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NASHVILLE, Tenn.--(BUSINESS WIRE)--Feb. 28, 2005--Renal Care Group, Inc. (NYSE:RCI) today announced results for the fourth quarter and year ended December 31, 2004.
For the three months ended December 31, 2004, Renal Care Group's net revenues increased 41.1% to $370.1 million compared with net revenues of $262.3 million for the same period in 2003. Net income for the fourth quarter of 2004 rose 14.8% to $32.1 million compared with net income of $27.9 million in the fourth quarter of 2003. Diluted net income per share for the fourth quarter of 2004 increased 21.1% to $0.46 compared with diluted net income per share of $0.38 in the same quarter of 2003.
Gary A. Brukardt, Renal Care Group's president and chief executive officer, commented, "Our financial results for the year reflect our success in integrating the NNA acquisition, which was the largest acquisition in our nine-year history. During the year we also invested in other high-quality dialysis programs and added a substantial number of patients to our total base. We will continue to pursue similar opportunities, affiliating with leading physicians who share our commitment to excellence in patient care to create value for our shareholders."
For the year ended December 31, 2004, Renal Care Group's net revenues increased 33.8% to $1,345.0 million compared with net revenues of $1,005.3 million for the same period in 2003. Net income for the year ended December 31, 2004, rose 19.4% to $121.8 million compared with net income of $102.1 million in the same period of 2003. Diluted net income per share for the year ended December 31, 2004, increased 27.0% to $1.74 compared with diluted net income per share of $1.37 for the same period in 2003.
GAAP results for the year ended December 31, 2004, give effect to resolutions of contractual issues with payors that were unusual in amount and timing, which favorably impacted diluted net income per share by $0.04. Excluding the effect of these resolutions, non-GAAP net income for the year ended December 31, 2004, was $118.9 million, or $1.70 per share. GAAP results for the year ended December 31, 2003, give effect to a non-recurring, after-tax charge 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 year ended December 31, 2003, was $105.4 million, or $1.41 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 for the year ended December 31, 2004, with its operational performance in the same period in 2003, before the impact of the one-time benefit related to resolutions of the payor contract issues and the one-time charge for the retirement package. A reconciliation between the non-GAAP results and the Company's GAAP results accompanies this press release.
David M. Dill, Renal Care Group's executive vice president and chief financial officer, commented, "The recently adopted Medicare Modernization Act regulations have provided the industry with greater clarity on reimbursement. Under the new regulations, which include the scheduled composite rate increase of 1.6% and changes in the way we are paid for drugs, we expect the impact of the Medicare Modernization Act to be neutral for us in 2005. As a result, we can confirm our previously announced 2005 corporate objectives, including revenues in the range of $1.5 to $1.6 billion and earnings per share in the range of $1.95 to $2.05."
Renal Care Group will hold a conference call to discuss this press release on Tuesday, March 1, 2005, 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 serves over 30,000 patients at more than 420 outpatient dialysis facilities in addition to providing acute dialysis services at more than 200 hospitals. Over 8,800 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 and Mr. Dill relating to our plans, objectives and expectations for 2005 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: payment reductions by private insurers, hospitals or managed care organizations; 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, 2003, as amended, its current report on Form 8-K as filed with the SEC on April 19, 2004; and its quarterly reports on Form 10-Q for the quarters ended March 31, 2004, June 30, 2004, and September 30, 2004. Copies of these filings are available from Renal Care Group upon request.
RENAL CARE GROUP, INC.
Condensed Consolidated Income Statements
(in thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
---------------------- ----------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
(unaudited)
Net revenue $ 370,054 $ 262,280 $1,345,047 $1,005,319
Operating costs and
expenses:
Patient care costs 244,857 170,870 893,478 653,307
General and
administrative
expenses 30,470 21,549 106,823 90,249
Provision for
doubtful accounts 8,927 6,764 32,550 26,200
Depreciation and
amortization 15,942 11,663 58,349 44,905
---------- ---------- ---------- ----------
Total operating
costs and
expenses 300,196 210,846 1,091,200 814,661
Income from operations 69,858 51,434 253,847 190,658
Interest expense, net 7,029 103 20,628 629
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Income before minority
interest and income
taxes 62,829 51,331 233,219 190,029
Minority interest 10,107 6,257 35,169 25,431
---------- ---------- ---------- ----------
Income before income
taxes 52,722 45,074 198,050 164,598
Provision for income
taxes 20,627 17,128 76,217 62,542
---------- ---------- ---------- ----------
Net income $ 32,095 $ 27,946 $ 121,833 $ 102,056
========== ========== ========== ==========
Diluted net income per
share $ 0.46 $ 0.38 $ 1.74 $ 1.37
========== ========== ========== ==========
Weighted average
shares outstanding 69,780 74,340 69,892 74,753
========== ========== ========== ==========
RENAL CARE GROUP, INC.
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
December 31,
------------------------
2004 2003
----------- -----------
ASSETS:
Current assets:
Cash and cash equivalents $ 17,931 $ 50,295
Accounts receivable, net 275,373 173,679
Other current assets 79,780 68,130
----------- -----------
Total current assets 373,084 292,104
Property, plant and equipment, net 316,532 224,397
Goodwill, intangible assets and other
assets, net 739,969 303,372
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TOTAL ASSETS $ 1,429,585 $ 819,873
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LIABILITIES AND STOCKHOLDERS' EQUITY:
Total current liabilities $ 246,119 $ 169,437
Long-term debt, net of current portion 479,645 2,652
Other long-term liabilities 111,700 76,939
----------- -----------
Total liabilities 837,464 249,028
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Stockholders' equity:
Common stock, $0.01 par value, 150,000 and
90,000 shares authorized, 82,317 and
80,465 shares issued, respectively 823 805
Treasury stock, 14,514 and 9,962 shares,
respectively (372,249) (234,404)
Additional paid-in capital 411,888 374,414
Retained earnings 551,863 430,030
Accumulated comprehensive loss, net of tax (204) -
----------- ------------
Total stockholders' equity 592,121 570,845
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 1,429,585 $ 819,873
=========== ===========
RENAL CARE GROUP, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
Year Ended
December 31,
--------------------
2004 2003
--------- ---------
Operating Activities:
Net income $ 121,833 $ 102,056
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 58,349 44,905
Loss on sale of property and equipment 1,123 886
Income applicable to minority interest 35,169 25,431
Distributions to minority shareholders (26,073) (24,634)
Deferred income taxes 15,923 19,517
Changes in operating assets and
liabilities, net of effects from
acquisitions (28,193) 18,388
--------- ---------
Net cash provided by operating
activities 178,131 186,549
--------- ---------
Investing Activities:
Proceeds from sale of property and equipment 4,569 2,270
Cash paid for acquisitions, net of cash
acquired (297,885) (14,154)
Purchases of property and equipment, net (103,363) (63,762)
Change in other assets (11,763) (2,858)
--------- ---------
Net cash used in investing
activities (408,442) (78,504)
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Financing Activities:
Net proceeds from issuance of long-term debt 325,000 -
Payments on long-term debt (12,188) (380)
Net payments under line of credit and capital
leases (1,831) (7,080)
Net proceeds from issuance of common stock 24,811 51,802
Repurchase of treasury shares (137,845) (140,451)
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Net cash provided by (used in)
financing activities 197,947 (96,109)
--------- ---------
(Decrease) increase in cash and cash equivalents (32,364) 11,936
Cash and cash equivalents, at beginning of
period 50,295 38,359
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Cash and cash equivalents, at end of period $ 17,931 $ 50,295
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RENAL CARE GROUP, INC.
Supplemental GAAP to Non-GAAP Reconciliation
(unaudited, in thousands, except per share data)
Year Ended December 31,
-----------------------------------
2004
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GAAP(1) Difference Non-GAAP(2)
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Net revenue $1,345,047 $ (4,700) $1,340,347
Operating costs and expenses:
Patient care costs 893,478 - 893,478
General and administrative
expenses 106,823 - 106,823
Provision for doubtful accounts 32,550 - 32,550
Depreciation and amortization 58,349 - 58,349
---------- ----------- ----------
Total operating costs and
expenses 1,091,200 - 1,091,200
Income from operations 253,847 (4,700) 249,147
Interest expense, net 20,628 - 20,628
---------- ----------- ----------
Income before minority interest
and income taxes 233,219 (4,700) 228,519
Minority interest 35,169 - 35,169
---------- ----------- ----------
Income before income taxes 198,050 (4,700) 193,350
Provision for income taxes 76,217 (1,786) 74,431
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Net income $ 121,833 $ (2,914) $ 118,919
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Diluted net income per share $ 1.74 $ (0.04) $ 1.70
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Weighted average shares
outstanding 69,892 69,892 69,892
========== ========== ==========
Year Ended December 31,
-----------------------------------
2003
-----------------------------------
GAAP(1) Difference Non-GAAP(3)
----------- ----------- -----------
Net revenue $1,005,319 $ - $1,005,319
Operating costs and expenses:
Patient care costs 653,307 - 653,307
General and administrative
expenses 90,249 (5,430) 84,819
Provision for doubtful accounts 26,200 - 26,200
Depreciation and amortization 44,905 - 44,905
---------- ----------- ----------
Total operating costs and
expenses 814,661 (5,430) 809,231
Income from operations 190,658 5,430 196,088
Interest expense, net 629 - 629
---------- ----------- ----------
Income before minority interest
and income taxes 190,029 5,430 195,459
Minority interest 25,431 - 25,431
---------- ----------- ----------
Income before income taxes 164,598 5,430 170,028
Provision for income taxes 62,542 2,063 64,605
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Net income $ 102,056 $ 3,367 $ 105,423
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Diluted net income per share $ 1.37 $ 0.05 $ 1.41
========== ========== ==========
Weighted average shares
outstanding 74,753 74,753 74,753
========== ========== ==========
(1) Reported operating results in accordance with accounting
principles generally accepted in the United States (GAAP).
(2) Non-GAAP amounts in 2004 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.
(3) Non-GAAP amounts in 2003 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 operating data)
Three Months Ended Year Ended
December 31, December 31,
---------------------- ----------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Operating Data:
Patients 29,795 21,472 29,795 21,472
Treatments 1,159,920 838,642 4,240,440 3,254,447
Same-market treatment
growth 3.0% 3.4% 3.3% 4.7%
Same-market revenue
growth 7.2% 5.2% 7.4% 7.5%
Patient revenue per
treatment $ 318 $ 310 $ 316 $ 308
Reconciliation of Net
Income to EBITDA(1):
Net income $ 32,095 $ 27,946 $ 121,833 $ 102,056
Non-recurring
retirement charge - - - 5,430
Depreciation and
amortization 15,942 11,663 58,349 44,905
Interest expense, net 7,029 103 20,628 629
Minority interest 10,107 6,257 35,169 25,431
Provision for income
taxes 20,627 17,128 76,217 62,542
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EBITDA(1) $ 85,800 $ 63,097 $ 312,196 $ 240,993
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(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.
Terry Proveaux, 615-345-5577
www.renalcaregroup.com
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