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Nashville, Tennessee, (May 4, 2005) - Renal Care Group, Inc. (NYSE:RCI) today announced results for the first quarter ended March 31, 2005.
Gary A. Brukardt, Renal Care Group's president and chief executive officer, commented, "We are pleased to report solid results for the first quarter, which reflect the overall strength of our operations. Our 8,900 associates deserve credit for the Company's success due to their unyielding dedication in caring for our patients."
For the three months ended March 31, 2005, Renal Care Group's net revenues increased 34.3% to $373.5 million compared with net revenues of $278.0 million for the same period in 2004. Net income for the first quarter of 2005 rose 11.8% to $33.6 million compared with net income of $30.1 million in the first quarter of 2004. Diluted net income per share for the first quarter of 2005 increased 14.3% to $0.48 compared with diluted net income per share of $0.42 in the same quarter of 2004.
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 $0.04 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 $0.38 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 2005 before the impact of the resolution 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, May 4, 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 30,400 patients at more than 425 outpatient dialysis facilities in addition to providing acute dialysis services at more than 210 hospitals. Over 8,900 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 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. 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,
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2005 2004
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Net revenue $373,509 $278,028
Operating costs and expenses:
Patient care costs 246,579 179,372
General and administrative expenses 30,631 22,676
Provision for doubtful accounts 8,203 7,110
Depreciation and amortization 16,787 12,163
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Total operating costs and expenses 302,200 221,321
Income from operations 71,309 56,707
Interest expense, net 7,261 965
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Income before minority interest and income
taxes 64,048 55,742
Minority interest 9,362 7,214
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Income before income taxes 54,686 48,528
Provision for income taxes 21,054 18,441
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Net income $ 33,632 $ 30,087
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Diluted net income per share $ 0.48 $ 0.42
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Diluted weighted average shares outstanding 70,361 71,223
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RENAL CARE GROUP, INC.
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
March 31, Dec. 31,
2005 2004
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(unaudited)
ASSETS:
Current assets:
Cash and cash equivalents $ 12,900 $ 17,931
Accounts receivable, net 275,365 275,373
Other current assets 82,239 79,780
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Total current assets 370,504 373,084
Property, plant and equipment, net 332,361 316,532
Goodwill, intangible assets and other
assets, net 763,524 739,364
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TOTAL ASSETS $1,466,389 $1,428,980
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LIABILITIES AND STOCKHOLDERS' EQUITY:
Total current liabilities $ 254,214 $ 243,905
Long-term debt, net of current portion 474,909 479,645
Other long-term liabilities 109,583 113,309
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Total liabilities 838,706 836,859
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Stockholders' equity:
Common stock, $0.01 par value, 150,000
shares authorized, 82,770 and 82,317
shares issued, respectively 828 823
Treasury stock, 14,766 and 14,514 shares,
respectively (381,635) (372,249)
Additional paid-in capital 421,945 411,888
Retained earnings 585,495 551,863
Accumulated other comprehensive income
(loss), net of tax 1,050 (204)
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Total stockholders' equity 627,683 592,121
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,466,389 $1,428,980
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RENAL CARE GROUP, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Three Months Ended
March 31,
---------------------
2005 2004
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Operating Activities:
Net income $ 33,632 $ 30,087
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 16,787 12,163
Loss on sale of property and equipment 394 154
Distributions to minority shareholders (8,077) (3,561)
Income applicable to minority interest 9,362 7,214
Deferred income taxes (1,257) -
Changes in operating assets and
liabilities, net of effects from
acquisitions 14,289 (600)
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Net cash provided by operating
activities 65,130 45,457
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Investing Activities:
Purchases of property and equipment (22,161) (19,118)
Cash paid for acquisitions, net of cash
acquired (44,013) (55,768)
Change in other assets 1,388 (3,173)
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Net cash used in investing activities (64,786) (78,059)
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Financing Activities:
Net proceeds from issuance of long-term debt - 120,000
Payments on long-term debt (4,063) -
Net borrowings under line of credit and
capital leases 982 25,921
Net proceeds from issuance of common stock 7,092 9,628
Repurchase of treasury shares (9,386) (135,636)
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Net cash (used in) provided by financing
activities (5,375) 19,913
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Decrease in cash and cash equivalents (5,031) (12,689)
Cash and cash equivalents at beginning of
period 17,931 50,295
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Cash and cash equivalents at end of period $ 12,900 $ 37,606
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RENAL CARE GROUP, INC.
Supplemental GAAP to Non-GAAP Reconciliation
(unaudited, in thousands, except per share data)
Three Months Ended
March 31, 2004
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GAAP(1) Difference Non-GAAP(2)
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Net revenue $278,028 $ (4,700) $273,328
Operating costs and expenses:
Patient care costs 179,372 - 179,372
General and administrative
expenses 22,676 - 22,676
Provision for doubtful accounts 7,110 - 7,110
Depreciation and amortization 12,163 - 12,163
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Total operating costs and
expenses 221,321 - 221,321
Income from operations 56,707 (4,700) 52,007
Interest expense, net 965 - 965
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Income before minority interest
and income taxes 55,742 (4,700) 51,042
Minority interest 7,214 - 7,214
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Income before income taxes 48,528 (4,700) 43,828
Provision for income taxes 18,441 (1,786) 16,655
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Net income $ 30,087 $ (2,914) $ 27,173
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Diluted net income per share $ 0.42 $ (0.04) $ 0.38
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Diluted weighted average shares
outstanding 71,223 71,223 71,223
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(1) Reported operating results in accordance with accounting
principles generally accepted in the United States (GAAP).
(2) 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
March 31,
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2005 2004
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Operating Data:
Patients 30,426 22,619
Treatments 1,146,233 860,249
Same-market treatment growth 3.0% 3.5%
Same-market revenue growth 6.0% 8.3%
Patient revenue per treatment $ 324 $ 323
Reconciliation of Net Income to EBITDA(1):
Net income $33,632 $30,087
Depreciation and amortization 16,787 12,163
Interest expense, net 7,261 965
Minority interest 9,362 7,214
Provision for income taxes 21,054 18,441
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EBITDA(1) $88,096 $68,870
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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. 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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