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Renal Care Group, Inc. (Nasdaq/NM:RCGI) today announced financial results for the second quarter and six months ended June 30, 1997.
Mr. Sam A. Brooks, Jr., president and chief executive officer of Renal Care Group, Inc., said, "We are very pleased to report that our record financial performance in the first quarter of this year continued into the second quarter. Our success at assimilating acquisitions into our existing network and improving our same-store revenue growth continues to be the catalyst for this strong performance. Our financial success, coupled with the healthy pipeline of potential acquisitions, gives us confidence about the remainder of the year and beyond."
Revenues for the second quarter ended June 30, 1997, increased 62% to $51,666,000 compared with revenues of $31,826,000 for the same period in 1996. The 1996 revenues have been restated for 1996 pooling-of-interests transactions. Net income before nonrecurring merger costs increased 57% to $4,621,000, or $0.20 per share, compared with pro forma net income of $2,944,000, or $0.15 per share, in the same period last year, again restated for 1996 pooling-of-interests transactions.
Revenues for the six months ended June 30, 1997, increased 56% to $97,775,000 compared with pro forma revenues of $62,735,000 for the same period in 1996. The 1996 revenues have been restated for 1996 pooling-of-interests transactions. Net income before nonrecurring merger costs increased 55% to $8,915,000, or $0.39 per share, compared with pro forma net income of $5,769,000, or $0.29 per share, in the same period last year, again restated for 1996 pooling-of-interests transactions.
Same-store treatment and revenue growth were 7% and 17%, respectively, for the quarter ended June 30, 1997. The Company's days revenues in accounts receivable at June 30, 1997, were 66, substantially below the industry average.
During the second quarter, Renal Care Group acquired six outpatient dialysis facilities known as Bay Area Dialysis Services of Corpus Christi, Texas, and entered into a long-term agreement to manage the practice of the five nephrologists associated with the facilities. Bay Area Dialysis provides treatment to approximately 330 patients as well as acute, inpatient dialysis treatment services to two local hospitals.
Renal Care Group also completed two previously announced transactions. In the first transaction, Renal Care Group acquired 51% of the assets of a dialysis operation in Toms River, New Jersey, providing services to 260 patients, and will construct a state-of-the-art dialysis center to serve the existing patients and accommodate future growth. In the second transaction, Renal Care Group entered into an agreement with Southern Ocean County Hospital of Manahawkin, New Jersey, to jointly develop a new dialysis facility. Renal Care Group will retain 51% ownership and provide management services to the joint venture which will serve approximately 40 patients.
To date, the Company has announced transactions totaling approximately 1,600 patients, including consolidated joint ventures, and has opened six de novo facilities of which four began operations in the second quarter of 1997.
Mr. Brooks added, "Our physician-driven heritage continues to provide us with a consistent pipeline of high quality acquisitions, and our physicians' commitment to quality care is another distinguishing component of the Renal Care Group strategy."
Also during the second quarter, Renal Care Group's Board of Directors approved a three-for-two stock split effected in the form of a 50% stock dividend. One additional share of common stock was issued for every two shares held by shareholders of record at the close of business on July 7, 1997. The additional shares were distributed on July 25, 1997. All financial data has been adjusted for the stock split.
Renal Care Group, Inc. is a nephrology services company that was founded in June 1995 to focus on the provision of care to patients with kidney disease, including patients suffering from chronic kidney failure. The Company currently provides dialysis and ancillary services to approximately 6,800 patients through 104 owned and managed outpatient dialysis centers in 15 states, in addition to providing acute dialysis services in 58 hospitals.
This press release contains forward-looking statements that involve various risks and uncertainties. Actual results could differ materially from those contained in these forward-looking statements due to certain factors, including business and economic conditions and availability of financing. These and other risks and uncertainties are detailed in the Company's reports filed with the SEC.
RENAL CARE GROUP, INC.
Unaudited Consolidated Statements of Earnings
(In thousands, except share data)
Three Months Ended Six Months Ended
June 30, June 30,
Actual Actual Actual Pro Forma
1997 1996 1997 1996
Net revenues $51,666 $31,826 $97,775 $62,735
Operating costs and expenses 42,071 26,243 79,749 51,495
Depreciation and amortization 2,141 1,112 4,105 2,158
Income from operations 7,454 4,471 13,921 9,082
Interest income, net 99 202 503 147
Income before merger costs,
minority interest and taxes 7,553 4,673 14,424 9,229
Minority interest 218 - 218 -
Net income before merger
costs and income taxes 7,335 4,673 14,206 9,229
Income taxes 2,714 1,729 5,291 3,460
Net income before merger costs $4,621 $2,944 $8,915 $5,769
Earnings per share before
merger costs2 $0.20 $0.15 $0.39 $0.29
Net income after merger costs $4,432 $2,898 $8,726 $5,723
Earnings per share after
merger costs2 $0.19 $0.15 $0.38 $0.29
Weighted average shares outstanding 23,127 19,770 22,908 19,631
1Pro Forma results as if the five Founding Companies had
been combined during the periods presented.
2Adjusted to reflect three-for-two stock split effective July 25, 1997.
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