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NASHVILLE, Tenn.--(BUSINESS WIRE)--Aug. 2, 2005--Renal Care Group, Inc. (NYSE:RCI) today announced that its
non-GAAP diluted net income per share was $0.49 for the quarter ended June 30, 2005, which excludes the effect of
transaction costs incurred in connection with Fresenius Medical Care AG's acquisition of the Company. Renal Care Group's
GAAP diluted net income per share for the quarter was $0.40, which includes the effect of these transaction-related
costs.
Gary A. Brukardt, Renal Care Group's president and chief executive officer, commented, "We are pleased to report
solid financial results for the quarter that reflect the continued strength of our operations. We are continuing the
process of completing the transaction with Fresenius Medical Care that we announced on May 3, 2005. We are responding
to the Federal Trade Commission's request for additional information, and our Special Meeting of Shareholders to vote
on the merger agreement is scheduled for August 24, 2005. We expect that the transaction will close in the fourth
quarter of this year."
For the three months ended June 30, 2005, Renal Care Group's net revenue increased 12.8% to $384.3 million compared
with net revenue of $340.9 million for the same period in 2004. During the second quarter of 2005, the Company recorded
an after-tax charge of $6.4 million, or $0.09 per diluted share, related to transaction costs incurred by the Company
in connection with Fresenius Medical Care AG's acquisition of the Company. Due largely to that charge, GAAP net income
for the second quarter of 2005 decreased $1.0 million, or 3.3%, to $28.2 million compared with net income of $29.2
million in the second quarter of 2004. GAAP diluted net income per share for the second quarter of 2005 decreased
4.8% to $0.40 compared with diluted net income per share of $0.42 in the same quarter of 2004. Excluding the effect
of the transaction-related costs, non-GAAP net income for the quarter increased $5.4 million, or 18.5%, to $34.6 million,
or $0.49 per diluted share.
For the six months ended June 30, 2005, Renal Care Group's net revenues increased 22.5% to $757.8 million compared
with net revenues of $618.9 million for the same period in 2004. GAAP net income for the first half of 2005 rose 4.4%
to $61.8 million compared with GAAP net income of $59.3 million in the first half of 2004. GAAP diluted net income
per share for the six months ended June 30, 2005, increased 4.8% to $0.88 compared with GAAP diluted net income per
share of $0.84 in the same period of 2004.
GAAP results for the six months ended June 30, 2005, give effect to the after-tax charge of $0.09 per diluted share
related to transaction costs associated with the Company's sale to Fresenius Medical Care AG. Excluding the effect
of these costs, non-GAAP net income for the six months ended June 30, 2005, was $68.2 million, or $0.97 per diluted
share. GAAP results for the six months ended June 30, 2004, also give effect to resolutions of contractual issues
with payors that were unusual in amount and timing, which favorably impacted earnings per share by $0.04 per diluted
share. Excluding the effect of these resolutions, non-GAAP net income for the six months ended June 30, 2004, was
$56.4 million, or $0.80 per diluted share.
Renal Care Group has decided to present the non-GAAP information in this press release to give investors a means
of comparing the Company's normalized operational performance for the first half of 2005 with its normalized operational
performance in the same period in 2004, before the impact of the transaction costs and the resolutions of the payor
contract issues. 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, August 3, 2005, at 11:00
a.m. Eastern Time. A listen-only simulcast 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 serves over 31,900 patients at more than 450 outpatient dialysis facilities in addition to providing acute
dialysis services at more than 210 hospitals. Over 9,200 associates provide services across the Company's 34-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 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: the conditions to completion of our transaction with Fresenius Medical Care; the dependence of our profits on the services we provide to a small number of patients who have private insurance; risks related to the drug Epogen (EPO); changes in the Medicare and Medicaid programs; changes in the health care delivery, financing or reimbursement systems; compliance with health care and other applicable laws; and the integration of acquired companies. 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, 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 Six Months Ended
June30, June30,
-------------------- ---------------------
2005 2004 2005 2004
--------- ---------- --------- -----------
Net revenue $384,329 $ 340,854 $757,838 $ 618,882
Operating costs and
expenses:
Patient care costs 254,854 229,849 501,433 409,221
General and
administrative
expenses 36,061 27,341 66,692 50,017
Provision for doubtful
accounts 8,947 8,049 17,150 15,159
Depreciation and
amortization 17,775 14,900 34,562 27,063
--------- ---------- --------- -----------
Total operating
costs
and expenses 317,637 280,139 619,837 501,460
Income from operations 66,692 60,715 138,001 117,422
Interest expense, net 7,981 5,765 15,242 6,730
--------- ---------- --------- -----------
Income before minority
interest and income taxes 58,711 54,950 122,759 110,692
Minority interest 9,132 7,690 18,494 14,904
--------- ---------- --------- -----------
Income before income taxes 49,579 47,260 104,265 95,788
Provision for income taxes 21,362 18,077 42,416 36,518
--------- ---------- --------- -----------
Net income $ 28,217 $ 29,183 $ 61,849 $ 59,270
========= ========== ========= ===========
Diluted net income per
share $ 0.40 $ 0.42 $ 0.88 $ 0.84
========= ========== ========= ===========
Diluted weighted average
shares outstanding 70,780 69,227 70,571 70,225
========= ========== ========= ===========
RENAL CARE GROUP, INC.
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
June 30, December
2005 31, 2004
(unaudited)
ASSETS: ----------- -----------
Current assets:
Cash and cash equivalents $ 12,642 $ 17,931
Accounts receivable, net 288,681 275,373
Other current assets 97,715 79,780
----------- -----------
Total current assets 399,038 373,084
Property, plant and equipment, net 350,918 316,532
Goodwill, intangible assets and other assets,
net 854,428 739,364
----------- -----------
TOTAL ASSETS $1,604,384 $1,428,980
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Total current liabilities $ 261,240 $ 243,905
Long-term debt, net of current portion 563,885 479,645
Other long-term liabilities 121,232 113,309
----------- -----------
Total liabilities 946,357 836,859
----------- -----------
Stockholders' equity:
Common stock, $0.01 par value, 150,000
shares authorized,
82,868 and 82,317 shares issued,
respectively 829 823
Treasury stock, 14,766 and 14,514 shares,
respectively (381,635) (372,249)
Additional paid-in capital 424,422 411,888
Retained earnings 613,712 551,863
Accumulated other comprehensive income
(loss), net of tax 699 (204)
----------- -----------
Total stockholders' equity 658,027 592,121
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,604,384 $1,428,980
=========== ===========
RENAL CARE GROUP, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Six Months Ended
June 30,
-----------------------
2005 2004
----------- -----------
Operating Activities:
Net income $ 61,849 $ 59,270
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 34,562 27,063
Loss on sale of property and equipment 197 564
Distributions to minority shareholders (13,316) (9,906)
Income applicable to minority interest 18,494 14,904
Deferred income taxes 1,147 7,889
Changes in operating assets and
liabilities,
net of effects from acquisitions (9,964) (18,605)
----------- -----------
Net cash provided by operating
activities 92,969 81,179
----------- -----------
Investing Activities:
Purchases of property and equipment (47,087) (45,031)
Cash paid for acquisitions, net of cash
acquired (144,170) (230,746)
Change in other assets 2,540 (5,299)
----------- -----------
Net cash used in investing
activities (188,717) (281,076)
----------- -----------
Financing Activities:
Net proceeds from issuance of long-term
debt 100,000 325,000
Payments on long-term debt (10,157) (4,063)
Net borrowings (payments) under line of
credit and capital leases 1,532 (2,101)
Net proceeds from issuance of common stock 8,470 12,793
Repurchase of treasury shares (9,386) (137,845)
----------- -----------
Net cash provided by financing
activities 90,459 193,784
----------- -----------
Decrease in cash and cash equivalents (5,289) (6,113)
Cash and cash equivalents at beginning of
period 17,931 50,295
----------- -----------
Cash and cash equivalents at end of period $ 12,642 $ 44,182
=========== ===========
RENAL CARE GROUP, INC.
Supplemental GAAP to Non-GAAP Reconciliation
(unaudited, in thousands, except per share data)
Three Months Ended
June 30, 2005
---------------------------------
GAAP(1) Difference Non-GAAP(2)
--------- ----------- -----------
Net revenue $384,329 $ - $ 384,329
Operating costs and expenses:
Patient care costs 254,854 - 254,854
General and administrative
expenses 36,061 (6,700) 29,361
Provision for doubtful accounts 8,947 - 8,947
Depreciation and amortization 17,775 - 17,775
--------- ----------- -----------
Total operating costs and
expenses 317,637 (6,700) 310,937
Income from operations 66,692 6,700 73,392
Interest expense, net 7,981 - 7,981
--------- ----------- -----------
Income before minority interest and
income taxes 58,711 6,700 65,411
Minority interest 9,132 - 9,132
--------- ----------- -----------
Income before income taxes 49,579 6,700 56,279
Provision for income taxes 21,362 339 21,701
--------- ----------- -----------
Net income $ 28,217 $ 6,361 $ 34,578
========= =========== ===========
Diluted net income per share $ 0.40 $ 0.09 $ 0.49
========= =========== ===========
Weighted average shares outstanding 70,780 70,780 70,780
========= =========== ===========
(1) Reported operating results in accordance with accounting
principles generally accepted in the United States(GAAP).
(2) Non-GAAP amounts exclude transaction costs associated with the
Company's sale to Fresenius Medical Care AG recorded in the second
quarter of 2005 and the related tax effect.
RENAL CARE GROUP, INC.
Supplemental GAAP to Non-GAAP Reconciliation
(unaudited, in thousands, except per share data)
Six Months Ended
June 30, 2005
---------------------------------
GAAP(3) Difference Non-GAAP(4)
--------- ----------- -----------
Net revenue $757,838 $ - $ 757,838
Operating costs and expenses:
Patient care costs 501,433 - 501,433
General and administrative
expenses 66,692 (6,700) 59,992
Provision for doubtful accounts 17,150 - 17,150
Depreciation and amortization 34,562 - 34,562
--------- ----------- -----------
Total operating costs and
expenses 619,837 (6,700) 613,137
Income from operations 138,001 6,700 144,701
Interest expense, net 15,242 - 15,242
--------- ----------- -----------
Income before minority interest and
income taxes 122,759 6,700 129,459
Minority interest 18,494 - 18,494
--------- ----------- -----------
Income before income taxes 104,265 6,700 110,965
Provision for income taxes 42,416 339 42,755
--------- ----------- -----------
Net income $ 61,849 $ 6,361 $ 68,210
========= =========== ===========
Diluted net income per share $ 0.88 $ 0.09 $ 0.97
========= =========== ===========
Weighted average shares outstanding 70,571 70,571 70,571
========= =========== ===========
(3) Reported operating results in accordance with accounting
principles generally accepted in the United States (GAAP).
(4) Non-GAAP amounts exclude transaction costs associated with the
Company's sale to Fresenius Medical Care AG recorded in the second
quarter of 2005 and the related tax effect.
RENAL CARE GROUP, INC.
Supplemental GAAP to Non-GAAP Reconciliation
(unaudited, in thousands, except per share data)
Six Months Ended
June 30, 2004
---------------------------------
GAAP(5) Difference Non-GAAP(6)
--------- ----------- -----------
Net revenue $618,882 $ (4,700) $ 614,182
Operating costs and expenses:
Patient care costs 409,221 - 409,221
General and administrative
expenses 50,017 - 50,017
Provision for doubtful accounts 15,159 - 15,159
Depreciation and amortization 27,063 - 27,063
--------- ----------- -----------
Total operating costs and
expenses 501,460 - 501,460
Income from operations 117,422 (4,700) 112,722
Interest expense, net 6,730 - 6,730
--------- ----------- -----------
Income before minority interest and
income taxes 110,692 (4,700) 105,992
Minority interest 14,904 - 14,904
--------- ----------- -----------
Income before income taxes 95,788 (4,700) 91,088
Provision for income taxes 36,518 (1,786) 34,732
--------- ----------- -----------
Net income $ 59,270 $ (2,914) $ 56,356
========= =========== ===========
Diluted net income per share $ 0.84 $ (0.04) $ 0.80
========= =========== ===========
Weighted average shares outstanding 70,225 70,225 70,225
========= =========== ===========
(5) Reported operating results in accordance with accounting
principles generally accepted in the United States (GAAP).
(6) Non-GAAP amounts exclude resolutions of payor contract issues
recorded in the first quarter of 2004 that were unusual in amount
and timing 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 operating data)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
Operating Data:
Patients 31,949 28,748 31,949 28,748
Treatments 1,198,595 1,095,250 2,344,828 1,955,499
Same-market treatment
growth 2.5% 3.7% 2.7% 3.6%
Same-market revenue
growth 5.6% 7.0% 5.8% 7.6%
Patient revenue per
treatment $ 320 $ 311 $ 322 $ 316
Reconciliation of Net
Income to EBITDA(1):
Net income $ 28,217 $ 29,183 $ 61,849 $ 59,270
Depreciation and
amortization 17,775 14,900 34,562 27,063
Interest expense, net 7,981 5,765 15,242 6,730
Minority interest 9,132 7,690 18,494 14,904
Provision for income
taxes 21,362 18,077 42,416 36,518
----------- ----------- ----------- -----------
EBITDA(1) $ 84,467 $ 75,615 $ 172,563 $ 144,485
=========== =========== =========== ===========
(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. 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:
Terry Proveaux
Director of Investor Relations
615-345-5577
www.renalcaregroup.com
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