Attached files
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8-K - 8-K - 21st Century Oncology Holdings, Inc. | a15-11341_18k.htm |
Exhibit 99.1
21ST CENTURY ONCOLOGY HOLDINGS, INC.
21st Century Oncology Contact: |
Investor Contact: |
Richard Lewis |
The Ruth Group |
SVP, CFO for U.S. Operations |
Nick Laudico |
239-931-7281 |
646-536-7030 |
richard.lewis@21co.com |
nlaudico@theruthgroup.com |
|
|
|
Courtney Dugan |
|
646-536-7024 |
|
cdugan@theruthgroup.com |
21ST CENTURY ONCOLOGY HOLDINGS INC. REPORTS FIRST QUARTER 2015 FINANCIAL RESULTS
First Quarter 2015 Highlights:
· Total pro forma revenues of $278.5 million, a 15.0% year-over-year increase
· Pro forma Adjusted EBITDA of $43.7 million, a 39.4% increase
· 5th consecutive quarter of Pro Forma Adjusted EBITDA margin expansion 15.7% of total pro forma revenues
· Cash generated from operating activities of $22.7 million during quarter
· Same store growth of 3.9% year-over-year, representing the 8th consecutive quarter of growth in same store freestanding treatments per day
· International cases increased 5.1% versus the same period in the prior year
· Key contributions from OnCure Holdings, Inc. (Oncure) and South Florida Radiation Oncology (SFRO)
Recent Developments:
· Completed $1.1 billion refinancing which extended maturities, lowered cash interest expense and via OnCure Holdings Tender Offer, redeemed 99.4% of 11.75% Senior Secured Notes
· Significant and accretive contributions from recent joint venture investments Northwestern Cancer Clinic, LLC (NWCC, Washington) and The Maddock Center (Maddock, Rhode Island)
· Entered into additional affiliations with The University of Florida, UCLA, Jackson South, and Lourdes Health System
FORT MYERS, FL, May 12, 2015 21st Century Oncology Holdings, Inc. (21C or the Company), the leading global, physician-led provider of integrated cancer care (ICC) services, announced today its financial results for the first quarter ended March 31, 2015.
Dr. Daniel Dosoretz, Founder, President and Chief Executive Officer, commented, We are very pleased with our solid start to 2015. Results for the first quarter were strong, reflecting growth from existing operations as well as from contributions from recent acquisitions, both domestic and international. Same store treatment growth was 3.9% and same store freestanding revenue growth was 4.6%, both meeting the high side of guidance provided to investors during our refinancing. Our continued focus on cost savings and synergies resulted in a fifth consecutive quarter of year-over-year Pro Forma Adjusted EBITDA (adjusted earnings before interest, taxes, depreciation, amortization, stock-based compensation and other non-cash and pro forma items) margin expansion. We remain focused on further EBITDA growth, expense management, generating positive free cash flow, and deleveraging.
Dr. Dosoretz continued, On April 30th, we completed a refinancing that restructured 21Cs balance sheet. 21Cs three Notes issuances due in 2017, including the OnCure 11.75% Senior Secured Notes, were refinanced with a $610 million, Term Loan due 2022 and $360 million of 11% Senior Unsecured Notes due 2023. Additionally, we replaced our $100 million unfunded revolving credit facility with a new $125 million unfunded Revolver, thereby providing us with additional liquidity and investment capacity.
Dr. Dosoretz concluded, Our management team continues to capitalize on attractive opportunities to leverage 21Cs ICC model and competitive strengths, completing two notable joint ventures in the quarter NWCC and the purchase of Maddock in Rhode Island. NWCC expanded our footprint into a new region of the Northwest U.S. where we believe our model will be well embraced, and Maddock provided an additional geographically-convenient location for our Rhode Island joint venture. Additionally, during the quarter we entered into new hospital partnerships with the University of Florida, UCLA, Jackson South in Miami, and Lourdes Health System. While each arrangement is unique, these new partnerships result in enhanced treatment options for our patients. The positive results of this quarter, optimism for increasing contributions from our joint venture activity, continued organic growth, strong performance from OnCure and SFRO, and growth from our international operations enables 21C to re-confirm its full year 2015 Total Pro Forma Adjusted EBITDA guidance of between $182 million to $190 million.
First Quarter 2015 Results
Total pro forma revenues for the first quarter of 2015 were $278.5 million, compared to total pro forma revenues of $242.2 million in the same quarter of 2014, driven primarily by same store growth.
Domestic same store treatments per day increased 3.9% in the first quarter of 2015 while same store freestanding revenues increased 4.6%. The growth was primarily driven by the continued expansion of our physician network and strong growth in our key markets. Domestic same store therapy revenue per treatment increased 1.5% in the first quarter of 2015.
Total Relative Value Units (RVUs) per day increased by 13.0% in the first quarter versus the same period of the prior year due to the effect of acquisitions, same store treatment growth and service mix. On a same store basis, RVUs increased 7.7% versus the same period last year as a result of same store growth and service mix. Pro Forma Adjusted EBITDA in the first quarter of 2015 was $43.7 million, or 15.7% of total revenues, up 39.4% compared to $31.3 million, or 12.9% of total pro forma revenues, in the first quarter of 2014. A reconciliation of net loss
attributable to 21C, determined in accordance with generally accepted accounting principles to Pro Forma Adjusted EBITDA and total revenues, determined in accordance with generally accepted accounting principles, to total pro forma revenues for the quarters ended March 31, 2015 and 2014 is included in the attached supplemental financial information.
Income tax expense in the first quarter of 2015 was $2.7 million, compared to an income tax expense of $2.1 million in the first quarter of 2014. The net loss for the first quarter of 2015 was $12.9 million, compared to a net loss of $29.2 million in the first quarter of 2014.
Recent Developments
On January 2, 2015, 21C entered into a joint venture with NWCC, whereby 21C acquired an 80% interest in a radiation oncology practice in the Tri-Cities Market of Washington State, expanding 21Cs geographical footprint into the Northwestern U.S., one of the fastest growing regions in the country. On January 6, 2015, a majority-owned 21C joint venture with hospital partners Charter Care and Care New England acquired Maddock, a single radiation oncology center located in Rhode Island. This acquisition expands 21Cs footprint in the state and provides an additional convenient treatment location for its patients. The NWCC and Maddock acquisitions increased the number of radiation treatment centers by two and increased the number 21C radiation oncology physicians by three.
During the first quarter, 21C entered into new hospital partnerships with the University of Florida, UCLA, Jackson South, and Lourdes Health System.
Financing Developments
On April 30, 2015, 21C closed and funded a $610 million Senior Secured Term Loan (the Term Loan) and $360 million of 11.0% Senior Unsecured Notes due 2023 at an issue price of 100.0% (the Notes and together the Offerings). 21C used the net proceeds from the Offerings, together with cash on hand, to repay its $90.0 million term loan facility due 2016, to redeem its 97/8% Senior Subordinated Notes due 2017, its 87/8% Senior Secured Second Lien Notes due 2017, and to repurchase 99.4% of the OnCure 11¾ Senior Secured Notes due 2017 which were refinanced subject to a tender offer, and to pay related fees and expenses. Simultaneously, 21C replaced its existing $100 million unfunded Revolving Credit Facility with a new $125 million, 5-year unfunded Revolving Credit Facility.
For additional details regarding these financings, please review the Companys 8-K filed May 4, 2015 with the Securities and Exchange Commission.
Conference Call
The Company will host a conference call on Wednesday, May 13, 2015 at 3:00 p.m. Eastern Time, during which management will discuss its financial results in further detail. The dial-in numbers are (877) 407-9039 for domestic callers and (201) 689-8470 for international callers. In addition, a telephonic replay of the call will be available until May 27, 2015. The replay dial-in numbers are (877) 870-5176 for domestic callers and (858) 384-5517 for international callers. Please use the conference ID number 13608002 to access the replay.
A live webcast and webcast replay of the call will also be available from the Events section on the corporate web site at www.21co.com.
About 21st Century Oncology Holdings, Inc.
21st Century Oncology Holdings, Inc. is the largest global, physician led provider of integrated cancer care services. The Company offers a comprehensive range of cancer treatment services, focused on delivering academic quality, cost-effective patient care in personal and convenient settings. As of March 31, 2015, the Company operated 182 treatment centers, including 147 centers located in 17 U.S. states and 35 centers located in six countries in Latin America. (Source: 21st Century Oncology Holdings, Inc.)
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended. Statements preceded by, followed by or that otherwise include the words believes, expects, anticipates, intends, projects, estimates, plans, may increase, forecast and similar expressions or future or conditional verbs such as will, should, would, may and could are generally forward-looking in nature and not historical facts. Forward-looking statements are based on managements current expectations or beliefs about the Companys future plans, expectations and objectives, including, but not limited to, the Companys expected financial results and estimates for 2015 and the effects of the CMSs Final Rule for the 2015 Physician Fee Schedule on its results. These forward-looking statements are not historical facts and are subject to risks and uncertainties that could cause the actual results to differ materially from those projected in these forward-looking statements including, but not limited to reductions in Medicare reimbursement, healthcare reform, decreases in payments by managed care organizations and other commercial payers and other risk factors that may be described from time to time in the Companys filings with the Securities and Exchange Commission. Readers of this release are cautioned not to place undue reliance on forward-looking statements contained herein, which speak only as of the date stated, or if no date is stated, as of the date of this press release. The Company undertakes no obligation to publicly update or revise the forward-looking statements contained herein to reflect changed events or circumstances after the date of this release, unless required by law.
21ST CENTURY ONCOLOGY HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
(unaudited)
|
|
March 31, |
|
December 31, |
| ||
|
|
2015 |
|
2014 |
| ||
|
|
|
|
|
| ||
ASSETS |
|
|
|
|
| ||
Current assets: |
|
|
|
|
| ||
Cash and cash equivalents |
|
$ |
78,184 |
|
$ |
99,167 |
|
Restricted cash |
|
7,865 |
|
7,051 |
| ||
Accounts receivable, net |
|
153,619 |
|
137,807 |
| ||
Prepaid expenses |
|
9,115 |
|
8,728 |
| ||
Inventories |
|
4,355 |
|
4,526 |
| ||
Deferred income taxes |
|
193 |
|
227 |
| ||
Other |
|
7,821 |
|
7,457 |
| ||
Total current assets |
|
261,152 |
|
264,963 |
| ||
|
|
|
|
|
| ||
Equity investments in joint ventures |
|
1,615 |
|
1,646 |
| ||
Property and equipment, net |
|
268,630 |
|
270,757 |
| ||
Real estate subject to finance obligation |
|
10,849 |
|
22,552 |
| ||
Goodwill |
|
492,868 |
|
469,596 |
| ||
Intangible assets, net |
|
81,253 |
|
81,680 |
| ||
Other assets |
|
35,040 |
|
35,530 |
| ||
Total assets |
|
$ |
1,151,407 |
|
$ |
1,146,724 |
|
|
|
|
|
|
| ||
LIABILITIES AND EQUITY |
|
|
|
|
| ||
|
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
| ||
Accounts payable |
|
$ |
65,207 |
|
$ |
57,635 |
|
Accrued expenses |
|
102,308 |
|
82,609 |
| ||
Income taxes payable |
|
3,792 |
|
2,114 |
| ||
Current portion of long-term debt |
|
25,088 |
|
26,350 |
| ||
Current portion of finance obligation |
|
257 |
|
433 |
| ||
Other current liabilities |
|
20,787 |
|
19,687 |
| ||
Total current liabilities |
|
217,439 |
|
188,828 |
| ||
Long-term debt, less current portion |
|
935,664 |
|
940,771 |
| ||
Finance obligation, less current portion |
|
11,490 |
|
23,610 |
| ||
Embedded derivative features of Series A convertible redeemable preferred stock |
|
17,185 |
|
15,843 |
| ||
Other long-term liabilities |
|
53,340 |
|
51,079 |
| ||
Deferred income taxes |
|
4,002 |
|
4,480 |
| ||
Total liabilities |
|
1,239,120 |
|
1,224,611 |
| ||
|
|
|
|
|
| ||
Series A convertible redeemable preferred stock, $0.001 par value, $1,000 stated value, 3,500,000 authorized, 385,000 issued and outstanding at March 31, 2015 and December 31, 2014 |
|
353,388 |
|
328,926 |
| ||
Noncontrolling interests - redeemable |
|
55,078 |
|
49,797 |
| ||
|
|
|
|
|
| ||
Commitments and Contingencies |
|
|
|
|
| ||
|
|
|
|
|
| ||
Equity: |
|
|
|
|
| ||
Common stock, $0.01 par value, 1,000,000 shares authorized 1,028 shares issued and outstanding at March 31, 2015 and December 31, 2014 |
|
|
|
|
| ||
Additional paid-in capital |
|
601,162 |
|
626,001 |
| ||
Retained deficit |
|
(1,082,729 |
) |
(1,067,487 |
) | ||
Accumulated other comprehensive loss, net of tax |
|
(40,882 |
) |
(38,690 |
) | ||
Total 21st Century Oncology Holdings, Inc. shareholders deficit |
|
(522,449 |
) |
(480,176 |
) | ||
Noncontrolling interests - nonredeemable |
|
26,270 |
|
23,566 |
| ||
Total deficit |
|
(496,179 |
) |
(456,610 |
) | ||
Total liabilities and equity |
|
$ |
1,151,407 |
|
$ |
1,146,724 |
|
21ST CENTURY ONCOLOGY HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands)
(unaudited)
|
|
Three Months Ended |
| ||||
|
|
March 31, |
| ||||
|
|
2015 |
|
2014 |
| ||
|
|
|
|
|
| ||
Revenues: |
|
|
|
|
| ||
Net patient service revenue |
|
$ |
256,757 |
|
$ |
213,908 |
|
Management fees |
|
15,870 |
|
16,597 |
| ||
Other revenue |
|
5,856 |
|
2,892 |
| ||
Total revenues |
|
278,483 |
|
233,397 |
| ||
|
|
|
|
|
| ||
Expenses: |
|
|
|
|
| ||
Salaries and benefits |
|
146,959 |
|
125,909 |
| ||
Medical supplies |
|
26,291 |
|
21,734 |
| ||
Facility rent expenses |
|
16,875 |
|
15,495 |
| ||
Other operating expenses |
|
14,924 |
|
14,381 |
| ||
General and administrative expenses |
|
28,910 |
|
30,114 |
| ||
Depreciation and amortization |
|
22,569 |
|
20,722 |
| ||
Provision for doubtful accounts |
|
4,468 |
|
4,296 |
| ||
Interest expense, net |
|
25,687 |
|
27,527 |
| ||
Loss on sale leaseback transaction |
|
|
|
135 |
| ||
Fair value adjustment of earn-out liability |
|
460 |
|
199 |
| ||
Fair value adjustment of embedded derivative |
|
1,342 |
|
|
| ||
Loss on foreign currency transactions |
|
242 |
|
28 |
| ||
Gain on foreign currency derivative contracts |
|
|
|
(4 |
) | ||
Total expenses |
|
288,727 |
|
260,536 |
| ||
|
|
|
|
|
| ||
Loss before income taxes |
|
(10,244 |
) |
(27,139 |
) | ||
Income tax expense |
|
2,690 |
|
2,106 |
| ||
|
|
|
|
|
| ||
Net loss |
|
(12,934 |
) |
(29,245 |
) | ||
|
|
|
|
|
| ||
Net income attributable to noncontrolling interests- redeemable and non-redeemable |
|
(2,308 |
) |
(936 |
) | ||
|
|
|
|
|
| ||
Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder |
|
(15,242 |
) |
(30,181 |
) | ||
|
|
|
|
|
| ||
Other comprehensive loss: |
|
|
|
|
| ||
Unrealized loss on foreign currency translation |
|
(2,435 |
) |
(9,856 |
) | ||
|
|
|
|
|
| ||
Comprehensive loss: |
|
(15,369 |
) |
(39,101 |
) | ||
Comprehensive income attributable to noncontrolling interests- redeemable and non-redeemable |
|
(2,065 |
) |
(117 |
) | ||
Comprehensive loss attributable to 21st Century Oncology Holdings, Inc. shareholder |
|
$ |
(17,434 |
) |
$ |
(39,218 |
) |
21ST CENTURY ONCOLOGY HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
|
|
Three Months Ended |
| ||||
|
|
March 31, |
| ||||
|
|
2015 |
|
2014 |
| ||
Cash flows from operating activities |
|
|
|
|
| ||
Net loss |
|
$ |
(12,934 |
) |
$ |
(29,245 |
) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|
|
|
|
| ||
Depreciation |
|
19,324 |
|
16,737 |
| ||
Amortization |
|
3,245 |
|
3,985 |
| ||
Deferred rent expense |
|
219 |
|
(139 |
) | ||
Deferred income taxes |
|
(437 |
) |
44 |
| ||
Stock-based compensation |
|
1 |
|
35 |
| ||
Provision for doubtful accounts |
|
4,468 |
|
4,296 |
| ||
(Gain) loss on the sale/disposal of property and equipment |
|
(324 |
) |
15 |
| ||
Loss on sale leaseback transaction |
|
|
|
135 |
| ||
Loss (gain) on foreign currency transactions |
|
145 |
|
(49 |
) | ||
Gain on foreign currency derivative contracts |
|
|
|
(4 |
) | ||
Fair value adjustment of earn-out liability |
|
460 |
|
199 |
| ||
Fair value adjustment of embedded derivative |
|
1,342 |
|
|
| ||
Amortization of debt discount |
|
446 |
|
572 |
| ||
Amortization of loan costs |
|
1,455 |
|
1,493 |
| ||
Equity interest in net (earnings) loss of joint ventures |
|
(24 |
) |
38 |
| ||
Distribution received from unconsolidated joint ventures |
|
53 |
|
54 |
| ||
Changes in operating assets and liabilities: |
|
|
|
|
| ||
Accounts receivable and other current assets |
|
(22,421 |
) |
(22,621 |
) | ||
Income taxes payable |
|
1,720 |
|
1,402 |
| ||
Inventories |
|
183 |
|
(389 |
) | ||
Prepaid expenses |
|
550 |
|
572 |
| ||
Accounts payable and other current liabilities |
|
4,057 |
|
3,861 |
| ||
Accrued deferred compensation |
|
393 |
|
40 |
| ||
Accrued expenses / other current liabilities |
|
20,818 |
|
18,664 |
| ||
|
|
|
|
|
| ||
Net cash provided by (used in) operating activities |
|
22,739 |
|
(305 |
) | ||
|
|
|
|
|
| ||
Cash flows from investing activities |
|
|
|
|
| ||
Purchase of property and equipment |
|
(12,265 |
) |
(19,063 |
) | ||
Acquisition of medical practices |
|
(25,965 |
) |
(49,319 |
) | ||
Restricted cash associated with medical practice acquisitions |
|
(814 |
) |
(10,312 |
) | ||
Proceeds from the sale of property and equipment |
|
1,103 |
|
73 |
| ||
Loans to employees |
|
(45 |
) |
(294 |
) | ||
Contribution of capital to joint venture entities |
|
|
|
(315 |
) | ||
Purchase of noncontrolling interest - non-redeemable |
|
(1,233 |
) |
|
| ||
Premiums on life insurance policies |
|
(321 |
) |
(5 |
) | ||
Change in other assets and other liabilities |
|
(62 |
) |
208 |
| ||
|
|
|
|
|
| ||
Net cash used in investing activities |
|
(39,602 |
) |
(79,027 |
) | ||
21ST CENTURY ONCOLOGY HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
|
|
Three Months Ended |
| ||||
|
|
March 31, |
| ||||
|
|
2015 |
|
2014 |
| ||
Cash flows from financing activities |
|
|
|
|
| ||
Proceeds from issuance of debt |
|
2,863 |
|
98,059 |
| ||
Principal repayments of debt |
|
(9,902 |
) |
(23,579 |
) | ||
Repayments of finance obligation |
|
(84 |
) |
(61 |
) | ||
Proceeds from issuance of noncontrolling interest |
|
743 |
|
1,250 |
| ||
Proceeds from noncontrolling interest holders - redeemable and non-redeemable |
|
3,230 |
|
229 |
| ||
Cash distributions to noncontrolling interest holders - redeemable and non-redeemable |
|
(964 |
) |
(45 |
) | ||
Payments of costs for equity securities offering |
|
|
|
(698 |
) | ||
Payments of loan costs |
|
|
|
(967 |
) | ||
|
|
|
|
|
| ||
Net cash (used in) provided by financing activities |
|
(4,114 |
) |
74,188 |
| ||
|
|
|
|
|
| ||
Effect of exchange rate changes on cash and cash equivalents |
|
(6 |
) |
(32 |
) | ||
|
|
|
|
|
| ||
Net decrease in cash and cash equivalents |
|
(20,983 |
) |
(5,176 |
) | ||
Cash and cash equivalents, beginning of period |
|
99,167 |
|
17,462 |
| ||
|
|
|
|
|
| ||
Cash and cash equivalents, end of period |
|
$ |
78,184 |
|
$ |
12,286 |
|
|
|
|
|
|
| ||
Supplemental disclosure of noncash investing and financing activities |
|
|
|
|
| ||
Finance obligation related to real estate projects |
|
$ |
3 |
|
$ |
300 |
|
Derecognition of finance obligation related to real estate projects |
|
$ |
12,215 |
|
$ |
4,119 |
|
Capital lease obligations related to the purchase of equipment |
|
$ |
|
|
$ |
4,460 |
|
Medical equipment and service contract component related to the acquisition of medical equipment through accounts payable |
|
$ |
4,586 |
|
$ |
5,935 |
|
Issuance of notes payable relating to the acquisition of medical practices |
|
$ |
|
|
$ |
2,000 |
|
Liability relating to the escrow debt and purchase price of medical practices |
|
$ |
|
|
$ |
11,687 |
|
Capital lease obligations related to the acquisition of medical practices |
|
$ |
|
|
$ |
42,914 |
|
Earn-out accrual related to the acquisition of medical practices |
|
$ |
1,258 |
|
$ |
1,003 |
|
Assumed debt obligations related to the acquisition of medical practices |
|
$ |
290 |
|
$ |
|
|
Amounts payable to sellers in the purchase of a medical practice |
|
$ |
|
|
$ |
390 |
|
Costs incurred for professional fees relating to issuance of equity securities |
|
$ |
|
|
$ |
261 |
|
Accrued dividends on Series A convertible preferred stock |
|
$ |
22,483 |
|
$ |
|
|
Accretion of redemption value on Series A convertible preferred stock |
|
$ |
1,979 |
|
$ |
|
|
Change in additional paid-in capital from sale/purchase interest in subsidiaries |
|
$ |
378 |
|
$ |
|
|
21ST CENTURY ONCOLOGY HOLDINGS, INC.
Supplemental Financial Information (Unaudited)
Reconciliation of Total Pro-forma Revenue and Pro-forma Adjusted EBITDA to Net Loss Attributable
to 21st Century Oncology Holdings, Inc. Shareholder
|
|
Three Months Ended |
| ||||
|
|
March 31, |
| ||||
(in thousands): |
|
2015 |
|
2014 |
| ||
Total revenues |
|
$ |
278,483 |
|
$ |
233,397 |
|
Pro-forma full period effect of acquisitions (a) |
|
|
|
8,819 |
| ||
Total pro-forma revenues |
|
$ |
278,483 |
|
$ |
242,216 |
|
|
|
|
|
|
| ||
Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder |
|
$ |
(15,242 |
) |
$ |
(30,181 |
) |
Income tax expense |
|
2,690 |
|
2,106 |
| ||
Interest expense, net |
|
25,687 |
|
27,527 |
| ||
Depreciation and amortization |
|
22,569 |
|
20,722 |
| ||
Loss on sale leaseback transaction |
|
|
|
135 |
| ||
Fair value adjustment of earn-out liability |
|
460 |
|
199 |
| ||
Fair value adjustment of embedded derivative |
|
1,342 |
|
|
| ||
Gain on foreign currency derivative contracts |
|
|
|
(4 |
) | ||
Net income attributable to noncontrolling interests, net of cash distributions |
|
1,344 |
|
891 |
| ||
Management fees (b) |
|
484 |
|
170 |
| ||
Non-cash expenses (c) |
|
1,065 |
|
723 |
| ||
Sale-lease back adjustments (d) |
|
(449 |
) |
(303 |
) | ||
Acquisition-related costs (e) |
|
1,310 |
|
4,491 |
| ||
Other expenses (f) |
|
483 |
|
1,828 |
| ||
Litigation settlement (g) |
|
1,941 |
|
757 |
| ||
Tradename / rebranding initiative (h) |
|
|
|
342 |
| ||
Expenses associated with idle / closed treatment facilities (i) |
|
|
|
1,201 |
| ||
Pro-forma full period effect of acquisition EBITDA (a) |
|
|
|
742 |
| ||
|
|
|
|
|
| ||
Pro-forma Adjusted EBITDA (1) |
|
$ |
43,684 |
|
$ |
31,346 |
|
|
|
|
|
|
| ||
Pro-forma Adjusted EBITDA as a percentage of total pro-forma revenues |
|
15.7 |
% |
12.9 |
% |
(1) Pro-forma Adjusted EBITDA is defined as income (loss) before interest expense (net of interest income), income taxes, depreciation and amortization, net income attributable to noncontrolling interests, net of cash distributions, gain on the sale of an interest in a joint venture, loss on sale leaseback transaction, early extinguishment of debt, fair value adjustment of earn-out liability, fair value adjustment of embedded derivative, impairment loss, foreign currency derivative contract loss (gain), management fees accrued to our sponsor, non-cash expenses including costs relating to stock compensation, amortization of straight-line rent and amortization of capital expenditures relating to repairs and maintenance, non-cash equipment rent, sale-lease back adjustments, acquisition-related costs, other expenses including loss on sale of assets, severance payments related to termination of employee staff reductions, tail premiums on termed physicians, franchise taxes, costs relating to consulting services on Medicare reimbursement, litigation settlements with physicians, costs associated with tradename and rebranding initiatives, expenses associated with idle / closed radiation therapy treatment facilities and pro-forma full period effect of acquisition EBITDA.
(a) Pro-forma amounts related to adjustments to total revenues and Pro-forma Adjusted EBITDA to reflect the full period effect of our acquisitions and Value Added Services contracts completed during 2015 and 2014. The adjustments reflect the impact to our total revenues and Pro-forma Adjusted EBITDA as if the acquisitions and Value Added Services contracts had occurred at the beginning of the year.
(b) Management fees are fees accrued to our sponsor, Vestar Capital Partners.
(c) Non-cash expenses including costs relating to stock compensation, amortization of straight-line rent, amortization of capital expenditures relating to warranty arrangements amortized to repairs and maintenance and non-cash equipment rent.
(d) Sale-lease back adjustments relates to the adjustment of benefit derived from the classification of operating leases as finance obligations reflecting a reclassification of interest expense and depreciation and amortization expense as rent expense.
(e) Acquisition related costs associated with ASC 805, Business Combinations, including professional fees, corporate development, integration and due diligence costs relating to the acquisition of medical practices.
(f) Other expenses include loss on sale of assets, severance payments related to termination of employee staff reductions, tail premiums paid on terminated physicians, franchise taxes and costs relating to consulting services on Medicare reimbursement.
(g) Litigation settlement relates to costs associated with the termination of physicians and loss contingency reserves related to the Medicare diagnostic testing matter.
(h) Expenses related to the costs associated with the Companys tradename and rebranding initiatives.
(i) Expenses associated with idle / closed radiation therapy treatment facilities.
We believe the Pro-forma Adjusted EBITDA provides useful information about our financial performance to investors, lenders, financial analysts and rating agencies since these groups have historically used EBITDA-related measures in the healthcare industry, along with other measures, to estimate the value of a company, to make informed investment decisions, to evaluate a companys leverage capacity and its ability to meet its debt service requirements. Pro-forma Adjusted EBITDA eliminates the uneven effect of non-cash depreciation of tangibles assets and amortization of intangible assets, much of which results from acquisitions accounted for under the purchase method of accounting. Pro-forma Adjusted EBITDA is also used by us to measure individual performance for incentive compensation purposes and as an analytical indicator for purposes of allocating resources to our operating business and assessing their performance, both internally and relative to our peers, as well as to evaluate the performance of our operating management teams, and for purposes in the calculation of debt covenants and related disclosures.
Pro-forma Adjusted EBITDA is not intended as a substitute for net income (loss) attributable to 21st Century Oncology Holdings, Inc.
shareholder, operating cash flows or other cash flow data determined in accordance with accounting principles generally accepted in the United States. Due to varying methods of calculation, Pro-forma Adjusted EBITDA as presented may not be comparable to similarly titled measures of other companies.
21ST CENTURY ONCOLOGY HOLDINGS, INC.
KEY OPERATING STATISTICS
(unaudited)
|
|
Three Months Ended |
|
|
| ||||
|
|
March 31, |
|
% |
| ||||
United States |
|
2015 |
|
2014 |
|
Change |
| ||
|
|
|
|
|
|
|
| ||
Number of treatment days |
|
63 |
|
63 |
|
|
| ||
|
|
|
|
|
|
|
| ||
Total RVUs - freestanding centers |
|
4,287,889 |
|
3,793,809 |
|
13.0 |
% | ||
|
|
|
|
|
|
|
| ||
RVUs per day - freestanding centers |
|
68,062 |
|
60,219 |
|
13.0 |
% | ||
|
|
|
|
|
|
|
| ||
Percentage change in RVUs per day - freestanding centers - same store basis |
|
7.7 |
% |
0.8 |
% |
|
| ||
|
|
|
|
|
|
|
| ||
Total treatments - freestanding centers |
|
211,086 |
|
191,993 |
|
9.9 |
% | ||
|
|
|
|
|
|
|
| ||
Treatments per day - freestanding centers |
|
3,351 |
|
3,048 |
|
9.9 |
% | ||
|
|
|
|
|
|
|
| ||
Percentage change in revenue per treatment - freestanding centers - same store basis |
|
0.6 |
% |
3.2 |
% |
|
| ||
|
|
|
|
|
|
|
| ||
Percentage change in treatments per day - freestanding centers - same store basis |
|
3.9 |
% |
3.4 |
% |
|
| ||
|
|
|
|
|
|
|
| ||
Percentage change in freestanding revenues - same store basis |
|
4.6 |
% |
6.8 |
% |
|
| ||
|
|
|
|
|
|
|
| ||
Total radiation oncology cases completed * |
|
7,863 |
|
7,629 |
|
3.1 |
% | ||
|
|
|
|
|
|
|
| ||
Revenue per radiation oncology case |
|
$ |
17,862 |
|
$ |
18,258 |
|
|
|
|
|
|
|
|
|
|
| ||
Radiation therapy centers - freestanding (global) |
|
171 |
|
173 |
|
-1.2 |
% | ||
Radiation therapy centers - professional / other (global) |
|
11 |
|
12 |
|
-8.3 |
% | ||
|
|
|
|
|
|
|
| ||
Total radiation therapy centers |
|
182 |
|
185 |
|
-1.6 |
% | ||
|
|
|
|
|
|
|
| ||
Days sales outstanding at quarter end |
|
36 |
|
35 |
|
|
| ||
|
|
|
|
|
|
|
| ||
Net patient service revenue (global) - professional services only (in thousands) |
|
$ |
86,709 |
|
$ |
70,859 |
|
|
|
|
|
|
|
|
|
|
| ||
Net patient service revenue (global) - excluding physician practice expense (in thousands) |
|
$ |
278,261 |
|
$ |
235,547 |
|
|
|
* Total cases completed represents a count of patients that have completed their course of treatment. Total case counts are based on legacy and acquired clinical systems.
|
|
Three Months Ended |
|
|
| ||||
|
|
March 31, |
|
% |
| ||||
International |
|
2015 |
|
2014 |
|
Change |
| ||
|
|
|
|
|
|
|
| ||
Total number of new cases |
|
4,501 |
|
4,281 |
|
5.1 |
% | ||
|
|
|
|
|
|
|
| ||
Revenue per radiation oncology case |
|
$ |
6,509 |
|
$ |
4,946 |
|
|
|