Gentiva(R) Health Services Reports Second Quarter 2010 Results
ATLANTA, July 29, 2010 /PRNewswire via COMTEX News Network/ -- Gentiva Health Services, Inc. (Nasdaq: GTIV), a leading provider of home health and hospice services, today reported second quarter 2010 results.
Highlights for the three and six months ended July 4, 2010 as presented in this press release reflect results from continuing operations. Discontinued operations represent results of Gentiva's respiratory therapy and home medical equipment and infusion therapy businesses which were sold on February 1, 2010.
Second quarter 2010 highlights include:
- Total net revenues of $297.1 million, an increase of 4% compared to $284.8 million for the quarter ended June 29, 2009. Net revenues included home health episodic revenues of $228.7 million, up 7% compared to $213.3 million in the comparable 2009 period, and hospice revenues of $20.9 million, up approximately 14% from $18.3 million in the 2009 second quarter.
- Income from continuing operations of $20.2 million, or $0.66 per diluted share which included net restructuring, legal settlement and merger and acquisition costs of $2.5 million or $0.08 per diluted share. Income from continuing operations in the second quarter of 2009 was $17.4 million or $0.59 per diluted share and included restructuring and merger and acquisition costs of $0.6 million or $0.02 per diluted share.
- Adjusted income from continuing operations of $22.7 million, up 27% compared with the prior year period. On a diluted per share basis, adjusted income from continuing operations was $0.74 in the 2010 second quarter compared with $0.61 in the corresponding period of 2009. Adjusted income from continuing operations excluded the net charges described above as well as the impact of any losses on sales of assets.
- Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) attributable to continuing operations increased 23% to $43.2 million in the second quarter of 2010 as compared to $35.0 million in the second quarter of 2009. Adjusted EBITDA as a percentage of net revenues improved to 14.5% in the second quarter of 2010 versus 12.3% in the prior-year period. Adjusted EBITDA excluded net charges relating to restructuring, legal settlements and merger and acquisition activities.
"Gentiva had a good second quarter that featured continued strong growth in Hospice, improved operating margins and solid execution as we managed through somewhat softer Home Health episodic volumes," said Gentiva CEO Tony Strange. "The performance gives us confidence in our earnings projections for the year, and, along with our growing cash position and strong balance sheet, puts us in excellent position to build the business as we prepare to close the Odyssey transaction during the third quarter."
Highlights for the six months ended July 4, 2010 include:
- Total net revenues of $594.2 million, an increase of approximately 6% compared to $561.2 million for the prior year period. Net revenues included home health episodic revenues of $457.2 million, up 10% compared to $415.5 million in the comparable 2009 period, and hospice revenues of $40.5 million, up approximately 13% from $35.9 million in the prior year period.
- Income from continuing operations of $30.5 million, or $1.00 per diluted share, which included net charges of $13.7 million or $0.29 per diluted share relating to the impact of settlements of two open legal matters and charges associated with restructuring and merger and acquisition activities of $4.3 million or $0.08 per diluted share. Income from continuing operations in the comparable 2009 period was $35.5 million or $1.20 per diluted share and included (i) a non-recurring pre-tax net gain of $5.7 million or $0.19 per diluted share resulting from the sale of certain branch offices that specialized primarily in pediatric home health care services and (ii) restructuring and merger and acquisition costs of $1.5 million or $0.03 per diluted share.
- Adjusted income from continuing operations of $42.0 million, up 36% compared with the prior year period. On a diluted per share basis, adjusted income from continuing operations was $1.37 compared with $1.04 in the corresponding period of 2009.
- Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) attributable to continuing operations increased approximately 28% to $80.4 million as compared to $63.0 million in the 2009 period. Adjusted EBITDA excludes the aforementioned charges.
Results of discontinued operations in the second quarter of 2010 included a net loss of $1.3 million or $0.04 per diluted share as compared to a net loss of $0.3 million or $0.01 per diluted share in the second quarter of 2009. For the first six months of 2010, discontinued operations reflected a net loss of $2.3 million or $0.08 per diluted share compared to a net loss of $0.4 million or $0.01 per diluted share in the corresponding period of 2009.
For the second quarter of 2010, the Company reported net income of $18.9 million or $0.62 per diluted share compared to $17.1 million or $0.59 per diluted share in the second quarter of 2009. For the first six months of 2010, net income was $28.2 million or $0.92 per diluted share versus net income of $35.1 million or $1.19 per diluted share for the first six months of 2009. These results included charges for restructuring, legal settlements and merger and acquisition activities and gains or losses on sales of assets as discussed above as well as the results from discontinued operations.
At July 4, 2010, the Company reported cash and cash equivalents of $191.1 million and outstanding debt under its credit agreement of $232.0 million.
Full-Year 2010 Outlook
As reported on July 20, 2010, Gentiva's outlook for 2010 reflects revenue between $1.20 billion to $1.23 billion and adjusted income from continuing operations of $2.67 to $2.75 on a diluted per share basis. The outlook for adjusted income from continuing operations excludes the costs of restructuring, legal settlements and merger and acquisition activities, the results of discontinued operations and the impact of pending and future acquisitions.
Gentiva expects to further revise its full year 2010 outlook after the consummation of the Odyssey HealthCare, Inc. acquisition, which was announced on May 24, 2010 and is expected to close during the 2010 third quarter.
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 Webcast Details
The Company will comment further on its second quarter 2010 results during its conference call and live webcast to be held Thursday, July 29, 2010 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 # 86731520. The webcast is an audio-only, one-way event. Webcast listeners who wish to ask questions must participate in the conference call. Log onto http://investors.gentiva.com/events.cfm to hear the webcast. A replay of the call will be available on July 30 and will remain available continuously through August 6. 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: 86731520. Visit http://investors.gentiva.com/events.cfm to access the webcast 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 48 hours after the call.
About Gentiva Health Services, Inc.
Gentiva Health Services, Inc. is a leading provider of home health and hospice 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; 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
(unaudited tables and notes follow)
Financial and Investor Contact:
Eric Slusser
770-951-6101
eric.slusser@gentiva.com
or Brandon Ballew
770-221-6700
brandon.ballew@gentiva.com
Media Contact:
Scott Cianciulli
Brainerd Communicators
212-986-6667
cianciulli@braincomm.com
Gentiva Health Services, Inc. and Subsidiaries
Condensed Consolidated Financial Statements and Supplemental Information
(Unaudited)
(in 000's, except per share data) 2nd Quarter
-----------
2010 2009
---- ----
Statements of Income
--------------------
Net revenues $297,099 $284,838
Cost of services sold 135,249 134,144
------- -------
Gross profit 161,850 150,694
Selling, general and administrative
expenses (125,535) (120,529)
Gain (loss) on sale of assets, net - (85)
Interest income 650 817
Interest expense and other (1,766) (2,688)
------ ------
Income from continuing operations before
income taxes and equity in net earnings
from affiliate 35,199 28,209
Income tax expense (15,415) (11,104)
Equity in net earnings of affiliate 439 263
--- ---
Income from continuing operations 20,223 17,368
Discontinued operations, net of tax (1,304) (273)
------ ----
Net income $18,919 $17,095
======= =======
Earnings per Share
------------------
Basic earnings per share:
Income from continuing operations $0.68 $0.60
Discontinued operations, net of tax (0.04) (0.01)
----- -----
Net income $0.64 $0.59
===== =====
Weighted average shares outstanding 29,770 28,959
====== ======
Diluted earnings per share:
Income from continuing operations $0.66 $0.59
Discontinued operations, net of tax (0.04) (0.01)
----- -----
Net income $0.62 $0.58
===== =====
Weighted average shares outstanding 30,618 29,396
====== ======
Condensed Balance Sheets
------------------------
ASSETS July 4, 2010 Jan 3, 2010
------ ------------ -----------
Cash and cash equivalents $191,066 $152,410
Accounts receivable, net (A) 168,541 182,192
Deferred tax assets 14,300 17,205
Prepaid expenses and other current assets 25,358 13,904
Current assets held for sale - 2,549
--- -----
Total current assets 399,265 368,260
Note receivable from affiliate 25,000 25,000
Investment in affiliate 25,100 24,336
Fixed assets, net 65,258 65,913
Intangible assets, net 253,085 251,793
Goodwill 304,080 299,534
Non-current assets held for sale - 8,689
Other assets 26,943 24,410
------ ------
Total assets $1,098,731 $1,067,935
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Accounts payable $5,967 $8,982
Payroll and related taxes 24,701 23,463
Deferred revenue 40,149 36,359
Medicare liabilities 16,145 7,525
Obligations under insurance programs 44,037 41,636
Other accrued expenses 35,465 47,045
Current portion of long-term debt - 5,000
--- -----
Total current liabilities 166,464 170,010
Long-term debt 232,000 232,000
Deferred tax liabilities, net 71,895 73,259
Other liabilities 23,602 21,503
Shareholders' equity 604,770 571,163
------- -------
Total liabilities and shareholders'
equity $1,098,731 $1,067,935
========== ==========
Common shares outstanding 29,754 29,480
====== ======
(in 000's, except per share data) Six Months
----------
2010 2009
---- ----
Statements of Income
--------------------
Net revenues $594,230 $561,202
Cost of services sold 275,839 268,025
------- -------
Gross profit 318,391 293,177
Selling, general and administrative expenses (264,771) (240,033)
Gain (loss) on sale of assets, net 103 5,747
Interest income 1,314 1,618
Interest expense and other (3,514) (5,880)
Income from continuing operations before income
taxes and equity in net earnings from affiliate 51,523 54,629
Income tax expense (21,757) (19,634)
Equity in net earnings of affiliate 763 541
Income from continuing operations 30,529 35,536
Discontinued operations, net of tax (2,285) (419)
------ ----
Net income $28,244 $35,117
======= =======
Earnings per Share
------------------
Basic earnings per share:
Income from continuing operations $1.03 $1.22
Discontinued operations, net of tax (0.08) (0.01)
Net income $0.95 $1.21
===== =====
Weighted average shares outstanding 29,715 28,952
====== ======
Diluted earnings per share:
Income from continuing operations $1.00 $1.20
Discontinued operations, net of tax (0.08) (0.01)
Net income $0.92 $1.19
===== =====
Weighted average shares outstanding 30,568 29,606
====== ======
Condensed Balance Sheets
------------------------
ASSETS
------
Cash and cash equivalents
Accounts receivable, net (A)
Deferred tax assets
Prepaid expenses and other current assets
Current assets held for sale
Total current assets
Note receivable from affiliate
Investment in affiliate
Fixed assets, net
Intangible assets, net
Goodwill
Non-current assets held for sale
Other assets
Total assets
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Accounts payable
Payroll and related taxes
Deferred revenue
Medicare liabilities
Obligations under insurance programs
Other accrued expenses
Current portion of long-term debt
Total current liabilities
Long-term debt
Deferred tax liabilities, net
Other liabilities
Shareholders' equity
Total liabilities and shareholders' equity
Common shares outstanding
(A) Accounts receivable, net included an allowance for doubtful
accounts of $10.4 million and $9.3 million at July 4, 2010 and
January 3, 2010, respectively. Accounts receivable, net included
$2.0 million at July 4, 2010 and $10.2 million at January 3, 2010
relating to discontinued operations; such receivables were retained
by the Company following the disposition of the respiratory therapy
and home medical equipment and infusion therapy businesses in
February 2010.
(in 000's)
Six Months
----------
Condensed Statements of Cash Flows 2010 2009
---------------------------------- ---- ----
OPERATING ACTIVITIES:
Net income $28,244 $35,117
Adjustments to reconcile net income to net
cash
provided by operating activities:
Depreciation and amortization 8,807 11,145
Amortization of debt issuance costs 614 681
Provision for doubtful accounts 4,903 4,045
Equity-based compensation expense 3,191 3,466
Windfall tax benefits associated with
equity-based compensation (711) (585)
Realized loss on auction rate securities - 1,000
Gain on sale of assets, net (169) (5,747)
Equity in net earnings of affiliate (763) (541)
Deferred income tax expense 1,542 1,458
Changes in assets and liabilities, net of
effects from acquisitions and
dispositions:
Accounts receivable 8,748 (1,082)
Prepaid expenses and other current assets (9,158) (1,602)
Current liabilities 2,193 1,836
Other, net 538 271
--- ---
Net cash provided by operating activities 47,979 49,462
------ ------
INVESTING ACTIVITIES:
Purchase of fixed assets (5,613) (12,403)
Proceeds from sale of assets and businesses 8,796 5,619
Acquisition of businesses (8,500) (2,200)
Sale of short-term investments available-
for-sale - 2,550
Net cash used in investing activities (5,317) (6,434)
------ ------
FINANCING ACTIVITIES:
Proceeds from issuance of common stock 5,612 5,910
Windfall tax benefits associated with
equity-based compensation 711 585
Debt repayments (5,000) (14,000)
Repurchases of common stock (4,985) (4,813)
Repayment of capital lease obligations (344) (441)
---- ----
Net cash used in financing activities (4,006) (12,759)
------ -------
Net change in cash and cash equivalents 38,656 30,269
Cash and cash equivalents at beginning of
period 152,410 69,201
Cash and cash equivalents at end of period $191,066 $99,470
======== =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Interest paid $3,219 $5,172
Income taxes paid $25,054 $15,831
(in 000's)
Supplemental Information 2nd Quarter
------------------------ -----------
2010 2009
---- ----
Segment Information (1)
Net revenues
Home Health $276,231 $266,587
Hospice 20,868 18,251
------ ------
Total net revenues $297,099 $284,838
======== ========
Operating contribution (4)
Home Health $60,924 $51,608
Hospice 4,084 2,723
----- -----
Total operating contribution 65,008 54,331
Corporate administrative expenses (24,264) (19,943)
Gain (loss) on sale of assets, net - (85)
Depreciation and amortization (4,429) (4,223)
Interest expense and other, net (5) (1,116) (1,871)
Income from continuing operations before
income taxes and equity in net earnings
from affiliate $35,199 $28,209
======= =======
2nd Quarter
-----------
2010 2009
---- ----
Net Revenues by Major Payer Source:
Medicare
Home Health $207,376 $194,140
Hospice 19,396 16,714
------ ------
Total Medicare 226,772 210,854
Medicaid and local government 18,648 23,328
Commercial insurance and other:
Paid at episodic rates 21,303 19,164
Other 30,376 31,492
Total commercial insurance and other 51,679 50,656
------ ------
Total net revenues $297,099 $284,838
======== ========
A reconciliation of Adjusted EBITDA to
Net income follows: 2nd Quarter
-----------
2010 2009
---- ----
Adjusted EBITDA (2) $43,220 $34,997
Gain (loss) on sale of assets, net - (85)
Restructuring, legal settlement and
merger and acquisition costs (4) (2,476) (609)
EBITDA 40,744 34,303
Depreciation and amortization (4,429) (4,223)
Interest expense and other, net (5) (1,116) (1,871)
------ ------
Income from continuing operations before
income taxes and equity in net earnings
from affiliate 35,199 28,209
Income tax expense (6) (15,415) (11,104)
Equity in net earnings of affiliate 439 263
--- ---
Income from continuing operations 20,223 17,368
Discontinued operations, net of tax (3) (1,304) (273)
------ ----
Net income $18,919 $17,095
======= =======
A reconciliation of Adjusted income from
continuing operations to Income from
continuing operations follows:
2nd Quarter
-----------
2010 2009
---- ----
Adjusted income from continuing
operations $22,666 $17,822
Gain (loss) on sale of assets, net - (85)
Restructuring, legal settlement and
merger and acquisition costs (2,476) (609)
Tax impact of items excluded from income
from continuing operations 33 240
Income from continuing operations $20,223 $17,368
======= =======
(in 000's)
Supplemental Information Six Months
------------------------ ----------
2010 2009
---- ----
Segment Information (1)
Net revenues
Home Health $553,704 $525,341
Hospice 40,526 35,861
------ ------
Total net revenues $594,230 $561,202
======== ========
Operating contribution (4)
Home Health $105,616 $97,321
Hospice 7,622 4,704
----- -----
Total operating contribution 113,238 102,025
Corporate administrative expenses (50,811) (40,578)
Gain (loss) on sale of assets, net 103 5,747
Depreciation and amortization (8,807) (8,303)
Interest expense and other, net (5) (2,200) (4,262)
Income from continuing operations before
income taxes and equity in net earnings
from affiliate $51,523 $54,629
======= =======
Six Months
----------
2010 2009
---- ----
Net Revenues by Major Payer Source:
Medicare
Home Health $415,052 $380,210
Hospice 37,593 33,016
------ ------
Total Medicare 452,645 413,226
Medicaid and local government 37,949 49,832
Commercial insurance and other:
Paid at episodic rates 42,176 35,294
Other 61,460 62,850
Total commercial insurance and other 103,636 98,144
------- ------
Total net revenues $594,230 $561,202
======== ========
A reconciliation of Adjusted EBITDA to
Net income follows: Six Months
----------
2010 2009
---- ----
Adjusted EBITDA (2) $80,394 $62,951
Gain (loss) on sale of assets, net 103 5,747
Restructuring, legal settlement and
merger and acquisition costs (4) (17,967) (1,504)
EBITDA 62,530 67,194
Depreciation and amortization (8,807) (8,303)
Interest expense and other, net (5) (2,200) (4,262)
------ ------
Income from continuing operations before
income taxes and equity in net earnings
from affiliate 51,523 54,629
Income tax expense (6) (21,757) (19,634)
Equity in net earnings of affiliate 763 541
--- ---
Income from continuing operations 30,529 35,536
Discontinued operations, net of tax (3) (2,285) (419)
------ ----
Net income $28,244 $35,117
======= =======
A reconciliation of Adjusted income from
continuing operations to Income from
continuing operations follows:
Six Months
----------
2010 2009
---- ----
Adjusted income from continuing
operations $41,968 $30,752
Gain (loss) on sale of assets, net 103 5,747
Restructuring, legal settlement and
merger and acquisition costs (17,967) (1,504)
Tax impact of items excluded from income
from continuing operations 6,425 541
Income from continuing operations $30,529 $35,536
======= =======
Notes:
1) The Company's senior management evaluates performance and allocates
resources based on operating contributions of the operating
segments, which exclude corporate administrative expenses,
depreciation, amortization, and interest expense (net), but include
revenues and all other costs directly attributable to the specific
segment.
2) Adjusted EBITDA, a non-GAAP financial measure, is defined as income
before interest expense (net of interest income), income taxes,
depreciation and amortization and excluding charges relating
primarily to restructuring, legal settlements and merger and
acquisition activities and gain (loss) on sales of assets, net.
Management uses Adjusted EBITDA to evaluate overall performance and
compare current operating results with other companies in the
healthcare industry. Adjusted 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
Adjusted 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. Adjusted EBITDA
presented in the Supplemental Information relates to the Company's
continuing operations.
Adjusted income from continuing operations is defined as income from
continuing operations, excluding charges relating to restructuring,
legal settlements and merger and acquisition activities and gain
(loss) on sales of assets, net of taxes.
3) On February 1, 2010, the Company consummated the sale of its
respiratory therapy and home medical equipment ("HME") and infusion
therapy ("IV") businesses pursuant to an asset purchase agreement.
Total consideration relating to the sale was approximately $16.4
million, consisting of (i) approximately $8.5 million of cash
proceeds paid to the Company on the closing date, (ii) approximately
$2.5 million of payments by the buyer associated with operating and
capital lease obligations of the HME and IV businesses and (iii)
approximately $5.4 million of cash in two escrow funds which will be
released to the Company following the one year anniversary date of
closing based on the achievement of certain post-closing cash
collection targets and the resolution of certain post-closing
liabilities. In connection with the transaction, the Company
retained net accounts receivable of approximately $10 million and
liabilities of approximately $3 million associated with the HME and
IV businesses.
The financial results of these two operating segments are reported as
discontinued operations in the accompanying condensed consolidated
financial statements. HME and IV net revenues, operating results
and the gain on sale of business for the periods presented were as
follows (dollars in thousands):
2nd Quarter Six Months
----------- ----------
2010 2009 2010 2009
---- ---- ---- ----
Net revenues $- $13,265 $3,956 $25,818
=== ======= ====== =======
Loss before income taxes $(2,171) $(423) $(5,498) $(649)
Gain on sale of business - - 66 -
Income tax benefit 867 150 3,147 230
--- --- ----- ---
Discontinued operations, net of
tax $(1,304) $(273) $(2,285) $(419)
======= ===== ======= =====
The condensed balance sheet as of January
3, 2010 reflects the classification of
certain assets of these businesses as
held for sale and presents the debt
repayment required for lenders approval
of the transaction as a current
liability.
Capital expenditures related to
discontinued operations amounted to $0.3
million for the first six months of 2010
and $1.4 million and $2.7 million for
the second quarter and first six months
of 2009, respectively. Depreciation and
amortization expense relating to
discontinued operations amounted to $1.4
million and $2.8 million for the second
quarter and first six months of 2009,
respectively. There was no depreciation
and amortization expense for the 2010
periods as the assets were treated as
held for sale as of January 3, 2010.
4) Operating contribution and EBITDA for the second quarter and first
six months of 2010, included charges relating to restructuring,
legal settlements and merger and acquisition activities of $2.5
million and $18.0 million, respectively, and $0.6 million and $1.5
million, respectively, for the corresponding periods in 2009.
For the second quarter of 2010, the Company recorded (i) a net
reduction in charges related to legal settlements of $1.4 million
which included a reduction of $1.8 million associated with the
reclassification of the tax impact of the settlement charges
recorded in the first quarter of 2010 and incremental legal fees of
approximately $0.4 million, both relating to the settlement of the
three-year old commercial contractual dispute involving the
Company's former subsidiary, CareCentrix, (ii) restructuring costs
of $1.9 million and (iii) merger and acquisition costs of $2.0
million, primarily relating to the pending acquisition of Odyssey
HealthCare, Inc.
The charges for the six months of 2010 included (i) settlement costs
and legal fees of $4.2 million related to a three-year old
commercial contractual dispute involving the Company's former
subsidiary, CareCentrix, (ii) incremental charges of $9.5 million in
connection with an agreement in principle, subject to final
approvals, between the Company and the Department of Health and
Human Services, Office of the Inspector General to resolve the
matters which were subject to a 2003 OIG subpoena relating to the
Company's cost reports for the 1998 to 2000 periods, (iii)
restructuring costs of $2.3 million and (iv) merger and acquisition
costs of $2.0 million.
These charges were reflected as follows for segment reporting
purposes (dollars in millions):
2nd Quarter Six Months
----------- ----------
2010 2009 2010 2009
---- ---- ---- ----
Home Health $- $0.4 $9.5 $0.5
Hospice 0.1 - 0.1 -
Corporate administrative expenses 2.4 0.2 8.4 1.0
--- --- --- ---
Total $2.5 $0.6 $18.0 $1.5
==== ==== ===== ====
5) Interest expense and other, net for the second quarter and first six
months of 2009 included realized losses on auction rate securities
of approximately $0.6 million and $1.0 million, respectively.
6) The Company's effective tax rate relating to its continuing
operations was 42.9% and 41.6% for the second quarter and first six
months of 2010, respectively as compared to 39.4% and 35.9% for the
second quarter and first six months of 2009.
During the second quarter of 2010, the
Company reclassified the tax benefit
associated with the CareCentrix legal
settlement from income taxes to net
legal settlement costs since the benefit
is expected to be realized by and
reimbursed to Gentiva from CareCentrix.
Excluding the impact of the
reclassification, the Company's
effective tax rate relating to its
continuing operations would have been
39.9% and 39.5% for the second quarter
and first six months of 2010,
respectively.
During the first six months of 2009, the
Company recorded a pre-tax gain, net of
transaction costs, of $5.7 million
relating to the sale of several branch
offices that specialized in pediatric
home health care services. There was no
income tax expense relating to the gain
on sale of assets in 2009 due to the
utilization of a capital loss
carryforward. Excluding the impact of
the non-recurring gain, the Company's
effective tax rate relating to its
continuing operations would have been
41.1% for the first six months of 2009.
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; the impact on our Company of recently passed healthcare reform legislation and its subsequent implementation through governmental regulations; changes in Medicare, Medicaid and commercial payer reimbursement levels; the outcome of any inquiries into the Company's operations and business practices by governmental authorities; the Company's ability to consummate the Odyssey acquisition and effectively integrate Odyssey's operations; 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, pandemic outbreaks, 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; 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 January 3, 2010.
SOURCE Gentiva Health Services, Inc.
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