NASHVILLE, Tenn.--(BUSINESS WIRE)--April 27, 2004--Renal Care
Group, Inc. (NYSE:RCI - News) today announced results for the quarter ended
March 31, 2004, and increased its EPS objective for fiscal year 2004.
The Company also announced a three-for-two stock split.
Gary Brukardt, the Company's president and chief executive
officer, commented, "We successfully completed the acquisition of
National Nephrology Associates ("NNA") in early April. Immediately
after we announced the acquisition agreement in February, associates
from various clinical and operational disciplines of both companies
came together to identify and implement best demonstrated practices.
We believe we can achieve better results for our patients by
implementing these best practices. I thank all 8,000 associates of the
combined company for their hard work, flexibility and dedication to
delivering optimal care as we continue to execute the transition and
integration of NNA's operations into Renal Care Group."
For the first quarter ended March 31, 2004, Renal Care Group's net
revenues increased 14.8% to $278.0 million compared with net revenues
of $242.1 million for the same period in 2003. Net income for the
first quarter of 2004 rose 38.3% to $30.1 million, or $0.63 per
diluted share, compared with net income of $21.8 million, or $0.44 per
diluted share, in the first quarter of 2003.
David Dill, executive vice president and chief financial officer
of Renal Care Group, said, "We are pleased to report excellent results
for the first quarter of 2004. Net income for the period was
positively impacted by favorable resolutions of contractual issues
with certain payors, which contributed approximately $0.06 per diluted
share to net income in the first quarter. Excluding the impact of
these resolutions, our non-GAAP earnings per share grew approximately
11.8% compared with non-GAAP earnings per share for the first quarter
of 2003."
Mr. Dill added, "In light of the progress we have made with the
NNA integration and our first quarter results, we expect to achieve
earnings per share of between $2.54 and $2.64 for 2004. This revised
EPS objective takes into account the substantial completion of the
share repurchase plan we announced in late October 2003 and the
favorable resolutions of these payor issues."
The Company also announced that its Board of Directors has
approved a three-for-two stock split to be effected in the form of a
stock dividend. One additional share of common stock will be issued
for every two shares held by shareholders of record as of the close of
business on May 7, 2004. The additional shares will be distributed on
or about May 24, 2004. Renal Care Group currently has approximately
44.5 million shares of common stock outstanding and approximately 9.7
million treasury shares.
Mr. Brukardt said, "The Board's decision to approve a
three-for-two stock split was based on the strong financial outlook
for the Company coupled with our goals to broaden our shareholder base
and provide greater market liquidity."
GAAP results for the quarter ended March 31, 2004, give effect to
resolutions of contractual issues with payors that were unusual in
amount and timing, which favorably impacted earnings per share by
$0.06 per diluted share. Excluding the effect of these resolutions,
non-GAAP net income for the quarter ended March 31, 2004, was $27.2
million, or $0.57 per diluted share. GAAP results for the quarter
ended March 31, 2003, give effect to a non-recurring, after-tax charge
of $0.07 per diluted share, related to a retirement package for the
Company's former chairman and founder. Excluding the effect of the
retirement package, non-GAAP net income for the quarter ended March
31, 2003, was $25.1 million, or $0.51 per diluted share. Renal Care
Group has decided to present the non-GAAP information to give
investors a means of comparing the Company's normalized operational
performance in the quarter ended March 31, 2004, with its operational
performance in the same period in 2003 before the impact of the
resolutions of the payor contract issues and the one-time charge
related to the retirement package. A reconciliation between the
non-GAAP results and the Company's GAAP results accompanies this press
release.
Renal Care Group will hold a conference call to discuss this press
release on Wednesday, April 28, 2004, at 11:00 a.m. Eastern Time. A
listen-only simulcast, as well as a 12-month replay, of the conference
call to discuss this press release will be available online at the
Company's website at www.renalcaregroup.com.
Renal Care Group, Inc. is a specialized dialysis services company
that provides care to patients with kidney disease. The Company
currently treats over 28,000 patients at more than 390 owned
outpatient dialysis facilities, in addition to providing acute
dialysis services at more than 190 hospitals. Over 8,000 associates
provide services across the Company's 30-state network. More
information about Renal Care Group, Inc. may be found at
www.renalcaregroup.com.
Certain statements in this press release, particularly those of
Mr. Brukardt and Mr. Dill, constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements, which are usually preceded by
words like expect, plan, intend, believe, will and the like, include
statements that necessarily depend on future events. These
forward-looking statements reflect management's expectations and are
based upon currently available information. These forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause actual results, performance or achievements of
Renal Care Group to differ materially from those expressed in or
implied by the forward-looking statements, including risks related to:
changes in the Medicare and Medicaid programs; payment reductions by
private insurers, hospitals or managed care organizations; changes in
the health care delivery, financing or reimbursement systems; risks
related to the drug Epogen (EPO); compliance with health care and
other applicable laws; the integration of acquired companies; and
dependence on executive officers. These and other factors affecting
the Company are discussed in more detail in Renal Care Group's reports
filed with the Securities and Exchange Commission, including without
limitation Renal Care Group's annual report on Form 10-K for the year
ended December 31, 2003, as amended, its current report on Form 8-K as
filed with the SEC on April 19, 2004; and any quarterly reports on
Form 10-Q filed after that annual report. Copies of these filings are
available from Renal Care Group upon request.
RENAL CARE GROUP, INC.
Unaudited Condensed Consolidated Income Statements
(in thousands, except per share data)
Three Months Ended
March 31,
--------------------
2004 2003
--------- ---------
Net revenue $ 278,028 $ 242,143
Operating costs and expenses:
Patient care costs 179,372 157,477
General and administrative expenses 22,676 26,288
Provision for doubtful accounts 7,110 6,412
Depreciation and amortization 12,163 10,298
--------- ---------
Total operating costs and expenses 221,321 200,475
Income from operations 56,707 41,668
Interest expense, net 965 285
--------- ---------
Income before minority interest and income taxes 55,742 41,383
Minority interest 7,214 6,308
--------- ---------
Income before income taxes 48,528 35,075
Provision for income taxes 18,441 13,323
--------- ---------
Net income $ 30,087 $ 21,752
========= =========
Diluted net income per share $ 0.63 $ 0.44
========= =========
Diluted weighted average shares outstanding 47,482 49,430
========= =========
RENAL CARE GROUP, INC.
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
March 31, December 31,
2004 2003
---------- -----------
(unaudited)
ASSETS:
Current assets:
Cash and cash equivalents $ 37,606 $ 50,295
Accounts receivable, net 188,729 173,679
Other current assets 47,089 68,130
---------- -----------
Total current assets 273,424 292,104
Property, plant and equipment, net 236,008 224,397
Goodwill, intangible assets and other assets,
net 354,470 303,372
---------- -----------
TOTAL ASSETS $ 863,902 $ 819,873
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Total current liabilities $ 161,220 $ 169,437
Long-term debt, net of current portion 143,171 2,652
Other long-term liabilities 80,787 76,939
---------- -----------
Total liabilities 385,178 249,028
---------- -----------
Stockholders' equity:
Common stock, $0.01 par value, 90,000
shares authorized, 54,136 and 53,643
shares issued, respectively 541 536
Treasury stock, 9,628 and 6,641 shares,
respectively (370,040) (234,404)
Additional paid-in capital 388,106 374,683
Retained earnings 460,117 430,030
---------- -----------
Total stockholders' equity 478,724 570,845
---------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 863,902 $ 819,873
========== ===========
RENAL CARE GROUP, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Three Months Ended
March 31,
-------------------
2004 2003
--------- --------
Operating Activities:
Net income $ 30,087 $ 21,752
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 12,163 10,298
Loss on sale of property and equipment 154 136
Income applicable to minority interest 7,214 6,308
Distributions to minority shareholders (3,561) (9,620)
Changes in operating assets and
liabilities, net of effects from
acquisitions (600) 3,306
--------- --------
Net cash provided by operating
activities 45,457 32,180
--------- --------
Investing Activities:
Purchases of property and equipment, net (19,118) (17,896)
Cash paid for acquisitions, net of cash
acquired (55,768) -
Change in other assets (3,173) 225
--------- --------
Net cash used in investing activities (78,059) (17,671)
--------- --------
Financing Activities:
Net borrowings (payments) under line of credit
and capital leases 25,921 (7,420)
Net proceeds from issuance of long-term debt 120,000 -
Net proceeds from issuance of common stock 9,628 3,047
Repurchase of treasury shares (135,636) (4,380)
--------- --------
Net cash provided by (used in)
financing activities 19,913 (8,753)
--------- --------
(Decrease) increase in cash and cash equivalents (12,689) 5,756
Cash and cash equivalents, at beginning of year 50,295 38,359
--------- --------
Cash and cash equivalents, at end of year $ 37,606 $ 44,115
========= ========
RENAL CARE GROUP, INC.
Supplemental GAAP to Non-GAAP Reconciliation
(unaudited, in thousands, except per share data)
Three Months Ended
March 31,
--------------------------------------------------------
2004 2003
---------------------------- ---------------------------
Diff- Non- Diff- Non-
GAAP(1) erence GAAP(2) GAAP(1) erence GAAP(3)
--------- -------- --------- --------- ------- ---------
Net revenue $278,028 $(4,700) $273,328 $242,143 $ - $242,143
Operating
costs and
expenses:
Patient
care costs 179,372 - 179,372 157,477 - 157,477
General and
adminis-
trative
expenses 22,676 - 22,676 26,288 (5,430) 20,858
Provision
for
doubtful
accounts 7,110 - 7,110 6,412 - 6,412
Depreci-
ation and
amorti-
zation 12,163 - 12,163 10,298 - 10,298
--------- -------- --------- --------- ------- ---------
Total
operating
costs and
expenses 221,321 - 221,321 200,475 (5,430) 195,045
Income from
operations 56,707 (4,700) 52,007 41,668 5,430 47,098
Interest
expense, net 965 - 965 285 - 285
--------- -------- --------- --------- ------- ---------
Income before
minority
interest and
income taxes 55,742 (4,700) 51,042 41,383 5,430 46,813
Minority
interest 7,214 - 7,214 6,308 - 6,308
--------- -------- --------- --------- ------- ---------
Income before
income taxes 48,528 (4,700) 43,828 35,075 5,430 40,505
Provision for
income taxes 18,441 (1,786) 16,655 13,323 2,063 15,386
--------- -------- --------- --------- ------- ---------
Net income $30,087 $(2,914) $27,173 $21,752 $3,367 $25,119
========= ======== ========= ========= ======= =========
Diluted net
income per
share $0.63 $(0.06) $0.57 $0.44 $0.07 $0.51
========= ======== ========= ========= ======= =========
Weighted
average
shares
outstanding 47,482 47,482 47,482 49,430 49,430 49,430
========= ======== ========= ========= ======= =========
(1) Reflects operating results based on accounting principles
generally accepted in the United States (GAAP).
(2) Non-GAAP amounts exclude resolutions of payor contract issues that
were unusual in amount and timing.
(3) Non-GAAP amounts exclude a Board-approved retirement package
recorded in the first quarter of 2003 and the related tax effect.
RENAL CARE GROUP, INC.
Supplemental Operating Data and Reconciliation
of Net Income to EBITDA(1)
(unaudited, dollars in thousands, except per treatment data)
Three Months Ended
March 31,
----------------------
2004 2003
---------- ----------
Operating Data:
Patients 22,619 20,683
Treatments 860,249 783,841
Same-market treatment growth 3.5% 5.5%
Same-market revenue growth 8.3% 10.2%
Patient revenue per treatment $ 323 $ 308
Reconciliation of Net Income to EBITDA(1):
Net income $ 30,087 $ 21,752
Non-recurring retirement charge - 5,430
Depreciation and amortization 12,163 10,298
Interest expense, net 965 285
Minority interest 7,214 6,308
Provision for income taxes 18,441 13,323
---------- ----------
EBITDA(1) $ 68,870 $ 57,396
========== ==========
(1) The Company defines EBITDA as net earnings or loss before minority
interest, interest expense (net), provision for income taxes,
depreciation and amortization and all non-cash charges, such as
the non-recurring charge for the retirement package for our former
chairman and founder recorded in the first quarter of 2003. The
Company includes EBITDA because it generally considers EBITDA to
be a good indicator of the Company's ability to generate cash flow
in order to fund liabilities and reinvest in the Company and its
business. EBITDA is not a measurement of financial performance
under GAAP and should not be considered a substitute for net
income or loss as a measure of performance, or to cash flow as a
measure of liquidity.
Contact:
Renal Care Group, Inc., Nashville
Terry L. Proveaux, 615-345-5577
Press Releases