COSTS AND EXPENSES |
599,185 | 858,224 | 1,761,930 | 2,026,138 | ||||||||||||
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| OPERATING INCOME (LOSS) |
8,012 | (249,751 | ) | 80,645 | (214,280 | ) | ||||||||||
| Interest expense |
23,157 | 33,794 | 89,546 | 101,189 | ||||||||||||
| Loss on early retirement of debt |
— | — | 44,221 | — | ||||||||||||
| Interest income and other |
(188 | ) | (311 | ) | (1,341 | ) | (1,082 | ) | ||||||||
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| LOSS BEFORE TAXES |
(14,957 | ) | (283,234 | ) | (51,781 | ) | (314,387 | ) | ||||||||
| Income tax expense |
828 | (107,523 | ) | 1,995 | (106,333 | ) | ||||||||||
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| NET LOSS |
$ | (15,785 | ) | $ | (175,711 | ) | $ | (53,776 | ) | $ | (208,054 | ) | ||||
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Apria Healthcare Group Inc.
Condensed Consolidated Statements of Cash Flows
| Nine Months Ended September 30, |
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| 2013 | 2012 | |||||||
| [(As Restated)] |
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| (Unaudited) | ||||||||
| (in thousands) | ||||||||
| OPERATING ACTIVITIES |
||||||||
| Net loss |
$ | (53,776 | ) | $ | (208,054 | ) | ||
| Items included in net loss not requiring cash: |
||||||||
| Provision for doubtful accounts |
60,160 | 46,143 | ||||||
| Depreciation |
87,558 | 84,935 | ||||||
| Amortization of intangible assets |
558 | 1,488 | ||||||
| Non-cash impairment of intangible assets |
— | 280,000 | ||||||
| Amortization of deferred debt issuance costs |
7,854 | 10,661 | ||||||
| Deferred income taxes |
1,969 | (105,572 | ) | |||||
| Profit interest compensation |
4,203 | 2,465 | ||||||
| Gain on sale of patient service equipment and other |
(12,938 | ) | (19,409 | ) | ||||
| Loss on early retirement of debt |
44,221 | — | ||||||
| Changes in operating assets and liabilities, exclusive of effects of acquisitions: |
||||||||
| Accounts receivable |
(49,235 | ) | (71,642 | ) | ||||
| Inventories |
(15,855 | ) | (8,471 | ) | ||||
| Prepaid expenses and other assets |
(15,628 | ) | 8,587 | |||||
| Accounts payable |
6,893 | 16,325 | ||||||
| Accrued payroll and related taxes and benefits |
7,947 | 7,368 | ||||||
| Income taxes payable |
(181 | ) | (1,677 | ) | ||||
| Deferred revenue, net of related expenses |
(2,837 | ) | 10 | |||||
| Accrued expenses |
7,066 | 34,218 | ||||||
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| NET CASH PROVIDED BY OPERATING ACTIVITIES |
77,979 | 77,375 | ||||||
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| INVESTING ACTIVITIES |
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| Purchases of patient service equipment and property, equipment and improvements, exclusive of effects of acquisitions |
(106,608 | ) | (121,008 | ) | ||||
| Proceeds from sale of patient service equipment and other |
29,791 | 34,544 | ||||||
| Cash paid for acquisitions |
— | (121 | ) | |||||
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| NET CASH USED IN INVESTING ACTIVITIES |
(76,817 | ) | (86,585 | ) | ||||
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| FINANCING ACTIVITIES |
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| Proceeds from ABL Facility |
502,000 | 317,000 | ||||||
| Payments on ABL Facility |
(505,000 | ) | (321,000 | ) | ||||
| Payments on Series A-1 Notes |
(700,000 | ) | — | |||||
| Payments on Series A-2 Notes |
(160,000 | ) | — | |||||
| Proceeds from Senior Secured Term Loan |
900,000 | — | ||||||
| Payments on Term Loan |
(2,250 | ) | — | |||||
| Premium paid on early retirement of Series A-1 and A-2 Notes |
(24,641 | ) | — | |||||
| Debt issuance costs on Senior Secured Term Loan |
(10,628 | ) | — | |||||
| Payment of original issue discount associated with Senior Secured Term Loan |
(9,000 | ) | — | |||||
| Payments on other long-term debt |
(180 | ) | (256 | ) | ||||
| Cash paid on profit interest units |
— | (102 | ) | |||||
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| NET CASH USED IN FINANCING ACTIVITIES |
(9,699 | ) | (4,358 | ) | ||||
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| NET DECREASE IN CASH AND CASH EQUIVALENTS |
(8,537 | ) | (13,568 | ) | ||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
27,080 | 29,096 | ||||||
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| CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ | 18,543 | $ | 15,528 | ||||
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Apria Healthcare Group Inc.
3rd Quarter 2013 Financial Summary
| Three Months Ended September 30, |
$ Variance Fav/(Unfav) |
% Variance Fav/(Unfav) |
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| ($ in millions) | 2013 | 2012 | ||||||||||||||
| Net Revenue |
$ | 607.2 | $ | 608.5 | $ | (1.3 | ) | (0.2 | )% | |||||||
| Gross Profit |
327.6 | 351.2 | (23.6 | ) | (6.7 | )% | ||||||||||
| % Margin |
54.0 | % | 57.7 | % | ||||||||||||
| Provision for Doubtful Accounts |
23.9 | 13.5 | (10.4 | ) | (77.0 | )% | ||||||||||
| % of Net Revenue |
3.9 | % | 2.2 | % | ||||||||||||
| Selling, Distribution and Administrative |
295.4 | 307.1 | 11.7 | 3.8 | % | |||||||||||
| % of Net Revenue |
48.6 | % | 50.5 | % | ||||||||||||
| Non-Cash Impairment of Intangible Assets |
— | 280.0 | 280.0 | 100.0 | % | |||||||||||
| % of Net Revenue |
0.0 | % | 46.0 | % | ||||||||||||
| Net Loss |
(15.8 | ) | (175.7 | )(a) | 159.9 | 91.0 | % | |||||||||
| EBITDA |
39.7 | (221.6 | )(b) | 261.3 | 117.9 | % | ||||||||||
| Adjusted EBITDA Before Projected Cost Savings and Synergies |
60.4 | 74.4 | (14.0 | ) | (18.8 | )% | ||||||||||
| % of Net Revenue |
9.9 | % | 12.2 | % | ||||||||||||
| (a) | Net loss for the three month period ended September 30, 2012 reflects the following non-cash impairment charge based on the results of the Company’s impairment testing as of September 30, 2012 and the tax impact associated with the impairment charge: |
| (i) | Trade name impairment of $280.0 million, $200.0 million of which relates to the home respiratory therapy/home medical equipment reporting unit and $80.0 million of which relates to the home infusion therapy reporting unit; and |
| (ii) | Tax benefit of $104.0 million relating to the intangible assets impairment. |
All of these items resulted in a $176.0 million increase in our net loss in the three months ended September 30, 2012.
| (b) | EBITDA for the three months ended September 30, 2012 includes a $280.0 million non-cash impairment charge described above. |
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Apria Healthcare Group Inc.
3rd Quarter 2013 Financial Summary
| Nine Months Ended September 30, |
$ Variance Fav/(Unfav) |
% Variance Fav/(Unfav) |
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| ($ in millions) | 2013 | 2012 | ||||||||||||||
| Net Revenue |
$ | 1,842.6 | $ | 1,811.9 | $ | 30.7 | 1.7 | % | ||||||||
| Gross Profit |
1,029.4 | 1,046.7 | (17.3 | ) | (1.7 | )% | ||||||||||
| % Margin |
55.9 | % | 57.8 | % | ||||||||||||
| Provision for Doubtful Accounts |
60.2 | 46.1 | (14.1 | ) | (30.6 | )% | ||||||||||
| % of Net Revenue |
3.3 | % | 2.5 | % | ||||||||||||
| Selling, Distribution and Administrative |
888.0 | 933.4 | 45.4 | 4.9 | % | |||||||||||
| % of Net Revenue |
48.2 | % | 51.5 | % | ||||||||||||
| Non-Cash Impairment of Intangible Assets |
— | 280.0 | 280.0 | 100.0 | % | |||||||||||
| % of Net Revenue |
0.0 | % | 15.5 | % | ||||||||||||
| Net Loss |
(53.8 | ) | (208.1 | )(a) | 154.3 | 74.1 | % | |||||||||
| EBITDA |
168.8 | (127.9 | )(b) | 296.7 | 232.0 | % | ||||||||||
| Adjusted EBITDA Before Projected Cost Savings and Synergies |
221.4 | 195.6 | 25.8 | 13.2 | % | |||||||||||
| % of Net Revenue |
12.0 | % | 10.8 | % | ||||||||||||
| (a) | Net loss for the nine month period ended September 30, 2012 reflects the following non-cash impairment charge based on the results of the Company’s impairment testing as of September 30, 2012 and the tax impact associated with the impairment charge: |
| (i) | Trade name impairment of $280.0 million, $200.0 million of which relates to the home respiratory therapy/home medical equipment reporting unit and $80.0 million of which relates to the home infusion therapy reporting unit; and |
| (ii) | Tax benefit of $104.0 million relating to the intangible assets impairment. |
All of these items resulted in a $176.0 million increase in our net loss in the nine months ended September 30, 2012.
| (b) | EBITDA for the nine months ended September 30, 2012 includes a $280.0 million non-cash impairment charge described above. |
7
Segment Revenue Performance
| ($ in millions) | Three Months Ended September 30, |
$ Variance Fav/(Unfav) |
% Variance Fav/(Unfav) |
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| 2013 | 2012 | |||||||||||||||
| Home Respiratory Therapy and Home Medical Equipment |
$ | 278.1 | $ | 301.2 | $ | (23.1 | ) | (7.7 | )% | |||||||
| Home Infusion Therapy |
329.1 | 307.3 | 21.8 | 7.1 | % | |||||||||||
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| Total Net Revenue |
$ | 607.2 | $ | 608.5 | $ | (1.3 | ) | (0.2 | )% | |||||||
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| ($ in millions) | Nine Months Ended September 30, |
$ Variance Fav/(Unfav) |
% Variance Fav/(Unfav) |
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| 2013 | 2012 | |||||||||||||||
| Home Respiratory Therapy and Home Medical Equipment |
$ | 867.3 | $ | 905.5 | $ | (38.2 | ) | (4.2 | )% | |||||||
| Home Infusion Therapy |
975.3 | 906.4 | 68.9 | 7.6 | % | |||||||||||
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| Total Net Revenue |
$ | 1,842.6 | $ | 1,811.9 | $ | 30.7 | 1.7 | % | ||||||||
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Cash and Cash Equivalents, Capitalization & Certain Credit Statistics
The following table indicates the cash and cash equivalents, capitalization and certain credit statistics as of September 30, 2013:
| ($ in millions) | September 30, 2013 |
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| Cash and Cash Equivalents |
$ | 18.5 | ||
| Debt |
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| Asset Based Revolving Credit Facility |
22.0 | |||
| Senior Secured Term Loan |
897.8 | |||
| Series A-2 Notes |
157.5 | |||
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| Total Debt |
$ | 1,077.3 | ||
| Shareholders’ Deficit |
(381.0 | ) | ||
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| Total Capitalization |
$ | 696.3 | ||
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| Net Leverage Ratio Calculations |
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| Net Debt1 |
$ | 1,058.8 | ||
| Adjusted EBITDA2 |
$ | 298.4 | ||
| Net Leverage Ratio3 |
3.5x | |||
| 1 | Net debt is defined as total debt less cash and cash equivalents. This amount does not reflect outstanding letters of credit. |
| 2 | For the twelve months ended September 30, 2013. |
| 3 | Net leverage ratio is defined as the ratio of net debt to Adjusted EBITDA. The net leverage ratio calculated using Adjusted EBITDA before projected cost savings and synergies was 3.6x. |
8
Definition of Terms and Reconciliation of Non-GAAP Financial Measures
This press release includes several metrics which are not calculated in accordance with GAAP, including EBITDA, Adjusted EBITDA, Adjusted EBITDA before projected cost savings and synergies and Free Cash Flow. EBITDA, Adjusted EBITDA, Adjusted EBITDA before projected cost savings and synergies and Free Cash Flow are not recognized terms under GAAP and do not purport to be an alternative to net income as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Additionally, these measures are not intended to be measures of Free Cash Flow available for management’s discretionary use, as they do not consider certain cash requirements such as interest payments, tax payments and debt service requirements. Our presentation of EBITDA, Adjusted EBITDA, Adjusted EBITDA before projected cost savings and synergies and Free Cash Flow may not be comparable to other similarly titled measures of other companies. We believe that such measures provide useful information about our financial condition and covenant compliance under the indenture governing our Series A-2 Notes and the credit agreements governing our ABL Facility and the Senior Secured Term Loan to investors and we compensate for the limitations of using non-GAAP financial measures by presenting them together with GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone.
EBITDA is defined as net income (loss) before interest expense, net, loss on early retirement of debt, income tax expense and depreciation and amortization.
Adjusted EBITDA is defined as net income (loss), plus interest expense, net, loss on early retirement of debt, provision (benefit) for income taxes and depreciation and amortization, further adjusted for certain other non-cash items, costs incurred related to initiatives, cost reduction and other adjustment items that are permitted by the covenants included in the indenture governing our Series A-2 Notes and the credit agreements governing our ABL Facility and the Senior Secured Term Loan.
Adjusted EBITDA before projected cost savings and synergies is defined as Adjusted EBITDA less the projected cost savings and synergies that we expect to realize in connection with cost savings, restructuring and other similar initiatives.
Free Cash Flow is defined as cash provided by operating activities less purchases of patient service equipment and property, equipment and improvements, net of proceeds from the sale of patient service equipment and other, exclusive of effects of acquisitions.
The following tables provide reconciliation of EBITDA, Adjusted EBITDA, Adjusted EBITDA before projected cost savings and synergies and Free Cash Flow for the periods presented to the respective most closely comparable financial measures calculated in accordance with GAAP.
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Reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA before projected cost savings and synergies
| Three Months Ended September 30, |
Nine Months Ended September 30, |
LTM September 30, |
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| (in millions) | 2013 | 2012 | 2013 | 2012 | 2013 | |||||||||||||||
| Net Loss |
$ | (15.8 | ) | $ | (175.7 | ) | $ | (53.8 | ) | $ | (208.1 | ) | $ | (106.1 | ) | |||||
| Interest expense, net |
23.0 | 33.4 | 88.2 | 100.1 | 121.6 | |||||||||||||||
| Loss on early retirement of debt (1) |
— | — | 44.2 | — | 44.2 | |||||||||||||||
| Income tax expense (benefit) |
0.8 | (107.5 | ) | 2.1 | (106.3 | ) | (22.6 | ) | ||||||||||||
| Depreciation and amortization |
31.7 | 28.2 | 88.1 | 86.4 | 115.7 | |||||||||||||||
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| EBITDA |
39.7 | (221.6 | ) | 168.8 | (127.9 | ) | 152.8 | |||||||||||||
| Non-cash impairment of goodwill, intangible and long-lived assets |
— | 280.0 | — | 280.0 | 70.0 | |||||||||||||||
| Non-cash items |
9.6 | 5.0 | 23.5 | 17.4 | 28.9 | |||||||||||||||
| Costs incurred related to Initiatives and non-recurring items |
9.4 | 9.2 | 23.9 | 20.8 | 36.6 | |||||||||||||||
| Other adjustments |
1.7 | 1.8 | 5.2 | 5.3 | 7.0 | |||||||||||||||
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| Adjusted EBITDA Before Projected Cost Savings and Synergies |
$ | 60.4 | $ | 74.4 | $ | 221.4 | $ | 195.6 | 295.3 | |||||||||||
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| Projected cost savings and synergies |
3.1 | |||||||||||||||||||
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| Adjusted EBITDA |
$ | 298.4 | ||||||||||||||||||
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| (1) | Reflects (i) $24.6 million of redemption premiums paid to the holders of the Series A-1 Notes and the portion of the Series A-2 Notes that were redeemed in the nine months ended September 30, 2013 and (ii) $19.6 million of unamortized debt issuance costs related to the Series A-1 Notes and the portion of the Series A-2 Notes that were redeemed in the nine months ended September 30, 2013. |
Reconciliation of Free Cash Flow
| (in millions) | Three Months Ended September 30, 2013 |
Nine Months Ended September 30, 2013 |
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| Net Loss |
$ | (15.8 | ) | $ | (53.8 | ) | ||
| Non-cash items |
57.4 | 193.6 | ||||||
| Change in operating assets and liabilities |
(0.9 | ) | (61.8 | ) | ||||
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| Net cash provided by operating activities |
40.7 | 78.0 | ||||||
| Purchases of patient service equipment, property, equipment and improvements |
(36.2 | ) | (106.6 | ) | ||||
| Proceeds from sale of patient service equipment and other |
8.5 | 29.8 | ||||||
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| Free Cash Flow |
$ | 13.0 | $ | 1.2 | ||||
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