Melville, N.Y., May 9, 2000—Gentiva Health Services (Nasdaq: GTIV), North America’s leading home health care company and a national leader in the distribution and provision of specialty pharmaceuticals, today reported first quarter 2000 financial results. The results, which represent the company’s first quarter of financial reporting since its March 15, 2000 split-off from its former parent company, Olsten Corporation, reflect a five percent growth in company revenues over first quarter 1999 results. This increase in revenues was fueled by growth in the company’s specialty pharmaceutical and staffing businesses, which grew eight percent and 20 percent, respectively, over first quarter 1999.
Net revenues for the quarter were $385 million, compared to $368 million for the first quarter of 1999. Excluding non-recurring and special charges, earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter of 2000 were $15.1 million, compared with EBITDA of $13.6 million for the first quarter of 1999.
For the quarter, Gentiva Health Services reported a net loss of $1.9 million, or $0.09 a share. Included in these results were non-recurring and special charges related to the company’s March 15, 2000 split-off, which primarily included transaction costs and costs associated with the company’s name change. Excluding these charges, net income would have been $1.4 million, or $0.07 a share. Ending net debt for the quarter was $120 million, including a $20 million convertible preferred trust security.
"Gentiva Health Services has managed its transition to an independent company, while simultaneously increasing the growth of its core businesses," said Edward A. Blechschmidt, chairman, chief executive officer and president of Gentiva Health Services. "Our two primary lines of business—specialty pharmaceuticals and nursing—are both national leaders in the home health care industry and are benefiting from the ever-increasing trend toward greater levels of home-based care and bio/pharmacological management of chronic disease," said Blechschmidt. Among the quarter’s highlights for the company’s specialty pharmaceutical business was a strategic alliance with United Therapeutics Corporation, under which Gentiva Health Services will distribute United Therapeutics’ late-stage pulmonary hypertension therapy, known as Uniprost(TM), upon the therapy’s approval by the Food and Drug Administration (FDA).
The company also entered into new contracts with managed care organizations. These included a renewal of the company’s national contract with CIGNA HealthCare, which has been in place since 1995 and which continues to represent the nation’s largest managed home health care contract. The company also finalized an agreement with Kaiser Permanente, Kansas City, under which Gentiva Health Services will provide home health nursing care on a case rate basis and continue to provide infusion therapy services on a fee-for-service basis. "We have initiated some very innovative managed care contracts during this quarter, which can serve as a basis for future contracts going forward," said Blechschmidt.
The growth in the company’s staffing business was propelled in large part by staffing needs generated by a national shortage of nurses and related human resource issues in hospitals and other institutions. "The demand for nursing personnel will almost certainly continue to be one of the great challenges confronting the American health care delivery system, and our staffing business should be well-positioned to serve this demand," said Blechschmidt.
Gentiva Health Services (Nasdaq: GTIV) is North America’s largest provider of home health care and related services. A leader in specialty pharmaceutical services and nursing services solutions, the company has more than 400 locations in North America. The company also provides marketing and distribution solutions for pharmaceutical, biotechnology and medical device firms as well as home infusion therapies, health care network management services, skilled nursing services and medical staffing solutions. In 1999, the company had approximately $1.5 billion in revenues.
|Statement of Operations|
|(in 000's except per share)||1st Quarter|
|Cost of Services Sold||256,105||242,486|
|Operating Profit (Loss)||970||(11,878)|
|Interest Expense, net||4,236||4,273|
|Income (Loss) before Income Taxes||(3,266)||(16,151)|
|Income Tax Benefit||1,360||3,345|
|Loss per Share||$||(0.09)||$||(0.63)|
|EBITDA before Non-recurring/Special Charges||$||15,057||$||13,555|
|Non-recurring and Special Charges||5,600||16,700|
|Depreciation and Amortization||8,487||8,733|
|Operating Profit (Loss)||$||970||$||(11,878)|
|Specialty Pharmaceutical Services||$||180,818||$||168,419|
|Home Care Nursing Services||167,895||169,730|
|Total Net Revenues||$||384,607||$||368,160|
|Balance Sheet Information||April 2, 2000||January 2, 2000|
|Tangible Net Worth||414,168||454,994|
Information contained in this news release, other than historical information, should be considered forward-looking, and is subject to various risk factors and uncertainties. For instance, the Company’s strategies and operations involve risks of competition, changing market conditions, changes in laws and regulations affecting our industries and numerous other factors discussed in this release and in the Company’s filings with the Securities and Exchange Commission. Accordingly, actual results may differ materially from those anticipated in any forward-looking statements.