Print page |
E-mail page
| 
Download PDF
|
Add to investor kit
« Previous Release | Next Release »
MELVILLE, N.Y., Feb 18, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- Gentiva Health Services, Inc. (Nasdaq: GTIV), a leading provider of comprehensive home health services, today reported fourth quarter results, led by 20% revenue growth and 39% operating contribution growth from its Home Health segment, as the Company continued to execute on its strategy of delivering clinical innovation and quality care to patients.
(Logo: http://www.newscom.com/cgi-bin/prnh/20060323/NYTH117LOGO )
Performance highlights for the quarter ended December 28, 2008 included the following Company results compared to the fourth quarter ended December 30, 2007:
-- Net revenues of $282.9 million compared to $313.4 million, which
included net revenues of $76.3 million from its CareCentrix business
unit in the 2007 fourth quarter. Excluding prior-year net revenues from
CareCentrix, Gentiva's net revenues grew $45.8 million, or 19% in
the 2008 fourth quarter. The Company sold a majority interest in
CareCentrix to Water Street Healthcare Partners on September 25, 2008.
-- Net income of $12.8 million, or $0.43 per diluted share, compared to net
income of $8.8 million or $0.31 per diluted share in the 2007 fourth
quarter. Adjusted net income, which excludes special charges related to
restructuring and integration activities, was $0.44 per diluted share in
the 2008 period compared to $0.31 per diluted share in the prior-year
period.
-- A 19% increase in earnings before interest, taxes, depreciation and
amortization (EBITDA) to $30.0 million in the fourth quarter of 2008;
EBITDA as a percentage of net revenues improved to 10.6% in the fourth
quarter of 2008 versus 8.1% in the prior-year period.
"We achieved our results both for the fourth quarter and all of 2008 while focusing on two key objectives: delivering clinical excellence to a more acute patient population and positioning our Company as the employer of choice for clinicians," said Gentiva CEO Tony Strange. "During the fourth quarter we continued the launch of innovative specialty care programs across our branch network and again achieved strong performance in the hiring of new clinicians. Gentiva will continue to address the needs of the nation's growing senior population, for which home healthcare is a cost-effective and patient-preferred solution for the nation's healthcare challenges."
Gentiva reported these segment highlights for the quarter:
-- Home Health's 20% revenue growth to $249.3 million and 39%
operating contribution growth to $41.8 million led to an operating
contribution margin of 16.8%, as compared with 14.5% in the fourth
quarter of 2007. Home Health Medicare revenue growth of 26% was driven
by a double-digit increase in episodes as the Company served a growing
number of higher acuity patients, expanded specialty programs and
integrated acquisitions completed in 2008.
-- Revenues in Gentiva's Other Related Services segment -- which
includes hospice, respiratory therapy and home medical equipment,
infusion therapy and consulting -- increased 11% to $34.0 million, while
operating contribution decreased 3% to $3.5 million compared to the
prior-year period. Fourth quarter net revenues and operating
contribution for this segment were the highest of any quarter during
2008 as the Company continues to implement initiatives to improve
performance.
Companywide performance highlights for the twelve months ended December 28, 2008 included:
-- Net revenues of $1.30 billion versus $1.23 billion in the prior year.
Net revenues in 2008 and 2007 included approximately $233 million and
$291 million, respectively, relating to CareCentrix. Excluding the
revenue contribution from CareCentrix in both years, 2008 net revenues
would have been $1.07 billion, an increase of $129 million, or 14%.
-- Net income of $153.5 million, or $5.21 per diluted share, which included
a non-recurring pre-tax gain, net of transaction costs, of $107.9
million or $3.72 per diluted share from the sale of a majority interest
in its CareCentrix unit in the third quarter. Excluding the net gain
from CareCentrix and special charges, adjusted net income was $45.5
million, up 33% compared with $34.3 million in the year-ago period. On a
diluted earnings per share basis, adjusted net income was $1.55 compared
with $1.20 in 2007.
-- An EBITDA increase of 14% to $114.1 million versus $99.7 million in the
prior-year period.
-- Operating cash flow of $70.7 million in 2008 compared with $62.7 million
in 2007.
Gentiva ended the fourth quarter with cash and cash equivalents of $69.2 million and long-term debt of $251 million. Days sales outstanding (DSO) at 2008 fiscal year end was 57 days compared with 61 days at the end of the third quarter.
Full-Year 2009 Outlook
Gentiva also announced that it has raised its outlook for fiscal 2009, which was previewed in the Company's third quarter earnings release issued October 30, 2008. Full-year net revenues are expected to be in a range of $1.14 billion to $1.18 billion, as compared to the preview of $1.12 billion to $1.17 billion. Diluted earnings per share is expected to be in a range between $1.72 and $1.80, up from the $1.62 to $1.72 range provided in October, based on an estimated 30.5 million average outstanding shares. Gentiva's 2009 outlook represents an increase in diluted earnings per share of 20% to 30% when compared with 2008 pro forma financial results, which reflect the Company's performance as if the CareCentrix divestiture had occurred at the beginning of fiscal 2008. The 2009 outlook excludes the impact of special items, restructuring or non-recurring charges and any future acquisitions.
Non-GAAP Financial Measures
The information provided in this press release includes certain non-GAAP financial measures as defined under Securities and Exchange Commission (SEC) rules. In accordance with SEC rules, the Company has provided, in the supplemental information and the footnotes to the tables, a reconciliation of those measures to the most directly comparable GAAP measures.
Conference Call and Web Cast Details
The Company will comment further on its fourth quarter and fiscal 2008 results during its conference call and live web cast to be held Wednesday, February 18, 2009 at 10:00 a.m. Eastern Time. To participate in the call from the United States, Canada or an international location, dial (973) 935-2408 and reference call #80349319. The web cast is an audio-only, one-way event. Web cast listeners who wish to ask questions must participate in the conference call. Log onto http://investors.gentiva.com/events.cfm to hear the web cast. A replay of the call will be available on February 18, beginning at approximately 1 p.m. ET, and will remain available continuously through February 25. To listen to a replay of the call from the United States, Canada or international locations, dial (800) 642-1687 or (706) 645-9291 and enter the following PIN at the prompt: 80349319. Visit http://investors.gentiva.com/events.cfm to access the web cast archive. This press release is accessible at http://investors.gentiva.com/releases.cfm and a transcript of the conference call is expected to be available on the site within 36 hours after the call.
About Gentiva Health Services, Inc.
Gentiva Health Services, Inc. is a leading provider of comprehensive home health services, delivering innovative, high quality care to patients across the United States. Gentiva is a single source for skilled nursing; physical, occupational, speech and neurorehabilitation services; hospice services; social work; nutrition; disease management education; help with daily living activities; respiratory therapy and home medical equipment; infusion therapy services; and other therapies and services. For more information, visit Gentiva's web site, http://www.gentiva.com, and its investor relations section at http://investors.gentiva.com. GTIV-E
(tables and notes follow)
(in 000's, except per
share data) 4th Quarter Fiscal Year
----------- -----------
2008 2007 2008 2007
---- ---- ---- ----
Statements of Income
--------------------
Net revenues $282,930 $313,396 $1,300,438 $1,229,297
Cost of services and
goods sold 139,378 180,154 717,903 705,592
------- ------- ------- -------
Gross profit 143,552 133,242 582,535 523,705
Selling, general
and administrative
expenses (119,093) (113,247) (490,451) (444,042)
Gain on sale
of business, net 61 - 107,933 -
Interest expense (3,501) (6,636) (19,377) (27,285)
Interest income 1,012 768 2,290 3,204
----- --- ----- -----
Income before income
taxes 22,031 14,127 182,930 55,582
Income tax expense 9,165 5,281 29,445 22,754
----- ----- ------ ------
Income before equity in
net loss of
affiliate 12,866 8,846 153,485 32,828
Equity in net loss
of affiliate (55) - (35) -
--- --- --- ---
Net income $12,811 $8,846 $153,450 $32,828
======= ====== ======== =======
Earnings per Share
------------------
Net income:
Basic $0.44 $0.32 $5.37 $1.18
===== ===== ===== =====
Diluted $0.43 $0.31 $5.21 $1.15
===== ===== ===== =====
Average shares
outstanding:
Basic 28,845 28,006 28,578 27,798
====== ====== ====== ======
Diluted 29,861 28,781 29,439 28,599
====== ====== ====== ======
Condensed Balance
Sheets (A)
-----------------
ASSETS Dec 28, 2008 Dec 30, 2007
------ ------------ ------------
Cash and cash
equivalents $69,201 $14,167
Restricted cash - 22,014
Short-term
investments (B) - 31,250
Accounts receivable,
net (C) 177,201 207,801
Deferred tax assets 11,933 18,859
Prepaid expenses
and other
current assets 13,141 14,415
------ ------
Total current
assets 271,476 308,506
Long-term
investments (B) 11,050 -
Note receivable 25,000 -
Investment in
affiliate 23,264 -
Fixed assets, net 63,815 59,562
Intangible assets,
net 250,432 211,602
Goodwill 308,213 276,100
Other assets 20,247 26,463
------ ------
Total assets $973,497 $882,233
======== ========
LIABILITIES AND
SHAREHOLDERS'
EQUITY
---------------
Current portion of
long-term debt $- $2,304
Accounts payable 8,027 20,093
Payroll and related
taxes 17,869 17,163
Deferred revenue 32,976 29,015
Medicare liabilities 6,680 7,985
Cost of claims
incurred but not
reported - 24,321
Obligations under
insurance programs 39,628 36,816
Other accrued
expenses 40,895 42,282
------ ------
Total current
liabilities 146,075 179,979
Long-term debt 251,000 307,696
Deferred tax
liabilities, net 64,262 48,572
Other liabilities 17,189 22,557
Shareholders' equity 494,971 323,429
------- -------
Total liabilities
and shareholders'
equity $973,497 $882,233
======== ========
Common shares
Outstanding 28,864 28,046
======== ========
( A ) The Condensed Balance Sheet as of December 28, 2008 reflects
the impact of the CareCentrix transaction in various line items.
( B ) Short-term and long-term investments at December 28, 2008 and
December 30, 2007 consisted of AAA-rated auction rate securities.
At December 28, 2008, long-term investments were presented net of a
$1.9 million valuation allowance, the charge for which was recorded
in Shareholders' Equity.
( C ) Accounts receivable, net, included an allowance for doubtful
Accounts of $8.2 million and $9.4 million at December 28, 2008 and
December 30, 2007, respectively.
(in 000's) Fiscal Year
-----------
Condensed Statements of Cash Flows 2008 2007
---------------------------------- ---- ----
OPERATING ACTIVITIES:
Net income $153,450 $32,828
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 22,044 20,014
Amortization of debt issuance costs 1,753 1,063
Provision for doubtful accounts 11,010 9,939
Reversal of tax audit reserves - (450)
Equity-based compensation expense 5,757 6,812
Windfall tax benefits associated with equity-
based compensation (2,227) (856)
Gain on sale of business, net (107,933) -
Equity in net loss of affiliate 35 -
Deferred income taxes 14,127 20,923
Changes in assets and liabilities, net of effects
from acquisitions and dispositions:
Accounts receivable (25,555) (36,423)
Prepaid expenses and other current assets (2,118) (3,531)
Current liabilities (750) 12,606
Other, net 1,107 (254)
----- ----
Net cash provided by operating activities 70,700 62,671
------ ------
INVESTING ACTIVITIES:
Purchase of fixed assets (24,004) (24,064)
Proceeds from sale of business, net of cash
transferred 83,160 -
Acquisition of businesses, net of cash acquired (60,736) (3,820)
Purchases of short-term investments available-
for-sale (28,000) (96,850)
Maturities of short-term investments available-
for-sale 46,250 89,925
Withdrawal from restricted cash 22,014 -
------ ------
Net cash provided by (used in) investing
activities 38,684 (34,809)
------ -------
FINANCING ACTIVITIES:
Proceeds from issuance of common stock 11,547 7,882
Windfall tax benefits associated with equity-
based compensation 2,227 856
Borrowings under revolving credit facility 24,000 -
Debt repayments of acquired company (7,420) -
Debt issuance costs (557) -
Other debt repayments (83,000) (32,000)
Repayment of capital lease obligations (1,147) (1,329)
------ ------
Net cash used in financing activities (54,350) (24,591)
------- -------
Net change in cash and cash equivalents 55,034 3,271
Cash and cash equivalents at beginning of year 14,167 10,896
------ ------
Cash and cash equivalents at end of year $69,201 $14,167
======= =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid $21,081 $27,469
Income taxes paid $10,561 $2,389
(in 000's)
Supplemental Information 4th Quarter Fiscal Year
------------------------- ----------- -----------
2008 2007 2008 2007
---- ---- ---- ----
Segment Information (1)
Net revenues
Home Health $249,306 $207,494 $942,526 $821,829
CareCentrix - 76,275 232,717 290,786
Other Related Services 33,989 30,575 128,229 121,797
Intersegment revenues (365) (948) (3,034) (5,115)
---- ---- ------ ------
Total net revenues $282,930 $313,396 $1,300,438 $1,229,297
======== ======== ========== ==========
Operating
contribution (3)
Home Health $41,769 $30,069 $151,235 $122,053
CareCentrix (4) - 7,180 18,074 29,070
Other Related Services 3,489 3,593 12,535 13,821
----- ----- ------ ------
Total operating
contribution 45,258 40,842 181,844 164,944
Corporate expenses (15,249) (15,539) (67,716) (65,268)
Gain on sale of
business, net 61 - 107,933 -
Depreciation and
amortization (5,550) (5,308) (22,044) (20,013)
Interest expense, net (2,489) (5,868) (17,087) (24,081)
------ ------ ------- -------
Income before income
taxes $22,031 $14,127 $182,930 $55,582
======= ======= ======== =======
4th Quarter Fiscal Year
----------- -----------
2008 2007 2008 2007
---- ---- ---- ----
Net Revenues by Major
Payer Source:
Medicare
Home Health $176,508 $140,111 $648,022 $549,262
Other 20,117 15,527 68,052 60,285
------ ------ ------ ------
Total Medicare 196,625 155,638 716,074 609,547
Medicaid and local
government 33,326 36,536 141,953 153,078
Commercial insurance and
other (5) 52,978 121,222 442,411 466,672
------ ------- ------- -------
Total net revenues $282,929 $313,396 $1,300,438 $1,229,297
======== ======== ========== ==========
A reconciliation of
EBITDA to Net income -
As Reported amounts
follows: (2) 4th Quarter Fiscal Year
----------- -----------
2008 2007 2008 2007
---- ---- ---- ----
EBITDA (3) $30,009 $25,303 $114,128 $99,676
Gain on sale of
business, net 61 - 107,933 -
Depreciation and
amortization (5,550) (5,308) (22,044) (20,013)
Interest expense, net (2,489) (5,868) (17,087) (24,081)
------ ------ ------- -------
Income before income
taxes 22,031 14,127 182,930 55,582
Income tax expense (6) (9,165) (5,281) (29,445) (22,754)
------ ------ ------- -------
Income before equity in
net loss of affiliate 12,866 8,846 153,485 32,828
Equity in net loss of
affiliate (55) - (35) -
--- --- --- ---
Net income - As Reported $12,811 $8,846 $153,450 $32,828
======= ====== ======== =======
Notes:
1) The Company's senior management evaluates performance and allocates
resources based on operating contributions of the reportable
segments, which exclude corporate expenses, depreciation,
amortization, and interest expense (net), but include revenues and
all other costs directly attributable to the specific segment.
2) EBITDA, a non-GAAP financial measure, is defined as income before
interest expense (net of interest income), income taxes, depreciation
and amortization. Management uses EBITDA to evaluate overall
performance and compare current operating results with other companies
in the healthcare industry. EBITDA should not be considered in
isolation or as a substitute for net income, operating income or cash
flow statement data determined in accordance with accounting
principles generally accepted in the United States. Because EBITDA is
not a measure of financial performance under accounting principles
generally accepted in the United States and is susceptible to varying
calculations, it may not be comparable to similarly titled measures in
other companies.
3) Operating contribution and EBITDA for the fourth quarter and fiscal
year 2008 included restructuring and integration costs of $0.6 million
and $2.7 million, respectively. For the fourth quarter and fiscal year
2007, operating contribution and EBITDA included special charges of
$0.3 million and $2.4 million, respectively. The special charges,
which included restructuring and integration costs and costs and
professional fees associated with merger and acquisition activities,
were reflected as follows for segment reporting (dollars in millions):
4th Quarter Fiscal Year
----------- -----------
2008 2007 2008 2007
---- ---- ---- ----
Home Health $0.1 $0.1 $0.4 $0.6
Other Related Services - - - 0.1
Corporate expenses 0.5 0.2 2.3 1.7
--- --- --- ---
Total $0.6 $0.3 $2.7 $2.4
==== ==== ==== ====
4) Operating contribution for CareCentrix was comprised of the following
(dollars in thousands):
4th Quarter Fiscal Year
----------- -----------
2008 2007 2008 2007
---- ---- ---- ----
Gross profit $- $15,134 $42,539 $59,100
Selling, general and
administrative
expenses - (8,080) (24,850) (30,524)
Add: depreciation - 126 385 494
--- --- --- ---
Operating Contribution $- $7,180 $18,074 $29,070
==== ====== ======= =======
5) Commercial Insurance and Other revenues included revenues paid on an
episodic basis of $14.5 million and $53.2 million for the fourth
quarter and fiscal year 2008, respectively, and $9.0 million and
$29.3 million for the fourth quarter and fiscal year 2007,
respectively, reflecting services rendered to Medicare beneficiaries
enrolled in managed Medicare plans.
6) The Company's effective tax rate was 41.6% for the fourth quarter and
16.1% for fiscal year 2008, and 37.4% and 40.9% for the fourth
quarter and fiscal year 2007, respectively. During the fiscal year
2008 period, the Company recorded a pre-tax gain, net of transaction
costs, of $107.9 million and an income tax benefit of approximately
$1.6 million relating to the sale of a majority interest in its
CareCentrix unit. The CareCentrix transaction generated a capital
loss carryforward for federal tax purposes. Excluding the impact of
the CareCentrix transaction, the Company's effective tax rate would
have been 41.4% for fiscal year 2008.
Forward-Looking Statement
Certain statements contained in this news release, including, without limitation, statements containing the words "believes," "anticipates," "intends," "expects," "assumes," "trends" and similar expressions, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based upon the Company's current plans, expectations and projections about future events. However, such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These factors include, among others, the following: economic and business conditions, including the ability to access capital markets; demographic changes; changes in, or failure to comply with, existing governmental regulations; legislative proposals for healthcare reform; changes in Medicare and Medicaid reimbursement levels; effects of competition in the markets in which the Company operates; liability and other claims asserted against the Company; ability to attract and retain qualified personnel; availability and terms of capital; loss of significant contracts or reduction in revenues associated with major payer sources; ability of customers to pay for services; business disruption due to natural disasters or terrorist acts; ability to successfully integrate the operations of acquisitions the Company may make and achieve expected synergies and operational efficiencies within expected time-frames; effect on liquidity of the Company's debt service requirements; a material shift in utilization within capitated agreements; and changes in estimates and judgments associated with critical accounting policies and estimates. For a detailed discussion of certain of these and other factors that could cause actual results to differ from those contained in this news release, please refer to the Company's various filings with the Securities and Exchange Commission (SEC), including the "Risk Factors" section contained in the Company's annual report on Form 10-K for the year ended December 30, 2007.
Financial and Investor Contact:
John R. Potapchuk
631-501-7035
john.potapchuk@gentiva.com
or Brandon Ballew
770-221-6700
brandon.ballew@gentiva.com
Media Contact:
Jennifer Gery-Egan
Brainerd Communicators
212-986-6667
gery@braincomm.com
SOURCE Gentiva Health Services, Inc.
http://www.gentiva.com
Copyright (C) 2009 PR Newswire. All rights reserved