|
NASHVILLE, Tenn.--(BUSINESS WIRE)--Nov. 1, 2005--Renal Care Group, Inc. (NYSE: RCI) today announced results for the quarter and nine months ended September 30, 2005. The Company's GAAP diluted net income per share for the quarter was $0.50 and its non-GAAP diluted net income per share was $0.54. The non-GAAP results exclude the effect of costs incurred in the third quarter in connection with Fresenius Medical Care AG's pending acquisition of the Company.
Gary A. Brukardt, Renal Care Group's president and chief executive officer, commented, "We are pleased with this quarter's results, and I thank our associates for remaining focused on our business while the transaction with Fresenius Medical Care is pending. The transition and integration plans are going well. Our teams have been working diligently over the past few months to create a structure that will capture the strengths of both organizations. We have the unique opportunity to combine best demonstrated practices, operational leadership and compatible cultures to solidify the combined company's position as the premier renal therapy provider."
For the three months ended September 30, 2005, Renal Care Group's net revenue increased 13.0% to $402.2 million compared with net revenue of $356.1 million for the same period in 2004. GAAP net income for the third quarter of 2005 increased $4.8 million, or 15.6%, to $35.2 million compared with net income of $30.5 million in the third quarter of 2004. GAAP diluted net income per share for the third quarter of 2005 increased 13.6% to $0.50 compared with diluted net income per share of $0.44 in the same quarter of 2004. The Company recorded an after-tax charge of $2.9 million, or $0.04 per diluted share, representing transaction costs incurred by the Company in the third quarter in connection with Fresenius Medical Care AG's agreement to acquire the Company. Excluding the effect of the transaction-related costs, non-GAAP net income for the third quarter was $38.1 million, an increase of $7.7 million, or 25.1%.
For the nine months ended September 30, 2005, Renal Care Group's net revenue increased 19.0% to $1.2 billion compared with net revenue of $975.0 million for the same period in 2004. GAAP net income for the nine months ended September 30, 2005, rose 8.2% to $97.1 million compared with net income of $89.7 million in the same period of 2004. GAAP diluted net income per share for the nine months ended September 30, 2005, increased 7.0% to $1.37 compared with diluted net income per share of $1.28 in the same period of 2004.
GAAP results for the nine months ended September 30, 2005, give effect to an after-tax charge of $0.13 per diluted share related to transaction costs associated with Fresenius Medical Care AG's agreement to acquire the Company. Excluding the effect of these costs, non-GAAP net income for the nine months ended September 30, 2005, was $106.3 million, or $1.50 per diluted share. GAAP results for the nine months ended September 30, 2004, give effect to resolutions of contractual issues with payors that were unusual in amount and timing; these payor resolutions favorably impacted earnings per share by $0.04 per diluted share. Excluding the effect of these resolutions, non-GAAP net income for the nine months ended September 30, 2004, was $86.8 million, or $1.24 per diluted share.
David Dill, executive vice president and chief financial officer, commented, "Renal Care Group's shareholders voted overwhelmingly in favor of the merger agreement proposal at the Special Meeting in August. We are still working toward closing the transaction by the end of 2005. However, our ability to complete the deal is dependent upon the FTC's review process, and it is possible that the closing date could move into early 2006."
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 in the first nine months 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, November 2, 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 32,000 patients at more than 450 outpatient dialysis facilities in addition to providing acute dialysis services at more than 200 hospitals. Over 9,400 associates provide services across the Company's 34-state network. More information about Renal Care Group, Inc. can 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, work, 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; and compliance with health care and other applicable laws. 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 Nine Months Ended
September 30, September 30,
------------------ --------------------
2005 2004 2005 2004
-------- -------- ---------- --------
Net revenue $402,230 $356,111 $1,160,068 $974,993
Operating costs and
expenses:
Patient care costs 267,889 239,400 769,322 648,621
General and administrative
expenses 34,275 26,336 100,967 76,353
Provision for doubtful
accounts 5,396 8,464 22,546 23,623
Depreciation and
amortization 18,173 15,344 52,735 42,407
-------- -------- ---------- --------
Total operating costs
and expenses 325,733 289,544 945,570 791,004
Income from operations 76,497 66,567 214,498 183,989
Interest expense, net 8,715 6,869 23,957 13,599
-------- -------- ---------- --------
Income before minority
interest and income taxes 67,782 59,698 190,541 170,390
Minority interest 9,915 10,158 28,409 25,062
-------- -------- ---------- --------
Income before income taxes 57,867 49,540 162,132 145,328
Provision for income taxes 22,636 19,072 65,052 55,590
-------- -------- ---------- --------
Net income $ 35,231 $ 30,468 $ 97,080 $ 89,738
======== ======== ========== ========
Diluted net income per share $ 0.50 $ 0.44 $ 1.37 $ 1.28
======== ======== ========== ========
Diluted weighted average
shares outstanding 71,023 69,339 70,721 69,930
======== ======== ========== ========
RENAL CARE GROUP, INC.
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
September 30, December 31,
2005 2004
------------ -----------
(unaudited)
ASSETS:
Current assets:
Cash and cash equivalents $ 25,490 $ 17,931
Accounts receivable, net 286,773 275,373
Other current assets 104,360 79,780
------------ -----------
Total current assets 416,623 373,084
Property, plant and equipment, net 354,910 316,532
Goodwill, intangible assets and other
assets, net 870,295 739,364
------------ -----------
TOTAL ASSETS $ 1,641,828 $ 1,428,980
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Total current liabilities $ 250,500 $ 243,905
Long-term debt, net of current portion 566,696 479,645
Other long-term liabilities 123,947 113,309
------------ -----------
Total liabilities 941,143 836,859
------------ -----------
Stockholders' equity:
Common stock, $0.01 par value, 150,000
shares authorized, 83,100 and 82,317
shares issued, respectively 831 823
Treasury stock, 14,766 and 14,514 shares,
respectively (381,635) (372,249)
Additional paid-in capital 431,278 411,888
Retained earnings 648,943 551,863
Accumulated other comprehensive income
(loss), net of tax 1,268 (204)
------------ -----------
Total stockholders' equity 700,685 592,121
------------ -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 1,641,828 $ 1,428,980
============ ===========
RENAL CARE GROUP, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Nine Months Ended
September 30,
--------------------
2005 2004
--------- ---------
Operating Activities:
Net income $ 97,080 $ 89,738
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 52,735 42,407
Loss on sale of property and equipment 661 624
Distributions to minority shareholders (15,807) (11,409)
Income applicable to minority interest 28,409 25,062
Deferred income taxes 2,207 10,734
Changes in operating assets and
liabilities, net of effects from
acquisitions (28,506) (21,062)
--------- ---------
Net cash provided by operating
activities 136,779 136,094
--------- ---------
Investing Activities:
Purchases of property and equipment (67,507) (66,463)
Cash paid for acquisitions, net of cash
acquired (167,766) (274,644)
Change in other assets 3,062 (7,185)
--------- ---------
Net cash used in investing
activities (232,211) (348,292)
--------- ---------
Financing Activities:
Net proceeds from issuance of long-term debt 100,000 325,000
Payments on long-term debt (16,251) (8,125)
Net borrowings under line of credit and
capital leases 15,930 7,027
Net proceeds from issuance of common stock 12,698 17,799
Repurchase of treasury shares (9,386) (137,845)
--------- ---------
Net cash provided by financing
activities 102,991 203,856
--------- ---------
Increase (decrease) in cash and cash equivalents 7,559 (8,342)
Cash and cash equivalents at beginning of period 17,931 50,295
--------- ---------
Cash and cash equivalents at end of period $ 25,490 $ 41,953
========= =========
RENAL CARE GROUP, INC.
Supplemental GAAP to Non-GAAP Reconciliation
(unaudited, in thousands, except per share data)
Three Months Ended
September 30, 2005
-----------------------------
Non-
GAAP(1) Difference GAAP(2)
--------- ---------- --------
Net revenue $402,230 $ - $402,230
Operating costs and expenses:
Patient care costs 267,889 - 267,889
General and administrative expenses 34,275 (3,650) 30,625
Provision for doubtful accounts 5,396 - 5,396
Depreciation and amortization 18,173 - 18,173
-------- ---------- --------
Total operating costs and
expenses 325,733 (3,650) 322,083
Income from operations 76,497 3,650 80,147
Interest expense, net 8,715 - 8,715
-------- ---------- --------
Income before minority interest and
income taxes 67,782 3,650 71,432
Minority interest 9,915 - 9,915
-------- ---------- --------
Income before income taxes 57,867 3,650 61,517
Provision for income taxes 22,636 755 23,391
-------- --------- --------
Net income $ 35,231 $ 2,895 $ 38,126
======== ========= ========
Diluted net income per share $ 0.50 $ 0.04 $ 0.54
======== ========= ========
Weighted average shares outstanding 71,023 71,023 71,023
======== ========= ========
(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 three
months ended September 30, 2005 and the related tax effect.
RENAL CARE GROUP, INC.
Supplemental GAAP to Non-GAAP Reconciliation
(unaudited, in thousands, except per share data)
Nine Months Ended September 30,
----------------------------------
2005
----------------------------------
Non-
GAAP(1) Difference GAAP(2)
----------- ---------- -----------
Net revenue $1,160,068 $ - $1,160,068
Operating costs and expenses:
Patient care costs 769,322 - 769,322
General and administrative
expenses 100,967 (10,350) 90,617
Provision for doubtful accounts 22,546 - 22,546
Depreciation and amortization 52,735 - 52,735
---------- ---------- ----------
Total operating costs and
expenses 945,570 (10,350) 935,220
Income from operations 214,498 10,350 224,848
Interest expense, net 23,957 - 23,957
---------- ---------- ----------
Income before minority interest
and income taxes 190,541 10,350 200,891
Minority interest 28,409 - 28,409
---------- ---------- ----------
Income before income taxes 162,132 10,350 172,482
Provision for income taxes 65,052 1,094 66,146
---------- --------- ----------
Net income $ 97,080 $ 9,256 $ 106,336
========== ========= ==========
Diluted net income per share $ 1.37 $ 0.13 $ 1.50
========== ========= ==========
Weighted average shares outstanding 70,721 70,721 70,721
========== ========= ==========
Nine Months Ended September 30,
-------------------------------
2004
-------------------------------
Non-
GAAP(1) Difference GAAP(3)
--------- ---------- ---------
Net revenue $974,993 $ (4,700) $970,293
Operating costs and expenses:
Patient care costs 648,621 - 648,621
General and administrative expenses 76,353 - 76,353
Provision for doubtful accounts 23,623 - 23,623
Depreciation and amortization 42,407 - 42,407
-------- ---------- --------
Total operating costs and expenses 791,004 - 791,004
Income from operations 183,989 (4,700) 179,289
Interest expense, net 13,599 - 13,599
-------- ---------- --------
Income before minority interest
and income taxes 170,390 (4,700) 165,690
Minority interest 25,062 - 25,062
-------- ---------- --------
Income before income taxes 145,328 (4,700) 140,628
Provision for income taxes 55,590 (1,786) 53,804
-------- --------- --------
Net income 89,738 $ (2,914) $ 86,824
======== ========= ========
Diluted net income per share $ 1.28 $ (0.04) $ 1.24
======== ========= ========
Weighted average shares outstanding 69,930 69,930 69,930
======== ========= ========
(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 nine
months ended September 30, 2005, and the related tax effect.
(3) 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 Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
Operating Data:
Patients 32,013 29,332 32,013 29,332
Treatments 1,243,131 1,125,021 3,587,959 3,080,520
Same-market treatment
growth 3.3% 3.2% 2.9% 3.6%
Same-market revenue
growth 5.6% 7.2% 5.7% 7.5%
Patient revenue per
treatment $ 322 $ 314 $ 322 $ 315
Reconciliation of Net
Income to EBITDA(1):
Net income $ 35,231 $ 30,468 $ 97,080 $ 89,738
Depreciation and
amortization 18,173 15,344 52,735 42,407
Interest expense, net 8,715 6,869 23,957 13,599
Minority interest 9,915 10,158 28,409 25,062
Provision for income
taxes 22,636 19,072 65,052 55,590
---------- ---------- ---------- ----------
EBITDA(1) $ 94,670 $ 81,911 $ 267,233 $ 226,396
========== ========== ========== ==========
(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. 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 |
Press Releases