Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - KINDRED HEALTHCARE, INC | d385298d8k.htm |
EXHIBIT 99.1
| Contact: | Todd Flowers | |
| Investor Relations | ||
| (502) 596-6569 |
KINDRED HEALTHCARE REPORTS FIRST QUARTER 2017 RESULTS
Consolidated Revenues of $1.77 Billion, GAAP Income from Continuing Operations of $9 Million(1), GAAP Diluted Loss Per Share from Continuing Operations of $0.07(1) and EBITDAR of $202 Million(2) in the First Quarter
Core EBITDAR of $218 Million(3) and Core Diluted EPS from Continuing Operations of $0.04(3) in the First Quarter, including $0.03 EPS negative impact from 2017 Change in GAAP(4)
Solid Start to Year - Company Reaffirms Full Year Outlook for 2017 and 2018
LOUISVILLE, Ky. (May 3, 2017) – Kindred Healthcare, Inc. (“Kindred” or the “Company”) (NYSE:KND) today announced its operating results for the first quarter ended March 31, 2017.
Benjamin A. Breier, President and Chief Executive Officer of the Company, commented, “We are pleased to report progress in the first quarter of 2017, as evidenced by strong growth in our home health, hospice and inpatient rehabilitation businesses and continued advancement by our Hospital Division in its second full quarter under long-term acute care (“LTAC”) patient criteria. Furthermore, we are reaffirming our expectations for 2017 and 2018.”
Mr. Breier continued, “In the first quarter, we delivered very encouraging sequential and year-over-year improvement in our Kindred at Home Division, with strong same-store volume growth in both our home health and hospice businesses. Combined with a sequential reduction of labor costs in the first quarter, we returned to historic growth levels and delivered results in line with our 2017 expectations.”
“Our Hospital Division continued to advance our multi-pronged LTAC patient criteria mitigation strategy in the first quarter. Our successful execution is reflected in the exceptional growth of the Hospital Division’s same-hospital non-government admissions, a key element of our LTAC mitigation strategy that helped offset light Medicare volumes. We also continue to make progress in reducing patients’ length of stay through our efforts to eliminate avoidable clinical delays. We remain confident that our mitigation strategies will offset at least half of the expected run-rate impact of LTAC patient criteria by year-end,” remarked Mr. Breier.
Mr. Breier added, “Since announcing our transformative initiative to divest our skilled nursing center business, our Nursing Center Division has maintained high standards of care while delivering stable operating results. We continue to make progress on our nursing center divestiture and remain focused on completing an accretive, value-enhancing transaction by year end.”
Mr. Breier concluded, “On behalf of Kindred’s entire leadership team, I am proud to share that our recently completed 2017 Quality, Innovation and Social Responsibility Report demonstrates another year of outperforming quality benchmarks and success in sending more patients home with better outcomes. We continue to deliver innovative post-acute solutions while building and deepening our relationships with key partners. Our clinical excellence, national reach, and innovative use of technology and data enable the development of new products that create value for all of our stakeholders, including our shareholders, payors and partners.”
| (1) | Results reflect after-tax costs of $9.8 million or $0.11 per diluted share related to restructuring costs and impairment charges. |
| (2) | Results reflect pre-tax costs of $15.4 million related to restructuring costs and impairment charges. As used herein, “EBITDAR” means earnings before interest, income taxes, depreciation, amortization and rent. See reconciliation of generally accepted accounting principles (“GAAP”) results to non-GAAP results beginning on page 13. |
| (3) | See reconciliation of GAAP results to non-GAAP results beginning on page 13. During the first quarter of 2017, the Company updated its definitions of “core” non-GAAP measures. See “Non-GAAP Measures” beginning on page 13 for a discussion regarding the updated definitions. For comparability, “core” results for 2016 have been revised to conform to the current year presentation. |
| (4) | Effective January 1, 2017, GAAP requires book to tax differences associated with stock-based compensation to be recorded to the provision for income taxes in the statement of operations rather than the statement of stockholders’ equity, which resulted in a $2.3 million or $0.03 per diluted share negative Core impact for the first quarter of 2017. There is no income tax provision impact (on a net provision basis) under GAAP reporting due to the deferred tax valuation allowance. |
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680 South Fourth Street Louisville, Kentucky 40202
502.596.7300 www.kindredhealthcare.com
Kindred Healthcare Reports First Quarter 2017 Results
Page 2
May 3, 2017
All financial and statistical information included in this earnings release reflects the continuing operations of the Company’s businesses for all periods presented unless otherwise indicated.
First Quarter Consolidated Results(1):
| • | Consolidated revenues were $1.77 billion, a 3.8% year-over-year decrease, primarily attributable to the impact of the transition to LTAC patient criteria and the sale or closure of 15 LTAC hospitals in the second half of 2016. GAAP income from continuing operations was $8.8 million compared to $25.8 million in the same period a year ago, primarily due to the impact of LTAC patient criteria and an increase in restructuring costs. Core EBITDAR declined to $217.8 million compared to $245.2 million in the same period of 2016, primarily due to LTAC patient criteria and the sale or closure of 15 LTAC hospitals noted above. |
| • | GAAP operating cash flows were a deficit of $92.6 million compared to a deficit of $130.4 million for the same period a year ago. Core operating cash flows were a deficit of $71.7 million compared to $1.0 million for the same period a year ago. Core free cash flows were a deficit of $109.4 million compared to a deficit of $33.4 million in the same period a year ago. GAAP operating cash flows improved in the first quarter of 2017 primarily due to a reduction in litigation settlements, including a $126 million litigation payment made in the first quarter of 2016. The decrease in core operating and core free cash flows was primarily attributable to an additional payroll of approximately $40 million, LTAC patient criteria and an increase in net working capital in the first quarter of 2017 compared to the prior year period. |
| • | GAAP diluted loss per share from continuing operations was $0.07 as compared to GAAP diluted earnings per share (“EPS”) from continuing operations of $0.15 a year ago. This decrease was primarily attributable to LTAC patient criteria and an increase in restructuring charges in the first quarter of 2017. Core diluted EPS from continuing operations was $0.04 as compared to $0.24 a year ago. The decline in core diluted EPS was primarily attributable to LTAC patient criteria and a $2.3 million, or $0.03 per diluted share, increase in the provision for income taxes due to an accounting rule change effective January 1, 2017 that requires book to tax differences associated with stock-based compensation to be recorded to the provision for income taxes in the statement of operations rather than the statement of stockholders’ equity. |
First Quarter Segment Results(1)(2):
Our Kindred at Home Division, which comprises the Company’s home health, hospice, community care and home-based primary care businesses, recorded first quarter revenues that increased 3.9% over the prior year period to $630.2 million. On a same-store basis, home health episodic admissions grew 4.3% (5.4% increase excluding the impact of the extra leap year day in the first quarter of 2016 (“leap year adjusted”)) and hospice admissions grew 3.9% (5.1% increase leap year adjusted) over the prior year period. Both Segment EBITDAR and Core EBITDAR were relatively flat in the first quarter of 2017 compared to the prior year period. On a sequential basis for both Segment EBITDAR and Core EBITDAR, home health direct labor costs per visit declined 3.7% and hospice direct labor costs per patient day were relatively flat in the first quarter of 2017 compared to the fourth quarter of 2016.
Kindred’s Hospital Division first quarter revenues declined to $540.3 million from $643.3 million in the prior year period primarily due to the impact of LTAC patient criteria, a 1.8% decline in same-hospital admissions (0.7% decline leap year adjusted) compared to last year and the sale or closure of 15 LTAC hospitals in the second half of 2016, which contributed approximately $63 million of revenue in the first quarter of 2016. Same-hospital non-government admissions increased 9.1% (10.3% increase leap year adjusted) in the first quarter of 2017 compared to the prior year period. Sequentially, same-hospital admissions increased 4.6%, non-government admissions increased 8.7% and same-hospital census improved 5.0% as compared to the fourth quarter of 2016. For the first quarter of 2017, approximately 86% (90% excluding Texas LTAC hospitals) of same-hospital revenue came from compliant patients, which include all patients except Medicare site neutral patients, down from 89% (92% excluding Texas LTAC hospitals) in the fourth quarter of 2016. Importantly, same-hospital compliant admissions grew 3.9% to 8,401 in the first quarter of 2017 from 8,087 compliant admissions in the fourth quarter of 2016. Segment EBITDAR and Core EBITDAR in the Hospital Division for the first quarter both declined to $91.2 million from $135.5 million a year ago, primarily due to the impact of LTAC patient criteria, increases in labor and other costs, and the sale or closure of 15 LTAC hospitals noted above, which contributed approximately $8 million of EBITDAR in the first quarter of 2016.
| (1) | See reconciliation of GAAP results to non-GAAP results beginning on page 13. During the first quarter of 2017, the Company updated its definitions of “core” non-GAAP measures. See “Non-GAAP Measures” beginning on page 13 for a discussion regarding the updated definitions. For comparability, “core” results for 2016 have been revised to conform to the current year presentation. |
| (2) | See same-hospital and full segment data on pages 8 through 12. |
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Kindred Healthcare Reports First Quarter 2017 Results
Page 3
May 3, 2017
First Quarter Segment Results(1)(2)(Continued):
Kindred Rehabilitation Services (“KRS”) Division, which comprises the Company’s hospital-based rehabilitation segment, increased first quarter revenues by 1.8% to $376.8 million as compared to $370.0 million in the prior year period. Segment EBITDAR and Core EBITDAR for KRS both increased 3.6% to $62.0 million as compared to $59.9 million in the prior year period. The Kindred Hospital Rehabilitation Services segment achieved strong revenue growth of 6.7% to $176.8 million, and Segment EBITDAR and Core EBITDAR both grew to $51.4 million, an increase of 7.4% compared to the same period a year ago, as a result of the development of new inpatient rehabilitation facilities (“IRFs”) and a 2.3% increase (3.4% increase leap year adjusted) in same-IRF discharges. RehabCare revenues declined 2.1% to $200.0 million for the first quarter, while first quarter Segment EBITDAR and Core EBITDAR both decreased to $10.6 million as compared to $12.0 million, all relative to the prior year period, primarily due to the reduction in sites of service, declines in customer census and average wage rate pressure. Sequentially, RehabCare Segment EBITDAR and Core EBITDAR grew from $5.6 million in the fourth quarter of 2016 to $10.6 million in the first quarter of 2017.
Kindred’s Nursing Center Division first quarter revenues were up slightly to $272.8 million, due to a 2.2% increase in revenue per patient day partially offset by an overall average daily census decline of 0.9% and Medicare length of stay contraction of 5.3%, both as compared to the prior year period. Segment EBITDAR and Core EBITDAR in the first quarter both increased 5.4% to $31.7 million from $30.1 million a year ago, as a result of an increase in revenue per patient day and improved cost efficiencies.
2017 Outlook(3)
All forward-looking non-GAAP financial measures used to provide “2017 Outlook” and “2018 Outlook” (collectively “Outlook”) are provided only on a non-GAAP basis. This is due to the inherent difficulty of forecasting the timing or amount of items that would be included in the most directly comparable forward-looking GAAP financial measures. As a result, reconciliation of the forward-looking non-GAAP financial measures to GAAP financial measures is not available without unreasonable effort and the Company is unable to assess the probable significance of the unavailable information.
The Company’s Outlook does not take into account the effect of any reimbursement changes, any further acquisitions or divestitures, and any further issuances or repurchases of common stock.
For the 2017 Outlook, Kindred reaffirms:
| • | Annual revenues of $7.2 billion, with a range of $7.1 billion to $7.3 billion. |
| • | Core EBITDAR of $930 million, with a range of $910 million to $950 million. |
| • | Core diluted EPS from continuing operations of $0.55, with a range of $0.40 to $0.70 per share(4). |
For the second quarter of 2017, Kindred expects Core EBITDAR of approximately $225 million to $240 million, and Core diluted EPS from continuing operations of approximately $0.10 to $0.20.
The 2017 Outlook assumes the Company’s skilled nursing facility business is operated for the entire year. For accounting purposes, this business may qualify as a discontinued operation prior to the completion of the divestiture. At the time the skilled nursing facility business qualifies as a discontinued operation, the Company will be required to recast its historical operating results from continuing operations to exclude the business for all periods presented. Kindred will also update its 2017 Outlook during the quarter in which the recasting occurs.
| (1) | See reconciliation of GAAP results to non-GAAP results beginning on page 13. During the first quarter of 2017, the Company updated its definitions of “core” non-GAAP measures. See “Non-GAAP Measures” beginning on page 13 for a discussion regarding the updated definitions. For comparability, “core” results for 2016 have been revised to conform to the current year presentation. |
| (2) | See same-hospital and full segment data on pages 8 through 12. |
| (3) | See Forward-Looking Statements beginning on page 13. |
| (4) | The EPS estimate is based upon an estimated weighted average annual diluted share count for 2017 of 88.5 million shares. |
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Kindred Healthcare Reports First Quarter 2017 Results
Page 4
May 3, 2017
2018 Outlook(1)
Kindred’s planned divestiture of its skilled nursing facilities will significantly impact the Company’s reported results, reducing revenues and expenses, and is expected to increase profitability.
For the 2018 Outlook, Kindred reaffirms:
| • | Annual revenues of approximately $6.3 billion. |
| • | Core EBITDAR of approximately $840 million. |
| • | Core diluted EPS from continuing operations of approximately $0.80(2). |
Please note that all of these items represent midpoint estimates that the Company expects to update over time, and these estimates assume that Kindred completes its skilled nursing facilities exit prior to the start of 2018.
Cash Flow
Stephen D. Farber, Executive Vice President and Chief Financial Officer of Kindred, noted, “Operating cash flows for the first quarter, which are typically lower than in other quarters of the year, were in line with our expectations, and, as noted above, included the impact of an extra payroll of approximately $40 million compared to the prior year quarter, LTAC patient criteria and typical fluctuations in working capital. As previously discussed, once we complete the sale of our skilled nursing facility business and with our continued progress in 2017 mitigating LTAC patient criteria, we expect Kindred’s cash flow in 2018 to return to historical levels of roughly $300 million per year in core operating cash flows. Core free cash flows, which have been approximately half of core operating cash flows, will benefit from reductions in capital expenditures and noncontrolling interests that will result from our exit from the skilled nursing facility business.”
Conference Call
As previously announced, investors and the general public may access a live webcast of the first quarter 2017 conference call through a link on the Company’s website at http://investors.kindredhealthcare.com. The conference call will be held on May 4 at 9:00 a.m. (Eastern Time).
A telephone replay of the conference call will become available at approximately 12:00 p.m. on May 4 by dialing (719) 457-0820, access code: 8925579. The replay will be available through May 14.
Forward-Looking Statements and Non-GAAP Reconciliations
See page 13 for important disclosures regarding the Company’s forward-looking statements and the non-GAAP financial reconciliations that follow.
About Kindred Healthcare
Kindred Healthcare, Inc., a top-90 private employer in the United States, is a FORTUNE 500 healthcare services company based in Louisville, Kentucky with annual revenues of approximately $7.2 billion(3). At March 31, 2017, Kindred through its subsidiaries had approximately 100,100 employees providing healthcare services in 2,624 locations in 46 states, including 82 LTAC hospitals, 19 inpatient rehabilitation hospitals, 91 nursing centers, 19 sub-acute units, 619 Kindred at Home home health, hospice and non-medical home care sites of service, 101 inpatient rehabilitation units (hospital-based) and contract rehabilitation service businesses which served 1,693 non-affiliated sites of service. Ranked as one of Fortune magazine’s Most Admired Healthcare Companies for eight years, Kindred’s 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. You can also follow us on Twitter and Facebook.
| (1) | See Forward-Looking Statements beginning on page 13. |
| (2) | The EPS estimate is based upon an estimated weighted average annual diluted share count for 2018 of 90.0 million shares. |
| (3) | Revenues for the last twelve months ended March 31, 2017. |
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Kindred Healthcare Reports First Quarter 2017 Results
Page 5
May 3, 2017
KINDRED HEALTHCARE, INC.
Condensed Consolidated Statement of Operations
(Unaudited)
(In thousands, except per share amounts)
| Three months ended March 31, |
||||||||
| 2017 | 2016 | |||||||
| Revenues |
$ | 1,768,396 | $ | 1,837,971 | ||||
|
|
|
|
|
|||||
| Salaries, wages and benefits |
931,880 | 926,214 | ||||||
| Supplies |
90,186 | 99,416 | ||||||
| Rent |
95,612 | 97,517 | ||||||
| Other operating expenses |
205,483 | 214,701 | ||||||
| General and administrative expenses |
323,236 | 353,826 | ||||||
| Other income |
(228 | ) | (952 | ) | ||||
| Litigation contingency expense |
— | 1,910 | ||||||
| Impairment charges |
1,157 | 7,788 | ||||||
| Restructuring charges |
16,172 | 1,952 | ||||||
| Depreciation and amortization |
34,960 | 40,681 | ||||||
| Interest expense |
59,334 | 57,499 | ||||||
| Investment income |
(527 | ) | (254 | ) | ||||
|
|
|
|
|
|||||
| 1,757,265 | 1,800,298 | |||||||
|
|
|
|
|
|||||
| Income from continuing operations before income taxes |
11,131 | 37,673 | ||||||
| Provision for income taxes |
2,302 | 11,836 | ||||||
|
|
|
|
|
|||||
| Income from continuing operations |
8,829 | 25,837 | ||||||
| Discontinued operations, net of income taxes: |
||||||||
| Income (loss) from operations |
387 | (582 | ) | |||||
| Gain on divestiture of operations |
— | 262 | ||||||
|
|
|
|
|
|||||
| Income (loss) from discontinued operations |
387 | (320 | ) | |||||
|
|
|
|
|
|||||
| Net income |
9,216 | 25,517 | ||||||
| (Earnings) loss attributable to noncontrolling interests: |
||||||||
| Continuing operations |
(14,965 | ) | (12,514 | ) | ||||
| Discontinued operations |
1 | (2 | ) | |||||
|
|
|
|
|
|||||
| (14,964 | ) | (12,516 | ) | |||||
|
|
|
|
|
|||||
| Income (loss) attributable to Kindred |
$ | (5,748 | ) | $ | 13,001 | |||
|
|
|
|
|
|||||
| Amounts attributable to Kindred stockholders: |
||||||||
| Income (loss) from continuing operations |
$ | (6,136 | ) | $ | 13,323 | |||
| Income (loss) from discontinued operations |
388 | (322 | ) | |||||
|
|
|
|
|
|||||
| Net income (loss) |
$ | (5,748 | ) | $ | 13,001 | |||
|
|
|
|
|
|||||
| Earnings (loss) per common share: |
||||||||
| Basic: |
||||||||
| Income (loss) from continuing operations |
$ | (0.07 | ) | $ | 0.15 | |||
| Discontinued operations: |
||||||||
| Income (loss) from operations |
— | — | ||||||
| Gain on divestiture of operations |
— | — | ||||||
|
|
|
|
|
|||||
| Income (loss) from discontinued operations |
— | — | ||||||
|
|
|
|
|
|||||
| Net income (loss) |
$ | (0.07 | ) | $ | 0.15 | |||
|
|
|
|
|
|||||
| Diluted: |
||||||||
| Income (loss) from continuing operations |
$ | (0.07 | ) | $ | 0.15 | |||
| Discontinued operations: |
||||||||
| Income (loss) from operations |
— | — | ||||||
| Gain on divestiture of operations |
— | — | ||||||
|
|
|
|
|
|||||
| Income (loss) from discontinued operations |
— | — | ||||||
|
|
|
|
|
|||||
| Net income (loss) |
$ | (0.07 | ) | $ | 0.15 | |||
|
|
|
|
|
|||||
| Shares used in computing earnings (loss) per common share: |
||||||||
| Basic |
87,085 | 86,590 | ||||||
| Diluted |
87,085 | 87,249 | ||||||
| Cash dividends declared and paid per common share |
$ | 0.12 | $ | 0.12 | ||||
Kindred Healthcare Reports First Quarter 2017 Results
Page 6
May 3, 2017
KINDRED HEALTHCARE, INC.
Condensed Consolidated Balance Sheet
(Unaudited)
(In thousands, except per share amounts)
| March 31, 2017 |
December 31, 2016 |
|||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 116,913 | $ | 137,061 | ||||
| Insurance subsidiary investments |
110,872 | 108,966 | ||||||
| Accounts receivable less allowance for loss |
1,246,855 | 1,172,078 | ||||||
| Inventories |
24,701 | 24,673 | ||||||
| Income taxes |
7,776 | 10,067 | ||||||
| Other |
66,899 | 63,693 | ||||||
|
|
|
|
|
|||||
| 1,574,016 | 1,516,538 | |||||||
| Property and equipment |
2,014,453 | 2,026,430 | ||||||
| Accumulated depreciation |
(1,158,911 | ) | (1,147,844 | ) | ||||
|
|
|
|
|
|||||
| 855,542 | 878,586 | |||||||
| Goodwill |
2,427,074 | 2,427,074 | ||||||
| Intangible assets less accumulated amortization |
783,020 | 790,235 | ||||||
| Insurance subsidiary investments |
201,115 | 204,929 | ||||||
| Other |
303,842 | 295,362 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 6,144,609 | $ | 6,112,724 | ||||
|
|
|
|
|
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| LIABILITIES AND EQUITY | ||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 179,151 | $ | 203,925 | ||||
| Salaries, wages and other compensation |
378,805 | 397,486 | ||||||
| Due to third party payors |
34,481 | 41,320 | ||||||
| Professional liability risks |
66,073 | 65,284 | ||||||
| Other accrued liabilities |
241,387 | 269,736 | ||||||
| Long-term debt due within one year |
24,828 | 27,977 | ||||||
|
|
|
|
|
|||||
| 924,725 | 1,005,728 | |||||||
| Long-term debt |
3,344,511 | 3,215,062 | ||||||
| Professional liability risks |
300,773 | 295,311 | ||||||
| Deferred tax liabilities |
202,867 | 201,808 | ||||||
| Deferred credits and other liabilities |
354,277 | 353,294 | ||||||
| Equity: |
||||||||
| Stockholders’ equity: |
||||||||
| Common stock, $0.25 par value; authorized 175,000 shares; issued 85,691 shares - March 31, 2017 and 85,166 shares - December 31, 2016 |
21,423 | 21,291 | ||||||
| Capital in excess of par value |
1,700,748 | 1,710,231 | ||||||
| Accumulated other comprehensive income |
3,444 | 1,573 | ||||||
| Accumulated deficit |
(926,292 | ) | (920,544 | ) | ||||
|
|
|
|
|
|||||
| 799,323 | 812,551 | |||||||
| Noncontrolling interests |
218,133 | 228,970 | ||||||
|
|
|
|
|
|||||
| Total equity |
1,017,456 | 1,041,521 | ||||||
|
|
|
|
|
|||||
| Total liabilities and equity |
$ | 6,144,609 | $ | 6,112,724 | ||||
|
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|
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Kindred Healthcare Reports First Quarter 2017 Results
Page 7
May 3, 2017
KINDRED HEALTHCARE, INC.
Condensed Consolidated Statement of Cash Flows
(Unaudited)
(In thousands)
| Three months ended March 31, |
||||||||
| 2017 | 2016 | |||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 9,216 | $ | 25,517 | ||||
| Adjustments to reconcile net income to net cash used in operating activities: |
||||||||
| Depreciation expense |
30,300 | 33,957 | ||||||
| Amortization of intangible assets |
4,660 | 6,826 | ||||||
| Amortization of stock-based compensation costs |
3,132 | 4,404 | ||||||
| Amortization of deferred financing costs |
4,132 | 3,567 | ||||||
| Payment of lender fees related to debt amendment |
(5,403 | ) | — | |||||
| Provision for doubtful accounts |
11,218 | 11,725 | ||||||
| Deferred income taxes |
1,227 | 11,496 | ||||||
| Impairment charges |
1,157 | 7,788 | ||||||
| Gain on divestiture of discontinued operations |
— | (262 | ) | |||||
| Other |
6,050 | 303 | ||||||
| Change in operating assets and liabilities: |
||||||||
| Accounts receivable |
(85,833 | ) | (87,892 | ) | ||||
| Inventories and other assets |
(4,457 | ) | (5,232 | ) | ||||
| Accounts payable |
(24,497 | ) | (10,621 | ) | ||||
| Income taxes |
2,291 | 146 | ||||||
| Due to third party payors |
(6,839 | ) | (4,843 | ) | ||||
| Other accrued liabilities |
(38,992 | ) | (127,219 | ) | ||||
|
|
|
|
|
|||||
| Net cash used in operating activities |
(92,638 | ) | (130,340 | ) | ||||
|
|
|
|
|
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| Cash flows from investing activities: |
||||||||
| Routine capital expenditures |
(11,941 | ) | (18,106 | ) | ||||
| Development capital expenditures |
(5,439 | ) | (10,019 | ) | ||||
| Acquisitions, net of cash acquired |
(3,150 | ) | (26,339 | ) | ||||
| Acquisition deposits |
— | 18,489 | ||||||
| Sale of assets |
— | 1,081 | ||||||
| Purchase of insurance subsidiary investments |
(22,308 | ) | (32,841 | ) | ||||
| Sale of insurance subsidiary investments |
18,699 | 30,890 | ||||||
| Net change in insurance subsidiary cash and cash equivalents |
6,412 | 9,958 | ||||||
| Net change in other investments |
29 | (33,981 | ) | |||||
| Other |
154 | (1,919 | ) | |||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
(17,544 | ) | (62,787 | ) | ||||
|
|
|
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|
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| Cash flows from financing activities: |
||||||||
| Proceeds from borrowings under revolving credit |
478,600 | 533,700 | ||||||
| Repayment of borrowings under revolving credit |
(343,400 | ) | (303,100 | ) | ||||
| Proceeds from other long-term debt |
— | 750 | ||||||
| Repayment of term loan |
(3,509 | ) | (3,003 | ) | ||||
| Repayment of other long-term debt |
(284 | ) | (280 | ) | ||||
| Payment of deferred financing costs |
(79 | ) | (151 | ) | ||||
| Payment of dividend for mandatory redeemable preferred stock |
(3,010 | ) | (2,801 | ) | ||||
| Dividends paid |
(10,228 | ) | (10,068 | ) | ||||
| Contributions made by noncontrolling interests |
— | 4,368 | ||||||
| Distributions to noncontrolling interests |
(25,801 | ) | (16,315 | ) | ||||
| Purchase of noncontrolling interests |
— | (1,000 | ) | |||||
| Payroll tax payments for equity awards issuance |
(2,255 | ) | (2,649 | ) | ||||
|
|
|
|
|
|||||
| Net cash provided by financing activities |
90,034 | 199,451 | ||||||
|
|
|
|
|
|||||
| Change in cash and cash equivalents |
(20,148 | ) | 6,324 | |||||
| Cash and cash equivalents at beginning of period |
137,061 | 98,758 | ||||||
|
|
|
|
|
|||||
| Cash and cash equivalents at end of period |
$ | 116,913 | $ | 105,082 | ||||
|
|
|
|
|
|||||
Kindred Healthcare Reports First Quarter 2017 Results
Page 8
May 3, 2017
KINDRED HEALTHCARE, INC.
Condensed Consolidated and Business Segment Data
(Unaudited)
(In thousands, except per share amounts)
| 2016 Quarters | First Quarter |
First quarter % change v. |
||||||||||||||||||||||||||
| First | Second | Third | Fourth | Year | 2017 | prior year | ||||||||||||||||||||||
| Condensed consolidated income statement data: |
||||||||||||||||||||||||||||
| GAAP presentation: |
||||||||||||||||||||||||||||
| Revenues |
$ | 1,837,971 | $ | 1,842,070 | $ | 1,793,527 | $ | 1,745,951 | $ | 7,219,519 | $ | 1,768,396 | (3.8 | ) | ||||||||||||||
| Operating expenses |
1,604,855 | 1,591,898 | 1,986,221 | 1,558,329 | 6,741,303 | 1,567,886 | (2.3 | ) | ||||||||||||||||||||
| Rent |
97,517 | 100,093 | 98,415 | 94,509 | 390,534 | 95,612 | (2.0 | ) | ||||||||||||||||||||
| Depreciation and amortization |
40,681 | 40,257 | 40,382 | 38,082 | 159,402 | 34,960 | (14.1 | ) | ||||||||||||||||||||
| Interest, net |
57,245 | 57,559 | 58,052 | 58,629 | 231,485 | 58,807 | 2.7 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Income (loss) from continuing operations before income taxes |
37,673 | 52,263 | (389,543 | ) | (3,598 | ) | (303,205 | ) | 11,131 | (70.5 | ) | |||||||||||||||||
| Provision (benefit) for income taxes |
11,836 | 17,882 | 281,752 | 2,860 | 314,330 | 2,302 | (80.6 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Income (loss) from continuing operations |
25,837 | 34,381 | (671,295 | ) | (6,458 | ) | (617,535 | ) | 8,829 | (65.8 | ) | |||||||||||||||||
| Noncontrolling interests |
(12,514 | ) | (13,522 | ) | (14,305 | ) | (13,261 | ) | (53,602 | ) | (14,965 | ) | 19.6 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net income (loss) attributable to Kindred |
$ | 13,323 | $ | 20,859 | $ | (685,600 | ) | $ | (19,719 | ) | $ | (671,137 | ) | $ | (6,136 | ) | (146.1 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Diluted EPS |
$ | 0.15 | $ | 0.23 | $ | (7.89 | ) | $ | (0.23 | ) | $ | (7.73 | ) | $ | (0.07 | ) | (146.7 | ) | ||||||||||
| Diluted shares |
87,249 | 87,500 | 86,869 | 86,904 | 86,800 | 87,085 | (0.2 | ) | ||||||||||||||||||||
| Core presentation (a): |
||||||||||||||||||||||||||||
| EBITDAR |
$ | 245,209 | $ | 267,543 | $ | 217,596 | $ | 214,928 | $ | 945,276 | $ | 217,839 | (11.2 | ) | ||||||||||||||
| Rent |
97,517 | 100,093 | 98,143 | 94,509 | 390,262 | 95,612 | (2.0 | ) | ||||||||||||||||||||
| Provision for income taxes |
16,013 | 21,335 | 3,901 | 3,262 | 44,511 | 9,837 | (38.6 | ) | ||||||||||||||||||||
| Net income attributable to Kindred |
21,239 | 33,761 | 2,525 | 7,185 | 64,710 | 3,658 | (82.8 | ) | ||||||||||||||||||||
| Core diluted EPS |
$ | 0.24 | $ | 0.38 | $ | 0.03 | $ | 0.08 | $ | 0.72 | $ | 0.04 | (83.3 | ) | ||||||||||||||
| Diluted shares |
87,249 | 87,500 | 87,529 | 87,641 | 87,491 | 87,744 | 0.6 | |||||||||||||||||||||
| Revenues by segment: |
||||||||||||||||||||||||||||
| Kindred at Home: |
||||||||||||||||||||||||||||
| Home health |
$ | 430,035 | $ | 438,556 | $ | 449,958 | $ | 444,073 | $ | 1,762,622 | $ | 450,831 | 4.8 | |||||||||||||||
| Hospice |
176,426 | 185,641 | 188,575 | 186,161 | 736,803 | 179,378 | 1.7 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| 606,461 | 624,197 | 638,533 | 630,234 | 2,499,425 | 630,209 | 3.9 | ||||||||||||||||||||||
| Hospital division |
643,299 | 633,695 | 575,323 | 530,746 | 2,383,063 | 540,280 | (16.0 | ) | ||||||||||||||||||||
| Kindred Rehabilitation Services: |
||||||||||||||||||||||||||||
| Kindred Hospital Rehabilitation Services |
165,774 | 169,815 | 169,018 | 170,041 | 674,648 | 176,812 | 6.7 | |||||||||||||||||||||
| RehabCare |
204,248 | 196,075 | 192,480 | 191,489 | 784,292 | 200,031 | (2.1 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| 370,022 | 365,890 | 361,498 | 361,530 | 1,458,940 | 376,843 | 1.8 | ||||||||||||||||||||||
| Nursing center division |
272,227 | 272,395 | 270,259 | 273,055 | 1,087,936 | 272,845 | 0.2 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| 1,892,009 | 1,896,177 | 1,845,613 | 1,795,565 | 7,429,364 | 1,820,177 | (3.8 | ) | |||||||||||||||||||||
| Eliminations |
(54,038 | ) | (54,107 | ) | (52,086 | ) | (49,614 | ) | (209,845 | ) | (51,781 | ) | (4.2 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| $ | 1,837,971 | $ | 1,842,070 | $ | 1,793,527 | $ | 1,745,951 | $ | 7,219,519 | $ | 1,768,396 | (3.8 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| (a) | See reconciliation of GAAP results to non-GAAP results beginning on page 13. During the first quarter of 2017, the Company updated its definitions of “core” non-GAAP measures. See “Non-GAAP Measures” beginning on page 13 for a discussion regarding the updated definitions. For comparability, “core” results for 2016 have been revised to conform to the current year presentation. |
Kindred Healthcare Reports First Quarter 2017 Results
Page 9
May 3, 2017
KINDRED HEALTHCARE, INC.
Condensed Consolidated and Business Segment Data (Continued)
(Unaudited)
(In thousands, except statistics)
| 2016 Quarters | First Quarter |
First quarter % change v. |
||||||||||||||||||||||||||
| First | Second | Third | Fourth | Year | 2017 | prior year | ||||||||||||||||||||||
| Segment EBITDAR: |
||||||||||||||||||||||||||||
| Kindred at Home: |
||||||||||||||||||||||||||||
| Home health |
$ | 66,941 | $ | 76,030 | $ | 75,073 | $ | 61,487 | $ | 279,531 | $ | 63,750 | (4.8 | ) | ||||||||||||||
| Hospice |
24,866 | 31,329 | 31,326 | 28,805 | 116,326 | 27,581 | 10.9 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| 91,807 | 107,359 | 106,399 | 90,292 | 395,857 | 91,331 | (0.5 | ) | |||||||||||||||||||||
| Hospital division |
135,495 | 125,932 | 82,752 | 91,892 | 436,071 | 91,169 | (32.7 | ) | ||||||||||||||||||||
| Kindred Rehabilitation Services: |
||||||||||||||||||||||||||||
| Kindred Hospital Rehabilitation Services |
47,870 | 50,469 | 49,470 | 49,314 | 197,123 | 51,403 | 7.4 | |||||||||||||||||||||
| RehabCare |
11,987 | 13,269 | 9,248 | 5,578 | 40,082 | 10,609 | (11.5 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| 59,857 | 63,738 | 58,718 | 54,892 | 237,205 | 62,012 | 3.6 | ||||||||||||||||||||||
| Nursing center division |
30,100 | 33,662 | 29,922 | 33,658 | 127,342 | 31,718 | 5.4 | |||||||||||||||||||||
| Core EBITDAR by segment (a): |
||||||||||||||||||||||||||||
| Kindred at Home: |
||||||||||||||||||||||||||||
| Home health |
$ | 65,803 | $ | 75,859 | $ | 75,073 | $ | 61,185 | $ | 277,920 | $ | 63,750 | (3.1 | ) | ||||||||||||||
| Hospice |
24,866 | 31,329 | 31,326 | 27,668 | 115,189 | 27,581 | 10.9 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| 90,669 | 107,188 | 106,399 | 88,853 | 393,109 | 91,331 | 0.7 | ||||||||||||||||||||||
| Hospital division |
135,495 | 125,932 | 82,752 | 91,262 | 435,441 | 91,169 | (32.7 | ) | ||||||||||||||||||||
| Kindred Rehabilitation Services: |
||||||||||||||||||||||||||||
| Kindred Hospital Rehabilitation Services |
47,870 | 50,469 | 49,470 | 49,314 | 197,123 | 51,403 | 7.4 | |||||||||||||||||||||
| RehabCare |
11,987 | 13,269 | 9,248 | 5,578 | 40,082 | 10,609 | (11.5 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| 59,857 | 63,738 | 58,718 | 54,892 | 237,205 | 62,012 | 3.6 | ||||||||||||||||||||||
| Nursing center division |
30,100 | 33,662 | 29,922 | 33,658 | 127,342 | 31,718 | 5.4 | |||||||||||||||||||||
| Support center |
(69,945 | ) | (62,625 | ) | (58,463 | ) | (53,350 | ) | (244,383 | ) | (58,391 | ) | (16.5 | ) | ||||||||||||||
| Litigation contingency expense |
(885 | ) | (180 | ) | — | — | (1,065 | ) | — | |||||||||||||||||||
| Transaction costs |
(82 | ) | (172 | ) | (1,732 | ) | (387 | ) | (2,373 | ) | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| $ | 245,209 | $ | 267,543 | $ | 217,596 | $ | 214,928 | $ | 945,276 | $ | 217,839 | (11.2 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| EBITDAR margin by segment: |
||||||||||||||||||||||||||||
| Kindred at Home: |
||||||||||||||||||||||||||||
| Home health |
15.6 | 17.3 | 16.7 | 13.8 | 15.9 | 14.1 | (1.5 | ) | ||||||||||||||||||||
| Hospice |
14.1 | 16.9 | 16.6 | 15.5 | 15.8 | 15.4 | 1.3 | |||||||||||||||||||||
| Kindred at Home |
15.1 | 17.2 | 16.7 | 14.3 | 15.8 | 14.5 | (0.6 | ) | ||||||||||||||||||||
| Hospital division |
21.1 | 19.9 | 14.4 | 17.3 | 18.3 | 16.9 | (4.2 | ) | ||||||||||||||||||||
| Kindred Rehabilitation Services: |
||||||||||||||||||||||||||||
| Kindred Hospital Rehabilitation Services |
28.9 | 29.7 | 29.3 | 29.0 | 29.2 | 29.1 | 0.2 | |||||||||||||||||||||
| RehabCare |
5.9 | 6.8 | 4.8 | 2.9 | 5.1 | 5.3 | (0.6 | ) | ||||||||||||||||||||
| Kindred Rehabilitation Services |
16.2 | 17.4 | 16.2 | 15.2 | 16.3 | 16.5 | 0.3 | |||||||||||||||||||||
| Nursing center division |
11.1 | 12.4 | 11.1 | 12.3 | 11.7 | 11.6 | 0.5 | |||||||||||||||||||||
| Core EBITDAR margin by segment (a): |
||||||||||||||||||||||||||||
| Kindred at Home: |
||||||||||||||||||||||||||||
| Home health |
15.3 | 17.3 | 16.7 | 13.8 | 15.8 | 14.1 | (1.2 | ) | ||||||||||||||||||||
| Hospice |
14.1 | 16.9 | 16.6 | 14.9 | 15.6 | 15.4 | 1.3 | |||||||||||||||||||||
| Kindred at Home |
15.0 | 17.2 | 16.7 | 14.1 | 15.7 | 14.5 | (0.5 | ) | ||||||||||||||||||||
| Hospital division |
21.1 | 19.9 | 14.4 | 17.2 | 18.3 | 16.9 | (4.2 | ) | ||||||||||||||||||||
| Kindred Rehabilitation Services: |
||||||||||||||||||||||||||||
| Kindred Hospital Rehabilitation Services |
28.9 | 29.7 | 29.3 | 29.0 | 29.2 | 29.1 | 0.2 | |||||||||||||||||||||
| RehabCare |
5.9 | 6.8 | 4.8 | 2.9 | 5.1 | 5.3 | (0.6 | ) | ||||||||||||||||||||
| Kindred Rehabilitation Services |
16.2 | 17.4 | 16.2 | 15.2 | 16.3 | 16.5 | 0.3 | |||||||||||||||||||||
| Nursing center division |
11.1 | 12.4 | 11.1 | 12.3 | 11.7 | 11.6 | 0.5 | |||||||||||||||||||||
| Consolidated |
13.3 | 14.5 | 12.1 | 12.3 | 13.1 | 12.3 | (1.0 | ) | ||||||||||||||||||||
| (a) | See reconciliation of GAAP results to non-GAAP results beginning on page 13. During the first quarter of 2017, the Company updated its definitions of “core” non-GAAP measures. See “Non-GAAP Measures” beginning on page 13 for a discussion regarding the updated definitions. For comparability, “core” results for 2016 have been revised to conform to the current year presentation. |
Kindred Healthcare Reports First Quarter 2017 Results
Page 10
May 3, 2017
KINDRED HEALTHCARE, INC.
Condensed Business Segment Data
(Unaudited)
| 2016 Quarters | First Quarter |
First quarter % change v. |
||||||||||||||||||||||||||
| First | Second | Third | Fourth | Year | 2017 | prior year | ||||||||||||||||||||||
| Kindred at Home: |
||||||||||||||||||||||||||||
| Home Health: |
||||||||||||||||||||||||||||
| Sites of service (at end of period) |
384 | 384 | 395 | 390 | 379 | |||||||||||||||||||||||
| Revenue mix %: |
||||||||||||||||||||||||||||
| Medicare |
79.8 | 79.3 | 78.1 | 77.9 | 78.8 | 76.7 | ||||||||||||||||||||||
| Medicaid |
2.1 | 2.1 | 2.5 | 1.9 | 2.1 | 1.7 | ||||||||||||||||||||||
| Commercial and other |
8.4 | 8.2 | 8.6 | 10.6 | 8.9 | 11.5 | ||||||||||||||||||||||
| Commercial paid at episodic rates |
9.7 | 10.4 | 10.8 | 9.6 | 10.2 | 10.1 | ||||||||||||||||||||||
| Episodic revenues ($ 000s) |
$ | 325,821 | $ | 332,193 | $ | 332,562 | $ | 323,398 | $ | 1,313,974 | $ | 326,881 | 0.3 | |||||||||||||||
| Total episodic admissions |
71,426 | 70,212 | 69,219 | 67,501 | 278,358 | 73,270 | 2.6 | |||||||||||||||||||||
| Same-store total episodic admissions |
65,485 | 64,326 | 63,529 | 62,132 | 255,472 | 68,278 | 4.3 | |||||||||||||||||||||
| Medicare episodic admissions |
62,011 | 60,730 | 59,823 | 59,540 | 242,104 | 62,404 | 0.6 | |||||||||||||||||||||
| Total episodes |
113,887 | 113,278 | 113,256 | 111,164 | 451,585 | 114,964 | 0.9 | |||||||||||||||||||||
| Episodes per admission |
1.59 | 1.61 | 1.64 | 1.65 | 1.62 | 1.57 | (1.3 | ) | ||||||||||||||||||||
| Revenue per episode |
$ | 2,861 | $ | 2,933 | $ | 2,936 | $ | 2,909 | $ | 2,910 | $ | 2,843 | (0.6 | ) | ||||||||||||||
| Hospice: |
||||||||||||||||||||||||||||
| Sites of service (at end of period) |
177 | 177 | 185 | 183 | 180 | |||||||||||||||||||||||
| Admissions |
13,234 | 13,149 | 12,916 | 12,660 | 51,959 | 13,649 | 3.1 | |||||||||||||||||||||
| Same-store admissions |
12,387 | 12,365 | 12,104 | 11,946 | 48,802 | 12,870 | 3.9 | |||||||||||||||||||||
| Average length of stay |
92 | 91 | 98 | 100 | 95 | 96 | 4.3 | |||||||||||||||||||||
| Patient days |
1,183,908 | 1,238,584 | 1,277,125 | 1,246,152 | 4,945,769 | 1,193,061 | 0.8 | |||||||||||||||||||||
| Average daily census |
13,010 | 13,611 | 13,882 | 13,545 | 13,513 | 13,256 | 1.9 | |||||||||||||||||||||
| Revenue per patient day |
$ | 149 | $ | 150 | $ | 148 | $ | 149 | $ | 149 | $ | 150 | 0.7 | |||||||||||||||
| Community Care and other revenues (included in Home Health business segment) ($ 000s) |
$ | 66,305 | $ | 68,229 | $ | 75,978 | $ | 74,875 | $ | 285,387 | $ | 74,095 | 11.7 | |||||||||||||||
| Hospital division: |
||||||||||||||||||||||||||||
| End of period data: |
||||||||||||||||||||||||||||
| Number of transitional care hospitals |
95 | 97 | 94 | 82 | 82 | |||||||||||||||||||||||
| Number of licensed beds |
7,089 | 7,067 | 6,890 | 6,107 | 6,107 | |||||||||||||||||||||||
| Revenue mix %: |
||||||||||||||||||||||||||||
| Medicare |
57.8 | 55.5 | 54.6 | 53.5 | 55.5 | 52.8 | ||||||||||||||||||||||
| Medicaid |
4.2 | 4.2 | 4.0 | 4.5 | 4.2 | 3.9 | ||||||||||||||||||||||
| Medicare Advantage |
11.5 | 12.0 | 12.1 | 11.0 | 11.7 | 12.2 | ||||||||||||||||||||||
| Medicaid Managed |
5.6 | 6.3 | 7.3 | 8.0 | 6.7 | 9.1 | ||||||||||||||||||||||
| Commercial insurance and other |
20.9 | 22.0 | 22.0 | 23.0 | 21.9 | 22.0 | ||||||||||||||||||||||
| Admissions: |
||||||||||||||||||||||||||||
| Medicare |
8,919 | 8,253 | 7,861 | 7,351 | 32,384 | 7,529 | (15.6 | ) | ||||||||||||||||||||
| Medicaid |
463 | 386 | 375 | 336 | 1,560 | 354 | (23.5 | ) | ||||||||||||||||||||
| Medicare Advantage |
1,453 | 1,382 | 1,327 | 1,210 | 5,372 | 1,354 | (6.8 | ) | ||||||||||||||||||||
| Medicaid Managed |
733 | 768 | 861 | 787 | 3,149 | 851 | 16.1 | |||||||||||||||||||||
| Commercial insurance and other |
1,871 | 1,807 | 1,727 | 1,488 | 6,893 | 1,614 | (13.7 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| 13,439 | 12,596 | 12,151 | 11,172 | 49,358 | 11,702 | (12.9 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Patient days: |
||||||||||||||||||||||||||||
| Medicare |
229,004 | 219,013 | 202,482 | 186,290 | 836,789 | 187,738 | (18.0 | ) | ||||||||||||||||||||
| Medicaid |
21,134 | 19,409 | 16,781 | 12,181 | 69,505 | 13,334 | (36.9 | ) | ||||||||||||||||||||
| Medicare Advantage |
45,760 | 47,697 | 43,241 | 37,526 | 174,224 | 41,020 | (10.4 | ) | ||||||||||||||||||||
| Medicaid Managed |
25,341 | 27,267 | 28,534 | 29,275 | 110,417 | 32,713 | 29.1 | |||||||||||||||||||||
| Commercial insurance and other |
62,769 | 63,009 | 59,856 | 54,148 | 239,782 | 53,695 | (14.5 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| 384,008 | 376,395 | 350,894 | 319,420 | 1,430,717 | 328,500 | (14.5 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Average length of stay: |
||||||||||||||||||||||||||||
| Medicare |
25.7 | 26.5 | 25.8 | 25.3 | 25.8 | 24.9 | (3.1 | ) | ||||||||||||||||||||
| Medicaid |
45.6 | 50.3 | 44.7 | 36.3 | 44.6 | 37.7 | (17.3 | ) | ||||||||||||||||||||
| Medicare Advantage |
31.5 | 34.5 | 32.6 | 31.0 | 32.4 | 30.3 | (3.8 | ) | ||||||||||||||||||||
| Medicaid Managed |
34.6 | 35.5 | 33.1 | 37.2 | 35.1 | 38.4 | 11.0 | |||||||||||||||||||||
| Commercial insurance and other |
33.5 | 34.9 | 34.7 | 36.4 | 34.8 | 33.3 | (0.6 | ) | ||||||||||||||||||||
| Weighted average |
28.6 | 29.9 | 28.9 | 28.6 | 29.0 | 28.1 | (1.7 | ) | ||||||||||||||||||||
| Revenues per admission: |
||||||||||||||||||||||||||||
| Medicare |
$ | 41,717 | $ | 42,579 | $ | 39,945 | $ | 38,602 | $ | 40,800 | $ | 37,867 | (9.2 | ) | ||||||||||||||
| Medicaid |
57,928 | 69,797 | 61,338 | 70,333 | 64,356 | 60,091 | 3.7 | |||||||||||||||||||||
| Medicare Advantage |
51,080 | 55,105 | 52,363 | 48,387 | 51,826 | 48,555 | (4.9 | ) | ||||||||||||||||||||
| Medicaid Managed |
49,287 | 51,696 | 48,631 | 54,238 | 50,932 | 57,736 | 17.1 | |||||||||||||||||||||
| Commercial insurance and other |
71,651 | 77,193 | 73,515 | 82,066 | 75,819 | 73,750 | 2.9 | |||||||||||||||||||||
| Weighted average |
47,868 | 50,309 | 47,348 | 47,507 | 48,281 | 46,170 | (3.5 | ) | ||||||||||||||||||||
| Revenues per patient day: |
||||||||||||||||||||||||||||
| Medicare |
$ | 1,625 | $ | 1,605 | $ | 1,551 | $ | 1,523 | $ | 1,579 | $ | 1,519 | (6.5 | ) | ||||||||||||||
| Medicaid |
1,269 | 1,388 | 1,371 | 1,940 | 1,444 | 1,595 | 25.7 | |||||||||||||||||||||
| Medicare Advantage |
1,622 | 1,597 | 1,607 | 1,560 | 1,598 | 1,603 | (1.2 | ) | ||||||||||||||||||||
| Medicaid Managed |
1,426 | 1,456 | 1,467 | 1,458 | 1,453 | 1,502 | 5.3 | |||||||||||||||||||||
| Commercial insurance and other |
2,136 | 2,214 | 2,121 | 2,255 | 2,180 | 2,217 | 3.8 | |||||||||||||||||||||
| Weighted average |
1,675 | 1,684 | 1,640 | 1,662 | 1,666 | 1,645 | (1.8 | ) | ||||||||||||||||||||
| Medicare case mix index (discharged patients only) |
1.163 | 1.179 | 1.172 | 1.153 | 1.169 | 1.172 | 0.8 | |||||||||||||||||||||
| Average daily census |
4,220 | 4,136 | 3,814 | 3,472 | 3,909 | 3,650 | (13.5 | ) | ||||||||||||||||||||
| Occupancy % |
68.0 | 67.5 | 61.6 | 64.1 | 65.1 | 67.6 | (0.6 | ) | ||||||||||||||||||||
Kindred Healthcare Reports First Quarter 2017 Results
Page 11
May 3, 2017
KINDRED HEALTHCARE, INC.
Condensed Business Segment Data (Continued)
(Unaudited)
| 2016 Quarters | First Quarter |
First quarter % change v. |
||||||||||||||||||||||||||
| First | Second | Third | Fourth | Year | 2017 | prior year | ||||||||||||||||||||||
| Same-hospital data (a): |
||||||||||||||||||||||||||||
| End of period data: |
||||||||||||||||||||||||||||
| Number of transitional care hospitals |
78 | 78 | 78 | 78 | 78 | |||||||||||||||||||||||
| Number of licensed beds |
5,960 | 5,960 | 5,960 | 5,960 | 5,960 | |||||||||||||||||||||||
| Revenues |
$ | 563,201 | $ | 557,989 | $ | 508,608 | $ | 521,244 | $ | 2,151,042 | $ | 528,994 | (6.1 | ) | ||||||||||||||
| Revenue mix %: |
||||||||||||||||||||||||||||
| Medicare |
58.0 | 55.4 | 54.1 | 53.0 | 55.2 | 52.3 | ||||||||||||||||||||||
| Medicaid |
3.7 | 3.9 | 3.7 | 4.5 | 3.9 | 4.1 | ||||||||||||||||||||||
| Medicare Advantage |
11.3 | 11.7 | 12.3 | 11.0 | 11.6 | 12.1 | ||||||||||||||||||||||
| Medicaid Managed |
5.8 | 6.6 | 7.8 | 8.2 | 7.1 | 9.3 | ||||||||||||||||||||||
| Commercial insurance and other |
21.2 | 22.4 | 22.1 | 23.3 | 22.2 | 22.2 | ||||||||||||||||||||||
| Admissions: |
||||||||||||||||||||||||||||
| Medicare |
7,802 | 7,209 | 6,882 | 7,132 | 29,025 | 7,319 | (6.2 | ) | ||||||||||||||||||||
| Medicaid |
395 | 342 | 343 | 336 | 1,416 | 354 | (10.4 | ) | ||||||||||||||||||||
| Medicare Advantage |
1,219 | 1,148 | 1,165 | 1,187 | 4,719 | 1,315 | 7.9 | |||||||||||||||||||||
| Medicaid Managed |
632 | 702 | 792 | 787 | 2,913 | 849 | 34.3 | |||||||||||||||||||||
| Commercial insurance and other |
1,567 | 1,528 | 1,462 | 1,456 | 6,013 | 1,566 | (0.1 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| 11,615 | 10,929 | 10,644 | 10,898 | 44,086 | 11,403 | (1.8 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Patient days: |
||||||||||||||||||||||||||||
| Medicare |
200,004 | 190,955 | 177,079 | 180,794 | 748,832 | 182,442 | (8.8 | ) | ||||||||||||||||||||
| Medicaid |
14,670 | 13,547 | 12,085 | 12,175 | 52,477 | 13,587 | (7.4 | ) | ||||||||||||||||||||
| Medicare Advantage |
38,617 | 40,835 | 38,462 | 36,900 | 154,814 | 39,924 | 3.4 | |||||||||||||||||||||
| Medicaid Managed |
22,421 | 24,893 | 26,698 | 29,284 | 103,296 | 32,701 | 45.8 | |||||||||||||||||||||
| Commercial insurance and other |
53,613 | 53,821 | 51,772 | 53,391 | 212,597 | 52,473 | (2.1 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| 329,325 | 324,051 | 306,096 | 312,544 | 1,272,016 | 321,127 | (2.5 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Average length of stay: |
||||||||||||||||||||||||||||
| Medicare |
25.6 | 26.5 | 25.7 | 25.3 | 25.8 | 24.9 | (2.7 | ) | ||||||||||||||||||||
| Medicaid |
37.1 | 39.6 | 35.2 | 36.2 | 37.1 | 38.4 | 3.5 | |||||||||||||||||||||
| Medicare Advantage |
31.7 | 35.6 | 33.0 | 31.1 | 32.8 | 30.4 | (4.1 | ) | ||||||||||||||||||||
| Medicaid Managed |
35.5 | 35.5 | 33.7 | 37.2 | 35.5 | 38.5 | 8.5 | |||||||||||||||||||||
| Commercial insurance and other |
34.2 | 35.2 | 35.4 | 36.7 | 35.4 | 33.5 | (2.0 | ) | ||||||||||||||||||||
| Weighted average |
28.4 | 29.7 | 28.8 | 28.7 | 28.9 | 28.2 | (0.7 | ) | ||||||||||||||||||||
| Revenues per admission: |
||||||||||||||||||||||||||||
| Medicare |
$ | 41,876 | $ | 42,883 | $ | 39,959 | $ | 38,720 | $ | 40,896 | $ | 37,829 | (9.7 | ) | ||||||||||||||
| Medicaid |
53,232 | 62,945 | 54,765 | 70,288 | 59,996 | 61,194 | 15.0 | |||||||||||||||||||||
| Medicare Advantage |
51,955 | 57,112 | 53,701 | 48,440 | 52,757 | 48,690 | (6.3 | ) | ||||||||||||||||||||
| Medicaid Managed |
51,511 | 52,419 | 50,027 | 54,286 | 52,076 | 57,871 | 12.3 | |||||||||||||||||||||
| Commercial insurance and other |
76,305 | 81,779 | 77,047 | 83,278 | 79,565 | 74,905 | (1.8 | ) | ||||||||||||||||||||
| Weighted average |
48,489 | 51,056 | 47,784 | 47,829 | 48,792 | 46,391 | (4.3 | ) | ||||||||||||||||||||
| Revenues per patient day: |
||||||||||||||||||||||||||||
| Medicare |
$ | 1,634 | $ | 1,619 | $ | 1,553 | $ | 1,527 | $ | 1,585 | $ | 1,518 | (7.1 | ) | ||||||||||||||
| Medicaid |
1,433 | 1,589 | 1,554 | 1,940 | 1,619 | 1,594 | 11.2 | |||||||||||||||||||||
| Medicare Advantage |
1,640 | 1,606 | 1,627 | 1,558 | 1,608 | 1,604 | (2.2 | ) | ||||||||||||||||||||
| Medicaid Managed |
1,452 | 1,478 | 1,484 | 1,459 | 1,469 | 1,502 | 3.4 | |||||||||||||||||||||
| Commercial insurance and other |
2,230 | 2,322 | 2,176 | 2,271 | 2,250 | 2,235 | 0.2 | |||||||||||||||||||||
| Weighted average |
1,710 | 1,722 | 1,662 | 1,668 | 1,691 | 1,647 | (3.7 | ) | ||||||||||||||||||||
| Average daily census |
3,619 | 3,561 | 3,327 | 3,397 | 3,475 | 3,568 | (1.4 | ) | ||||||||||||||||||||
| (a) | All historical statistics have been adjusted to present the ongoing hospital division portfolio excluding four hospitals acquired during the second quarter of 2016. See reconciliation of same-hospital revenues to reported revenues for the Hospital Division on page 16. |
Kindred Healthcare Reports First Quarter 2017 Results
Page 12
May 3, 2017
KINDRED HEALTHCARE, INC.
Condensed Business Segment Data (Continued)
(Unaudited)
| 2016 Quarters | First Quarter |
First quarter % change v. |
||||||||||||||||||||||||||
| First | Second | Third | Fourth | Year | 2017 | prior year | ||||||||||||||||||||||
| Kindred Rehabilitation Services: |
||||||||||||||||||||||||||||
| Kindred Hospital Rehabilitation Services: |
||||||||||||||||||||||||||||
| Freestanding IRFs: |
||||||||||||||||||||||||||||
| End of period data: |
||||||||||||||||||||||||||||
| Number of IRFs |
19 | 19 | 19 | 19 | 19 | |||||||||||||||||||||||
| Number of licensed beds |
969 | 969 | 969 | 995 | 995 | |||||||||||||||||||||||
| Discharges (a) |
4,448 | 4,646 | 4,644 | 4,671 | 18,409 | 4,775 | 7.4 | |||||||||||||||||||||
| Same-hospital discharges (a) |
4,295 | 4,535 | 4,546 | 4,538 | 17,914 | 4,393 | 2.3 | |||||||||||||||||||||
| Occupancy % (a) |
70.6 | 70.6 | 68.8 | 66.5 | 69.1 | 71.4 | 1.1 | |||||||||||||||||||||
| Average length of stay (a) |
13.2 | 12.9 | 12.7 | 12.6 | 12.8 | 12.8 | (3.0 | ) | ||||||||||||||||||||
| Revenue per discharge (a) |
$ | 19,731 | $ | 19,318 | $ | 19,599 | $ | 19,486 | $ | 19,531 | $ | 20,097 | 1.9 | |||||||||||||||
| Contract services: |
||||||||||||||||||||||||||||
| Sites of service (at end of period): |
||||||||||||||||||||||||||||
| Inpatient rehabilitation units |
104 | 105 | 104 | 102 | 101 | |||||||||||||||||||||||
| LTAC hospitals |
119 | 121 | 120 | 119 | 119 | |||||||||||||||||||||||
| Sub-acute units |
7 | 7 | 7 | 5 | 7 | |||||||||||||||||||||||
| Outpatient units |
139 | 138 | 139 | 132 | 129 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| 369 | 371 | 370 | 358 | 356 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Revenue per site |
$ | 211,417 | $ | 215,798 | $ | 210,810 | $ | 220,733 | $ | 858,758 | $ | 227,100 | 7.4 | |||||||||||||||
| RehabCare: |
||||||||||||||||||||||||||||
| Sites of service (at end of period) |
1,767 | 1,759 | 1,754 | 1,718 | 1,703 | |||||||||||||||||||||||
| Revenue per site |
$ | 115,590 | $ | 111,470 | $ | 109,738 | $ | 111,460 | $ | 448,258 | $ | 117,458 | 1.6 | |||||||||||||||
| Nursing center division: |
||||||||||||||||||||||||||||
| End of period data: |
||||||||||||||||||||||||||||
| Number of nursing centers |
92 | 92 | 91 | 91 | 91 | |||||||||||||||||||||||
| Number of licensed beds |
11,815 | 11,815 | 11,568 | 11,568 | 11,568 | |||||||||||||||||||||||
| Admissions (b) |
9,815 | 9,480 | 9,698 | 9,409 | 38,402 | 9,787 | (0.3 | ) | ||||||||||||||||||||
| Medicare average length of stay (b) |
28.2 | 28.4 | 27.4 | 26.7 | 27.7 | 26.7 | (5.3 | ) | ||||||||||||||||||||
| Patient days (b) |
846,578 | 842,681 | 845,037 | 846,361 | 3,380,657 | 829,970 | (2.0 | ) | ||||||||||||||||||||
| Revenues per patient day (b) |
$ | 322 | $ | 323 | $ | 320 | $ | 323 | $ | 322 | $ | 329 | 2.2 | |||||||||||||||
| Average daily census (b) |
9,303 | 9,260 | 9,185 | 9,200 | 9,237 | 9,222 | (0.9 | ) | ||||||||||||||||||||
| Occupancy % (b) |
77.3 | 76.7 | 77.5 | 77.9 | 77.4 | 78.1 | 1.0 | |||||||||||||||||||||
| (a) | Excludes non-consolidating IRF. |
| (b) | Excludes managed facilities. |
Kindred Healthcare Reports First Quarter 2017 Results
Page 13
May 3, 2017
Forward-Looking Statements
This earnings release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, but are not limited to, all statements regarding the Company’s ability to exit the skilled nursing facility business and the expected timing of such exit, as well as the Company’s ability to realize the anticipated benefits, sale proceeds, cost savings and strategic gains from this initiative, all statements regarding the Company’s expected future financial position, results of operations, cash flows, dividends, financing plans, business strategy, budgets, capital expenditures, competitive positions, growth opportunities, plans and objectives of management, government investigations, regulatory matters, and statements containing words such as “anticipate,” “approximate,” “believe,” “plan,” “estimate,” “expect,” “project,” “could,” “would,” “should,” “will,” “intend,” “hope,” “may,” “potential,” “upside,” and other similar expressions. Statements in this earnings release concerning the Company’s business outlook or future economic performance, anticipated profitability, revenues, expenses, dividends or other financial items, and product or services line growth, and expected outcome of government investigations and other regulatory matters, together with other statements that are not historical facts, are forward-looking statements that are estimates reflecting the best judgment of the Company based upon currently available information.
Such forward-looking statements are inherently uncertain, and stockholders and other potential investors must recognize that actual results may differ materially from the Company’s expectations as a result of a variety of factors. Such forward-looking statements are based upon management’s 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 Company’s actual results, performance, or plans to differ materially from any future results, performance or plans expressed or implied by such forward-looking statements. These statements involve risks, uncertainties, and other factors detailed from time to time in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the Securities and Exchange Commission (the “SEC”).
Many of these factors are beyond the Company’s 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.
Non-GAAP Measures
In addition to the results provided in accordance with GAAP, the Company has provided information in this earnings release to compute certain non-GAAP measures. The use of these non-GAAP measures are not intended to replace the presentation of the Company’s financial results in accordance with GAAP. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in the following pages of this earnings release.
During the first quarter of 2017, the Company updated its definitions of “core” non-GAAP measures as a result of the Company’s continued review of its presentation of non-GAAP measures in response to the guidance issued by the SEC in May 2016. As updated, the Company’s core non-GAAP measures, including core net income attributable to Kindred, core EBITDAR, core diluted EPS, core operating cash flows and core free cash flows, no longer exclude (1) transaction, integration, research and development, and litigation contingency expenses that are not individually material, (2) non-restructuring related facility closing charges, and (3) non-executive or non-restructuring related severance, retirement and retention costs. For comparability, “core” results for 2016 have been revised to conform to the current year presentation.
EBITDAR: The Company defines EBITDAR as earnings before interest, income taxes, depreciation, amortization and rent, and believes that the presentation of EBITDAR is useful to the investors because creditors, securities analysts and investors use EBITDAR as a measure of earnings used to compare the performance of companies in the healthcare industry before consideration of the capital structure of fixed assets and financing costs, which can vary significantly among companies.
For each of the Company’s segments, EBITDAR is a measure of performance used by the Company’s chief operating decision makers in accordance with “Accounting Standard Codification 280—Segment Reporting.” In this context, the Company defines segment EBITDAR as earnings before interest, income taxes, depreciation, amortization, and rent, excluding litigation contingency expense, impairment charges, restructuring charges, transaction costs, and the allocation of support center overhead.
Kindred Healthcare Reports First Quarter 2017 Results
Page 14
May 3, 2017
Non-GAAP Measures (Continued)
Core Operating Results: The Company calculates core operating results, including core net income attributable to Kindred, core EBITDAR and core diluted EPS, by excluding charges related to impairments, business interruption settlements, restructuring charges, debt amendment costs, executive or restructuring-related severance, retirement and retention costs, restructuring-related facility closing charges, and material transaction, integration, litigation, and research and development costs. The Company believes that the presentation of core operating results provides additional information to investors to facilitate the comparison between periods by excluding certain charges that are not representative of its ongoing operations due to the materiality and nature of the charges. The Company’s management uses core net income attributable to Kindred, core EBITDAR and core diluted EPS as measures of operational performance that are meaningful to investors, and for the measurement of internal incentive compensation goals, in addition to other measures. The Company uses these measures to assess the relative performance and attainment of internal incentive compensation goals of its operating divisions, as well as the employees that operate these businesses. In addition, the Company believes these measures are important, because securities analysts and investors use these measures to compare the Company’s performance to other companies in the healthcare industry.
Same-Hospital Revenues: The same-hospital revenues are calculated by excluding from the Company’s Hospital Division revenues the results from four hospitals acquired in 2016, 15 hospitals sold in 2016, three hospitals that closed during 2016, and two hospitals that closed during 2015. The Company believes the presentation of same-hospital revenues provides investors, equity analysts and others with useful information regarding the performance of the Company’s hospital operations that are comparable for the periods presented.
For EBITDAR, core net income attributable to Kindred, and core EBITDAR, the Company believes that income (loss) from continuing operations is the most comparable GAAP measure. For core diluted EPS, the Company believes that GAAP diluted earnings (loss) per share from continuing operations is the most comparable GAAP measure. Readers of the Company’s financial information should consider income (loss) from continuing operations and diluted earnings (loss) per share from continuing operations as important measures of the Company’s financial performance, because they provide the most complete measures of its performance. For same-hospital revenues, the Company believes that reported hospital segment revenues is the most comparable GAAP measure. Readers of the Company’s financial information should consider reported hospital segment revenues as an important measure of the Company’s Hospital Division financial performance because it provides the most complete measure of its performance. Operating results presented on a core basis, as well as a same-hospital basis, should be considered in addition to, not as a substitute for, or superior to, financial measures based upon GAAP as an indicator of operating performance.
Also in this earnings release, the Company provides the financial measures of operating cash flows and free cash flows excluding certain items, which the Company refers to as core operating cash flows and core free cash flows, respectively.
Core Operating Cash Flows: The Company defines core operating cash flows as operating cash flows excluding payments related to business interruption settlements, restructuring charges, debt amendment costs, executive or restructuring-related severance, retirement and retention costs, restructuring-related facility closing charges, and material transaction, integration, litigation, and research and development costs, net of income tax benefits. The Company believes that core operating cash flows provide important information to investors for comparability to other companies that use similar measures. Management uses core operating cash flows to evaluate consolidated operating performance and in making decisions related to acquisitions, development capital expenditures, dividends, long-term debt repayments and other uses.
Core Free Cash Flows: The Company defines core free cash flows as operating cash flows excluding payments related to business interruption settlements, restructuring charges, debt amendment costs, executive or restructuring-related severance, retirement and retention costs, restructuring-related facility closing charges, and material transaction, integration, litigation, and research and development costs, net of income tax benefits but including routine capital expenditures and distributions to noncontrolling interests. The Company believes that core free cash flows provide important information to investors for comparability to other companies that use similar measures. Management uses core free cash flows in making decisions related to acquisitions, development capital expenditures, dividends, long-term debt repayments and other uses.
The Company recognizes that core operating cash flows and core free cash flows are non-GAAP measures and are not intended to replace the presentation of the Company’s cash flows in accordance with GAAP. For core operating cash flows and core free cash flows, the Company believes net cash flows provided by operating activities is the most comparable GAAP measure. Readers of the Company’s financial information should consider net cash flows provided by operating activities as an important measure because it provides the most complete measure of cash provided by operating activities. Core operating cash flows and core free cash flows should be considered in addition to, not as a substitute for, or superior to, financial measures based upon GAAP as an indicator of the Company’s cash flows provided by operating activities.
Kindred Healthcare Reports First Quarter 2017 Results
Page 15
May 3, 2017
KINDRED HEALTHCARE, INC.
Reconciliation of GAAP Results to Non-GAAP Measures
(Unaudited)
(In thousands, except per share amounts and statistics)
In addition to the results provided in accordance with GAAP, the Company has provided information in this earnings release to compute certain non-GAAP measures for the three months ended March 31, 2017 and 2016 before certain charges or on a core basis. The charges that were excluded from core operating results are denoted in the tables below.
The income tax benefit associated with the excluded charges, including the deferred tax valuation allowance for the three months ended March 31, 2017, was calculated using an effective income tax rate of 43.5% and 34.5% for the three months ended March 31, 2017 and 2016, respectively. The difference in the effective income tax rate compared to the same prior year period is primarily attributable to the deferred tax valuation allowance.
| Three months ended March 31, |
||||||||
| 2017 | 2016 | |||||||
| Reconciliation of income from continuing operations before charges: |
||||||||
| As reported: |
||||||||
| Income (loss) from continuing operations attributable to Kindred |
($6,136 | ) | $13,323 | |||||
| Diluted income (loss) per common share from continuing operations |
($0.07 | ) | $0.15 | |||||
| Weighted average diluted shares outstanding |
87,085 | 87,249 | ||||||
| Detail of charges: |
||||||||
| Restructuring charges: |
||||||||
| Facility/branch divestitures and closings |
($5,487 | ) | ($341 | ) | ||||
| Retention and severance costs |
(8,548 | ) | (924 | ) | ||||
| Transaction costs |
(232 | ) | (436 | ) | ||||
|
|
|
|
|
|||||
| (14,267 | ) | (1,701 | ) | |||||
| Lease termination costs (charged to rent restructuring charges) |
(1,905 | ) | (251 | ) | ||||
| Impairment charges |
(1,157 | ) | (7,788 | ) | ||||
| Research and development |
— | (863 | ) | |||||
| Litigation contingency expense |
— | (1,025 | ) | |||||
| Business interruption settlements |
— | 1,138 | ||||||
| Gentiva transaction costs: |
||||||||
| Professional and consulting fees |
— | (1,048 | ) | |||||
| Severance and retention |
— | (555 | ) | |||||
|
|
|
|
|
|||||
| (17,329 | ) | (12,093 | ) | |||||
| Income tax benefit |
6,819 | 4,177 | ||||||
| Deferred tax valuation allowance |
716 | — | ||||||
|
|
|
|
|
|||||
| Charges net of income taxes |
(9,794 | ) | (7,916 | ) | ||||
| Allocation to participating unvested restricted stockholders |
— | 117 | ||||||
|
|
|
|
|
|||||
| Available to common stockholders |
($9,794 | ) | ($7,799 | ) | ||||
|
|
|
|
|
|||||
| Diluted loss per common share related to charges |
($0.11 | ) | ($0.09 | ) | ||||
| Weighted average diluted shares outstanding |
87,744 | 87,249 | ||||||
| Core: |
||||||||
| Income from continuing operations attributable to Kindred before charges |
$3,658 | $21,239 | ||||||
| Diluted earnings per common share from continuing operations before charges (a) |
$0.04 | $0.24 | ||||||
| Weighted average diluted shares outstanding used to compute earnings per common share from continuing operations before charges |
87,744 | 87,249 | ||||||
| Reconciliation of effective income tax rate before charges: |
||||||||
| Effective income tax rate before charges |
34.6 | % | 32.2 | % | ||||
| Impact of charges on effective income tax rate |
-13.9 | % | -0.8 | % | ||||
|
|
|
|
|
|||||
| Reported effective income tax rate |
20.7 | % | 31.4 | % | ||||
|
|
|
|
|
|||||
| (a) | For purposes of computing diluted earnings per common share before charges, income from continuing operations before charges was reduced by $0.1 million and $0.3 million for the three months ended March 31, 2017 and 2016, respectively, for the allocation of income to participating unvested restricted stockholders. |
Kindred Healthcare Reports First Quarter 2017 Results
Page 16
May 3, 2017
KINDRED HEALTHCARE, INC.
Reconciliation of GAAP Results to Non-GAAP Measures (Continued)
(Unaudited)
(In thousands)
Home health revenues (excluding community care) for each historical period follows:
| 2016 Quarters | First Quarter 2017 |
First quarter % change v. prior year |
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| First | Second | Third | Fourth | Year | ||||||||||||||||||||||||
| Kindred |
$ | 363,730 | $ | 370,327 | $ | 373,980 | $ | 369,198 | $ | 1,477,235 | $ | 376,736 | 3.6 | |||||||||||||||
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A reconciliation of reported revenues to same-hospital revenues for the Hospital Division for each historical period follows:
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| |||||||||||||||||||||||||||
| 2016 Quarters | First Quarter 2017 |
First quarter % change v. prior year |
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| First | Second | Third | Fourth | Year | ||||||||||||||||||||||||
| Reported revenues |
$ | 643,299 | $ | 633,695 | $ | 575,323 | $ | 530,746 | $ | 2,383,063 | $ | 540,280 | (16.0 | ) | ||||||||||||||
| Hospitals acquired during 2016 (a) |
— | (2,836 | ) | (10,655 | ) | (9,958 | ) | (23,449 | ) | (11,717 | ) | |||||||||||||||||
| Hospitals sold during 2016 (b) |
(71,941 | ) | (64,084 | ) | (47,098 | ) | 732 | (182,391 | ) | 449 | ||||||||||||||||||
| Hospitals closed during 2016 (c) |
(8,271 | ) | (8,864 | ) | (8,908 | ) | (183 | ) | (26,226 | ) | (32 | ) | ||||||||||||||||
| Hospitals closed during 2015 (d) |
114 | 78 | (54 | ) | (93 | ) | 45 | 14 | ||||||||||||||||||||
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| Same-hospital revenues |
$ | 563,201 | $ | 557,989 | $ | 508,608 | $ | 521,244 | $ | 2,151,042 | $ | 528,994 | (6.1 | ) | ||||||||||||||
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| (a) | Four hospitals acquired during the second quarter of 2016. |
| (b) | Three hospitals sold during the second quarter of 2016 and 12 hospitals sold during the fourth quarter of 2016. |
| (c) | Three hospitals closed during the third quarter of 2016. |
| (d) | One hospital closed during the second quarter of 2015 and one hospital closed during the third quarter of 2015. |
Kindred Healthcare Reports First Quarter 2017 Results
Page 17
May 3, 2017
KINDRED HEALTHCARE, INC.
Reconciliation of GAAP Results to Non-GAAP Measures (Continued)
(Unaudited)
(In thousands, except per share amounts)
| Three months ended March 31, 2017 | ||||||||||||||||||||||||
| Charges | ||||||||||||||||||||||||
| As reported |
Impairment charges |
Restructuring charges |
Deferred tax valuation allowance |
Total | Before charges (“core”) (a) |
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| Income (loss) from continuing operations: |
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| Segment EBITDAR: |
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| Kindred at Home: |
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| Home health |
$ | 63,750 | $ | — | $ | — | $ | — | $ | — | $ | 63,750 | ||||||||||||
| Hospice |
27,581 | — | — | — | — | 27,581 | ||||||||||||||||||
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| 91,331 | — | — | — | — | 91,331 | |||||||||||||||||||
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| Hospital division |
91,169 | — | — | — | — | 91,169 | ||||||||||||||||||
| Kindred Rehabilitation Services: |
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| Kindred Hospital Rehabilitation Services |
51,403 | — | — | — | — | 51,403 | ||||||||||||||||||
| RehabCare |
10,609 | — | — | — | — | 10,609 | ||||||||||||||||||
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| 62,012 | — | — | — | — | 62,012 | |||||||||||||||||||
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| Nursing center division |
31,718 | — | — | — | — | 31,718 | ||||||||||||||||||
| Support center |
(58,391 | ) | — | — | — | — | (58,391 | ) | ||||||||||||||||
| Impairment charges |
(1,157 | ) | 1,157 | — | — | 1,157 | — | |||||||||||||||||
| Restructuring charges |
(14,267 | ) | — | 14,267 | — | 14,267 | — | |||||||||||||||||
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| EBITDAR |
202,415 | 1,157 | 14,267 | — | 15,424 | 217,839 | ||||||||||||||||||
| Rent |
(95,612 | ) | — | — | — | — | (95,612 | ) | ||||||||||||||||
| Restructuring charges - rent |
(1,905 | ) | — | 1,905 | — | 1,905 | — | |||||||||||||||||
| Depreciation and amortization |
(34,960 | ) | — | — | — | — | (34,960 | ) | ||||||||||||||||
| Interest, net |
(58,807 | ) | — | — | — | — | (58,807 | ) | ||||||||||||||||
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| Income from continuing operations before income taxes |
11,131 | 1,157 | 16,172 | — | 17,329 | 28,460 | ||||||||||||||||||
| Provision for income taxes |
2,302 | 455 | 6,364 | 716 | 7,535 | 9,837 | ||||||||||||||||||
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| 8,829 | $ | 702 | $ | 9,808 | $ | (716 | ) | $ | 9,794 | 18,623 | ||||||||||||||
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| Noncontrolling interests |
(14,965 | ) | (14,965 | ) | ||||||||||||||||||||
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| Income (loss) attributable to Kindred |
$ | (6,136 | ) | $ | 3,658 | |||||||||||||||||||
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| Diluted earnings (loss) per common share |
$ | (0.07 | ) | $ | 0.04 | |||||||||||||||||||
| Diluted shares used in computing earnings (loss) per common share |
87,085 | 87,744 | ||||||||||||||||||||||
| Three months ended March 31, 2016 | ||||||||||||||||||||||||||||||||||||
| Charges | ||||||||||||||||||||||||||||||||||||
| As reported |
Business interruption settlements |
Litigation contingency |
Impairment charges |
Research and development |
Restructuring charges |
Gentiva transaction and integration |
Total | Before charges (“core”) (a) |
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| Income from continuing operations: |
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| Segment EBITDAR: |
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| Kindred at Home: |
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| Home health |
$ | 66,941 | $ | (1,138 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (1,138 | ) | $ | 65,803 | ||||||||||||||||
| Hospice |
24,866 | — | — | — | — | — | — | — | 24,866 | |||||||||||||||||||||||||||
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| 91,807 | (1,138 | ) | — | — | — | — | — | (1,138 | ) | 90,669 | ||||||||||||||||||||||||||
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| Hospital division |
135,495 | — | — | — | — | — | — | — | 135,495 | |||||||||||||||||||||||||||
| Kindred Rehabilitation Services: |
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| Kindred Hospital Rehabilitation Services |
47,870 | — | — | — | — | — | — | — | 47,870 | |||||||||||||||||||||||||||
| RehabCare |
11,987 | — | — | — | — | — | — | — | 11,987 | |||||||||||||||||||||||||||
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| 59,857 | — | — | — | — | — | — | — | 59,857 | ||||||||||||||||||||||||||||
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| Nursing center division |
30,100 | — | — | — | — | — | — | — | 30,100 | |||||||||||||||||||||||||||
| Support center |
(70,808 | ) | — | — | — | 863 | — | — | 863 | (69,945 | ) | |||||||||||||||||||||||||
| Litigation contingency expense |
(1,910 | ) | — | 1,025 | — | — | — | — | 1,025 | (885 | ) | |||||||||||||||||||||||||
| Impairment charges |
(7,788 | ) | — | — | 7,788 | — | — | — | 7,788 | — | ||||||||||||||||||||||||||
| Restructuring charges |
(1,701 | ) | — | — | — | — | 1,701 | — | 1,701 | — | ||||||||||||||||||||||||||
| Transaction costs |
(1,685 | ) | — | — | — | — | — | 1,603 | 1,603 | (82 | ) | |||||||||||||||||||||||||
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| EBITDAR |
233,367 | (1,138 | ) | 1,025 | 7,788 | 863 | 1,701 | 1,603 | 11,842 | 245,209 | ||||||||||||||||||||||||||
| Rent |
(97,517 | ) | — | — | — | — | — | — | — | (97,517 | ) | |||||||||||||||||||||||||
| Restructuring charges - rent |
(251 | ) | — | — | — | — | 251 | — | 251 | — | ||||||||||||||||||||||||||
| Depreciation and amortization |
(40,681 | ) | — | — | — | — | — | — | — | (40,681 | ) | |||||||||||||||||||||||||
| Interest, net |
(57,245 | ) | — | — | — | — | — | — | — | (57,245 | ) | |||||||||||||||||||||||||
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| Income from continuing operations before income taxes |
37,673 | (1,138 | ) | 1,025 | 7,788 | 863 | 1,952 | 1,603 | 12,093 | 49,766 | ||||||||||||||||||||||||||
| Provision for income taxes |
11,836 | (393 | ) | 354 | 2,690 | 298 | 674 | 554 | 4,177 | 16,013 | ||||||||||||||||||||||||||
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| 25,837 | $ | (745 | ) | $ | 671 | $ | 5,098 | $ | 565 | $ | 1,278 | $ | 1,049 | $ | 7,916 | 33,753 | ||||||||||||||||||||
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| Noncontrolling interests |
(12,514 | ) | (12,514 | ) | ||||||||||||||||||||||||||||||||
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| Income attributable to Kindred |
$ | 13,323 | $ | 21,239 | ||||||||||||||||||||||||||||||||
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| Diluted earnings per common share |
$ | 0.15 | $ | 0.24 | ||||||||||||||||||||||||||||||||
| Diluted shares used in computing earnings per common share |
87,249 | 87,249 | ||||||||||||||||||||||||||||||||||
| (a) | During the first quarter of 2017, the Company updated its definitions of “core” non-GAAP measures. See “Non-GAAP Measures” beginning on page 13 for a discussion regarding the updated definitions. For comparability, “core” results for 2016 have been revised to conform to the current year presentation. |
Kindred Healthcare Reports First Quarter 2017 Results
Page 18
May 3, 2017
KINDRED HEALTHCARE, INC.
Reconciliation of GAAP Results to Non-GAAP Measures (Continued)
(Unaudited)
(In thousands, except per share amounts)
| Three months ended June 30, 2016 | ||||||||||||||||||||||||||||||||||||||||
| Charges | ||||||||||||||||||||||||||||||||||||||||
| As reported |
Business interruption settlements |
Litigation contingency |
Impairment charges |
Research and development |
Debt amendment |
Restructuring charges |
Gentiva transaction and integration |
Total | Before charges (“core”) (a) |
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| Income from continuing operations: |
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| Segment EBITDAR: |
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| Kindred at Home: |
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| Home health |
$ | 76,030 | $ | (171 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (171 | ) | $ | 75,859 | ||||||||||||||||||
| Hospice |
31,329 | — | — | — | — | — | — | — | — | 31,329 | ||||||||||||||||||||||||||||||
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| 107,359 | (171 | ) | — | — | — | — | — | — | (171 | ) | 107,188 | |||||||||||||||||||||||||||||
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| Hospital division |
125,932 | — | — | — | — | — | — | — | — | 125,932 | ||||||||||||||||||||||||||||||
| Kindred Rehabilitation Services: |
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| Kindred Hospital Rehabilitation Services |
50,469 | — | — | — | — | — | — | — | — | 50,469 | ||||||||||||||||||||||||||||||
| RehabCare |
13,269 | — | — | — | — | — | — | — | — | 13,269 | ||||||||||||||||||||||||||||||
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| 63,738 | — | — | — | — | — | — | — | — | 63,738 | |||||||||||||||||||||||||||||||
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| Nursing center division |
33,662 | — | — | — | — | — | — | — | — | 33,662 | ||||||||||||||||||||||||||||||
| Support center |
(66,804 | ) | — | — | — | 3,076 | 1,103 | — | — | 4,179 | (62,625 | ) | ||||||||||||||||||||||||||||
| Litigation contingency expense |
(930 | ) | — | 750 | — | — | — | — | — | 750 | (180 | ) | ||||||||||||||||||||||||||||
| Impairment charges |
(6,131 | ) | — | — | 6,131 | — | — | — | — | 6,131 | — | |||||||||||||||||||||||||||||
| Restructuring charges |
(4,346 | ) | — | — | — | — | — | 4,346 | — | 4,346 | — | |||||||||||||||||||||||||||||
| Transaction costs |
(1,846 | ) | — | — | — | — | — | — | 1,674 | 1,674 | (172 | ) | ||||||||||||||||||||||||||||
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| EBITDAR |
250,634 | (171 | ) | 750 | 6,131 | 3,076 | 1,103 | 4,346 | 1,674 | 16,909 | 267,543 | |||||||||||||||||||||||||||||
| Rent |
(100,093 | ) | — | — | — | — | — | — | — | — | (100,093 | ) | ||||||||||||||||||||||||||||
| Restructuring charges - rent |
(462 | ) | — | — | — | — | — | 462 | — | 462 | — | |||||||||||||||||||||||||||||
| Depreciation and amortization |
(40,257 | ) | — | — | — | — | — | — | — | — | (40,257 | ) | ||||||||||||||||||||||||||||
| Interest, net |
(57,559 | ) | — | — | — | — | — | — | — | — | (57,559 | ) | ||||||||||||||||||||||||||||
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| Income from continuing operations before income taxes |
52,263 | (171 | ) | 750 | 6,131 | 3,076 | 1,103 | 4,808 | 1,674 | 17,371 | 69,634 | |||||||||||||||||||||||||||||
| Provision for income taxes |
17,882 | (129 | ) | (1,511 | ) | 4,633 | 2,324 | 833 | (3,962 | ) | 1,265 | 3,453 | 21,335 | |||||||||||||||||||||||||||
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| 34,381 | (42 | ) | 2,261 | 1,498 | 752 | 270 | 8,770 | 409 | 13,918 | 48,299 | ||||||||||||||||||||||||||||||
| Noncontrolling interests |
(13,522 | ) | — | — | (1,016 | ) | — | — | — | — | (1,016 | ) | (14,538 | ) | ||||||||||||||||||||||||||
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| Income attributable to Kindred |
$ | 20,859 | $ | (42 | ) | $ | 2,261 | $ | 482 | $ | 752 | $ | 270 | $ | 8,770 | $ | 409 | $ | 12,902 | $ | 33,761 | |||||||||||||||||||
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| Diluted earnings per common share |
$ | 0.23 | $ | 0.38 | ||||||||||||||||||||||||||||||||||||
| Diluted shares used in computing earnings per common share |
87,500 | 87,500 | ||||||||||||||||||||||||||||||||||||||
| Three months ended September 30, 2016 | ||||||||||||||||||||||||||||||||
| Charges | ||||||||||||||||||||||||||||||||
| As reported | Impairment charges |
Research and development |
Restructuring charges |
Gentiva transaction and integration |
Deferred tax valuation allowance |
Total | Before charges (“core”) (a) |
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| Income (loss) from continuing operations: |
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| Segment EBITDAR: |
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| Kindred at Home: |
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| Home health |
$ | 75,073 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 75,073 | ||||||||||||||||
| Hospice |
31,326 | — | — | — | — | — | — | 31,326 | ||||||||||||||||||||||||
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| 106,399 | — | — | — | — | — | — | 106,399 | |||||||||||||||||||||||||
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| Hospital division |
82,752 | — | — | — | — | — | — | 82,752 | ||||||||||||||||||||||||
| Kindred Rehabilitation Services: |
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| Kindred Hospital Rehabilitation Services |
49,470 | — | — | — | — | — | — | 49,470 | ||||||||||||||||||||||||
| RehabCare |
9,248 | — | — | — | — | — | — | 9,248 | ||||||||||||||||||||||||
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| 58,718 | — | — | — | — | — | — | 58,718 | |||||||||||||||||||||||||
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| Nursing center division |
29,922 | — | — | — | — | — | — | 29,922 | ||||||||||||||||||||||||
| Support center |
(61,751 | ) | — | 3,288 | — | — | — | 3,288 | (58,463 | ) | ||||||||||||||||||||||
| Impairment charges |
(324,289 | ) | 324,289 | — | — | — | — | 324,289 | — | |||||||||||||||||||||||
| Restructuring charges |
(22,813 | ) | — | — | 22,813 | — | — | 22,813 | — | |||||||||||||||||||||||
| Transaction costs |
(2,982 | ) | — | — | — | 1,250 | — | 1,250 | (1,732 | ) | ||||||||||||||||||||||
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| EBITDAR |
(134,044 | ) | 324,289 | 3,288 | 22,813 | 1,250 | — | 351,640 | 217,596 | |||||||||||||||||||||||
| Rent |
(98,415 | ) | — | — | — | 272 | — | 272 | (98,143 | ) | ||||||||||||||||||||||
| Restructuring charges - rent |
(58,650 | ) | — | — | 58,650 | — | — | 58,650 | — | |||||||||||||||||||||||
| Depreciation and amortization |
(40,382 | ) | — | — | — | — | — | — | (40,382 | ) | ||||||||||||||||||||||
| Interest, net |
(58,052 | ) | — | — | — | — | — | — | (58,052 | ) | ||||||||||||||||||||||
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| Income (loss) from continuing operations before income taxes |
(389,543 | ) | 324,289 | 3,288 | 81,463 | 1,522 | — | 410,562 | 21,019 | |||||||||||||||||||||||
| Provision for income taxes |
281,752 | 58,278 | 1,156 | 28,650 | 535 | (366,470 | ) | (277,851 | ) | 3,901 | ||||||||||||||||||||||
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| (671,295 | ) | 266,011 | 2,132 | 52,813 | 987 | 366,470 | 688,413 | 17,118 | ||||||||||||||||||||||||
| Noncontrolling interests |
(14,305 | ) | (288 | ) | — | — | — | — | (288 | ) | (14,593 | ) | ||||||||||||||||||||
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| Income (loss) attributable to Kindred |
$ | (685,600 | ) | $ | 265,723 | $ | 2,132 | $ | 52,813 | $ | 987 | $ | 366,470 | $ | 688,125 | $ | 2,525 | |||||||||||||||
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| Diluted earnings (loss) per common share |
$ | (7.89 | ) | $ | 0.03 | |||||||||||||||||||||||||||
| Diluted shares used in computing earnings (loss) per common share |
86,869 | 87,529 | ||||||||||||||||||||||||||||||
| (a) | During the first quarter of 2017, the Company updated its definitions of “core” non-GAAP measures. See “Non-GAAP Measures” beginning on page 13 for a discussion regarding the updated definitions. For comparability, “core” results for 2016 have been revised to conform to the current year presentation. |
Kindred Healthcare Reports First Quarter 2017 Results
Page 19
May 3, 2017
KINDRED HEALTHCARE, INC.
Reconciliation of GAAP Results to Non-GAAP Measures (Continued)
(Unaudited)
(In thousands, except per share amounts)
| Three months ended December 31, 2016 | ||||||||||||||||||||||||||||||||||||
| Charges | ||||||||||||||||||||||||||||||||||||
| As reported |
Business interruption settlements |
Impairment charges |
Research and development |
Restructuring charges |
Gentiva transaction and integration |
Deferred tax valuation allowance |
Total | Before charges (“core”) (a) |
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| Income (loss) from continuing operations: |
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| Segment EBITDAR: |
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| Kindred at Home: |
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| Home health |
$ | 61,487 | $ | (302 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (302 | ) | $ | 61,185 | ||||||||||||||||
| Hospice |
28,805 | (1,137 | ) | — | — | — | — | — | (1,137 | ) | 27,668 | |||||||||||||||||||||||||
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| 90,292 | (1,439 | ) | — | — | — | — | — | (1,439 | ) | 88,853 | ||||||||||||||||||||||||||
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| Hospital division |
91,892 | (630 | ) | — | — | — | — | — | (630 | ) | 91,262 | |||||||||||||||||||||||||
| Kindred Rehabilitation Services: |
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| Kindred Hospital Rehabilitation Services |
49,314 | — | — | — | — | — | — | — | 49,314 | |||||||||||||||||||||||||||
| RehabCare |
5,578 | — | — | — | — | — | — | — | 5,578 | |||||||||||||||||||||||||||
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| 54,892 | — | — | — | — | — | — | — | 54,892 | ||||||||||||||||||||||||||||
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| Nursing center division |
33,658 | — | — | — | — | — | — | — | 33,658 | |||||||||||||||||||||||||||
| Support center |
(57,643 | ) | — | — | 4,293 | — | — | — | 4,293 | (53,350 | ) | |||||||||||||||||||||||||
| Impairment charges |
(4,351 | ) | — | 4,351 | — | — | — | — | 4,351 | — | ||||||||||||||||||||||||||
| Restructuring charges |
(16,923 | ) | — | — | — | 16,923 | — | — | 16,923 | — | ||||||||||||||||||||||||||
| Transaction costs |
(2,166 | ) | — | — | — | — | 1,779 | — | 1,779 | (387 | ) | |||||||||||||||||||||||||
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| EBITDAR |
189,651 | (2,069 | ) | 4,351 | 4,293 | 16,923 | 1,779 | — | 25,277 | 214,928 | ||||||||||||||||||||||||||
| Rent |
(94,509 | ) | — | — | — | — | — | — | — | (94,509 | ) | |||||||||||||||||||||||||
| Restructuring charges - rent |
(2,029 | ) | — | — | — | 2,029 | — | — | 2,029 | — | ||||||||||||||||||||||||||
| Depreciation and amortization |
(38,082 | ) | — | — | — | — | — | — | — | (38,082 | ) | |||||||||||||||||||||||||
| Interest, net |
(58,629 | ) | — | — | — | — | — | — | — | (58,629 | ) | |||||||||||||||||||||||||
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| Income (loss) from continuing operations before income taxes |
(3,598 | ) | (2,069 | ) | 4,351 | 4,293 | 18,952 | 1,779 | — | 27,306 | 23,708 | |||||||||||||||||||||||||
| Provision for income taxes |
2,860 | (1,718 | ) | 3,613 | 3,565 | 15,736 | 1,208 | (22,002 | ) | 402 | 3,262 | |||||||||||||||||||||||||
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| (6,458 | ) | $ | (351 | ) | $ | 738 | $ | 728 | $ | 3,216 | $ | 571 | $ | 22,002 | $ | 26,904 | 20,446 | |||||||||||||||||||
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| Noncontrolling interests |
(13,261 | ) | (13,261 | ) | ||||||||||||||||||||||||||||||||
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| Income (loss) attributable to Kindred |
$ | (19,719 | ) | $ | 7,185 | |||||||||||||||||||||||||||||||
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| Diluted earnings (loss) per common share |
$ | (0.23 | ) | $ | 0.08 | |||||||||||||||||||||||||||||||
| Diluted shares used in computing earnings (loss) per common share |
86,904 | 87,641 | ||||||||||||||||||||||||||||||||||
| Year ended December 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||
| Charges | ||||||||||||||||||||||||||||||||||||||||||||
| As reported |
Business interruption settlements |
Litigation contingency |
Impairment charges |
Research and development |
Debt amendment |
Restructuring charges |
Gentiva transaction and integration |
Deferred tax valuation allowance |
Total | Before charges (“core”) (a) |
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| Income (loss) from continuing operations: |
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| Segment EBITDAR: |
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| Kindred at Home: |
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| Home health |
$ | 279,531 | $ | (1,611 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (1,611 | ) | $ | 277,920 | ||||||||||||||||||||
| Hospice |
116,326 | (1,137 | ) | — | — | — | — | — | — | — | (1,137 | ) | 115,189 | |||||||||||||||||||||||||||||||
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| 395,857 | (2,748 | ) | — | — | — | — | — | — | — | (2,748 | ) | 393,109 | ||||||||||||||||||||||||||||||||
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| Hospital division |
436,071 | (630 | ) | — | — | — | — | — | — | — | (630 | ) | 435,441 | |||||||||||||||||||||||||||||||
| Kindred Rehabilitation Services: |
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| Kindred Hospital Rehabilitation Services |
197,123 | — | — | — | — | — | — | — | — | — | 197,123 | |||||||||||||||||||||||||||||||||
| RehabCare |
40,082 | — | — | — | — | — | — | — | — | — | 40,082 | |||||||||||||||||||||||||||||||||
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| 237,205 | — | — | — | — | — | — | — | — | — | 237,205 | ||||||||||||||||||||||||||||||||||
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| Nursing center division |
127,342 | — | — | — | — | — | — | — | — | — | 127,342 | |||||||||||||||||||||||||||||||||
| Support center |
(257,006 | ) | — | — | — | 11,520 | 1,103 | — | — | — | 12,623 | (244,383 | ) | |||||||||||||||||||||||||||||||
| Litigation contingency expense |
(2,840 | ) | — | 1,775 | — | — | — | — | — | — | 1,775 | (1,065 | ) | |||||||||||||||||||||||||||||||
| Impairment charges |
(342,559 | ) | — | — | 342,559 | — | — | — | — | — | 342,559 | — | ||||||||||||||||||||||||||||||||
| Restructuring charges |
(45,783 | ) | — | — | — | — | — | 45,783 | — | — | 45,783 | — | ||||||||||||||||||||||||||||||||
| Transaction costs |
(8,679 | ) | — | — | — | — | — | — | 6,306 | — | 6,306 | (2,373 | ) | |||||||||||||||||||||||||||||||
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| EBITDAR |
539,608 | (3,378 | ) | 1,775 | 342,559 | 11,520 | 1,103 | 45,783 | 6,306 | — | 405,668 | 945,276 | ||||||||||||||||||||||||||||||||
| Rent |
(390,534 | ) | — | — | — | — | — | — | 272 | — | 272 | (390,262 | ) | |||||||||||||||||||||||||||||||
| Restructuring charges - rent |
(61,392 | ) | — | — | — | — | — | 61,392 | — | — | 61,392 | — | ||||||||||||||||||||||||||||||||
| Depreciation and amortization |
(159,402 | ) | — | — | — | — | — | — | — | — | — | (159,402 | ) | |||||||||||||||||||||||||||||||
| Interest, net |
(231,485 | ) | — | — | — | — | — | — | — | — | — | (231,485 | ) | |||||||||||||||||||||||||||||||
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| Income (loss) from continuing operations before income taxes |
(303,205 | ) | (3,378 | ) | 1,775 | 342,559 | 11,520 | 1,103 | 107,175 | 6,578 | — | 467,332 | 164,127 | |||||||||||||||||||||||||||||||
| Provision for income taxes |
314,330 | (1,356 | ) | (391 | ) | 69,806 | 4,624 | 443 | 43,017 | 2,510 | (388,472 | ) | (269,819 | ) | 44,511 | |||||||||||||||||||||||||||||
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| (617,535 | ) | (2,022 | ) | 2,166 | 272,753 | 6,896 | 660 | 64,158 | 4,068 | 388,472 | 737,151 | 119,616 | ||||||||||||||||||||||||||||||||
| Noncontrolling interests |
(53,602 | ) | — | — | (1,304 | ) | — | — | — | — | — | (1,304 | ) | (54,906 | ) | |||||||||||||||||||||||||||||
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| Income (loss) attributable to Kindred |
$ | (671,137 | ) | $ | (2,022 | ) | $ | 2,166 | $ | 271,449 | $ | 6,896 | $ | 660 | $ | 64,158 | $ | 4,068 | $ | 388,472 | $ | 735,847 | $ | 64,710 | ||||||||||||||||||||
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| Diluted earnings (loss) per common share |
$ | (7.73 | ) | $ | 0.72 | |||||||||||||||||||||||||||||||||||||||
| Diluted shares used in computing earnings (loss) per common share |
86,800 | 87,491 | ||||||||||||||||||||||||||||||||||||||||||
| (a) | During the first quarter of 2017, the Company updated its definitions of “core” non-GAAP measures. See “Non-GAAP Measures” beginning on page 13 for a discussion regarding the updated definitions. For comparability, “core” results for 2016 have been revised to conform to the current year presentation. |
Kindred Healthcare Reports First Quarter 2017 Results
Page 20
May 3, 2017
KINDRED HEALTHCARE, INC.
Reconciliation of GAAP Results to Non-GAAP Measures (Continued)
(Unaudited)
(In thousands)
| Three months ended March 31, |
||||||||
| 2017 | 2016 | |||||||
| Reconciliation of net cash flows used in operating activities to core operating cash flows and core free cash flows: |
||||||||
| Net cash flows used in operating activities |
($92,638 | ) | ($130,340 | ) | ||||
| Adjustments to remove certain payments (including payments made for discontinued operations) included in net cash flows used in operating activities: |
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| Transaction, severance, research and development, and retention |
6,986 | 4,841 | ||||||
| Business interruption settlements |
(1,993 | ) | (1,138 | ) | ||||
| Lease termination fees - restructuring |
1,998 | — | ||||||
| Capitalized lender fees related to debt amendment |
5,403 | — | ||||||
| Litigation |
8,536 | 127,669 | ||||||
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| 20,930 | 131,372 | |||||||
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| Net cash flows provided by (used in) operating activities excluding certain items before income tax benefit of certain payments |
(71,708 | ) | 1,032 | |||||
| Benefit of reduced income tax payments resulting from certain payments (a) |
— | — | ||||||
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| Net cash flows provided by (used in) operating activities excluding certain items (core operating cash flows) |
(71,708 | ) | 1,032 | |||||
| Less routine capital expenditures |
(11,941 | ) | (18,106 | ) | ||||
| Less distributions to noncontrolling interests |
(25,801 | ) | (16,315 | ) | ||||
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| Free cash flows excluding certain items (core free cash flows) |
($109,450 | ) | ($33,389 | ) | ||||
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| (a) | No tax deposits were due in first quarter of 2017 or 2016. |