LOUISVILLE, Ky.--(BUSINESS WIRE)--Kindred Healthcare, Inc. (“Kindred” or the “Company”) (NYSE:KND) today announced its operating results for the third quarter ended September 30, 2015.
Benjamin A. Breier, President and Chief Executive Officer of the Company, commented, “During the third quarter our team continued to make great progress on our strategic plan despite industry-wide headwinds for healthcare services companies that created a challenging quarter for our Hospital Division (“HD”). Our Kindred at Home Division (“KAH”) was the highlight of the quarter as it continues to advance its integration efforts and benefit from the accelerating momentum of patient flow into the home care, hospice, and community care settings. Our freestanding inpatient rehabilitation facility (“IRF”) business also continues to grow and, with our new IRFs in Arlington, Texas and Madison, Wisconsin that opened during the third quarter, we now operate 18 freestanding IRFs, most of which are joint-ventures with prominent not-for-profit health systems. In addition, we continue to successfully build broad based hospital, payor and physician relationships across the country as we bring our unique integrated care model to more partners and patients.”
Mr. Breier added, “We are very pleased to report consolidated revenue growth of 43.6%, and consolidated core EBITDAR(1) growth of 50.4% compared to the same period last year. Our recent acquisitions and organic growth efforts have transformed Kindred’s business mix and free cash flow profile, and we continue to execute on our transition into higher growth, lower capital intensity and higher return businesses. We remain confident that Kindred is the best positioned company in the post-acute sector to meet the needs of the changing beneficiary landscape and emerge successfully in the movement to pay for value. As always, I thank the many stakeholders in Kindred, and in particular our 102,000 teammates, for the excellent care they deliver every day to patients in need.”
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(1) | See reconciliation of core results to generally accepted accounting principles (“GAAP”) results beginning on page 12. |
All financial and statistical information included in this press release reflects the continuing operations of the Company’s businesses for all periods presented unless otherwise indicated. The acquisitions of Gentiva Health Services, Inc. (“Gentiva”) and Centerre Healthcare Corporation (“Centerre”) have been included in the operating results presented since the date of acquisition.
Third Quarter Consolidated Highlights(1):
- Consolidated revenues increased 43.6% to $1.76 billion and earnings before interest, income taxes, depreciation, amortization, rent and certain charges (“core EBITDAR”) increased 50.4% to $236 million, each as compared to the same period last year
- Core diluted earnings per share (“EPS”) from continuing operations was $0.23 and adjusted core diluted EPS from continuing operations was $0.33 based upon 86.9 million weighted average diluted shares, an improvement as compared to core diluted EPS of $0.13 and adjusted core diluted EPS of $0.20 for the same period a year ago based upon 62.9 million weighted average diluted shares
- The Company generated significant core operating cash flows of $128 million compared to $88 million for the same period a year ago, and core free cash flows were $93 million compared to $66 million in the same period of 2014. Year to date core operating cash flows were $264 million compared to $102 million for the same period a year ago, and year to date core free cash flows were $183 million compared to $35 million in the same period of 2014
- The Kindred Board of Directors declared a cash dividend of $0.12 per share on the Company’s common stock payable on December 11, 2015 to shareholders of record as of the close of business on November 18, 2015
Third Quarter Segment Highlights(1)(2):
Kindred’s Hospital Division third quarter same-hospital revenues declined 1.4% over the prior year period to $577 million, with a decline in same-hospital admissions of 3.8% compared to the same period last year. HD third quarter same-hospital patient days increased 0.3% and same-hospital revenues per patient day declined 1.7% compared to the same period last year as a result of shifts in payor mix and an increase in same-hospital average lengths of stay of 3.9%. HD’s core EBITDAR declined to $97 million from $117 million a year ago primarily as a result of these factors and certain increases in labor expense, bad debt and costs associated with longer average lengths of stay.
Kindred at Home Division revenues and core EBITDAR increased to $605 million and $102 million, respectively, for the quarter. The home health segment achieved solid growth during the third quarter of 2015, with episodic admissions increasing 2.6% and revenues increasing 7.3% to $357 million, both over the prior year period on a combined basis. The hospice segment generated $181 million of revenues, a 1% sequential growth in average daily census and an improved sequential operating margin from 15.7% to 18.8%.
Kindred Rehabilitation Services Division revenues increased 8.6% to $369 million and core EBITDAR contribution increased 35.1% to $57 million for the quarter. The Kindred Hospital Rehabilitation Services segment, which includes Kindred’s IRF business, experienced strong revenue growth of $56 million or 60.4% over the prior year period, due to the successful Centerre acquisition, and achieved core EBITDAR margin improvement from 26.7% to 28.2%. The RehabCare segment (“RHB”) experienced an 11.0% revenue reduction from the prior year period primarily due to contract losses. These contract losses occurred primarily in the first quarter of 2015 and began to moderate in the second quarter of 2015. In fact, RHB added 32 net new sites of service during the third quarter of 2015, its first positive net sites of service growth quarter in 2015.
Kindred’s Nursing Center Division (“NCD”) revenues grew 2.5% to $271 million due to an improvement of 4.3% in revenue per patient day. NCD core EBITDAR margins declined 2.2% due to a 1.9% decline in admissions. NCD continues to deliver stable performance despite continuing pressure on length of stay.
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(1) | See reconciliation of core results to GAAP results beginning on page 12. |
(2) | See same-hospital and full segment data on page 9. |
Significantly Improved Cash Flow Profile(1)
Stephen D. Farber, Executive Vice President and Chief Financial Officer of Kindred, noted “Our acquisition of Gentiva early in 2015 and the recent disposition of more than 150 nursing centers and long-term acute care (“LTAC”) hospitals have dramatically changed our cash flow profile, as evidenced by our strong cash flow performance through the first nine months of the year. While we do not typically provide annual cash flow guidance, looking beyond 2015, Kindred is now positioned going forward to generate roughly $300 million per year in core operating cash flow when adjusted to reflect the current composition of our businesses and before net changes in working capital, with roughly half that amount in core free cash flow after funding routine capital expenditures and growth-related investment in working capital. In addition, the Company has significant tax loss carryforwards and carrybacks, which have resulted in net cash inflows from federal income taxes in 2015, and which we expect will offset more than half of Kindred’s expected book tax liability in 2016.”
Revised 2015 Outlook
Due to the third quarter challenges in its Hospital Division, and based on updated expectations for LTAC operations in the fourth quarter, Kindred is revising its previously provided financial estimates for 2015(2) as follows:
- 2015 annual revenues of approximately $7.1 billion (previously $7.2 billion)
- Core EBITDAR of approximately $970 million to $990 million(3) (previously $1.0 billion to $1.05 billion)
- Core earnings of $1.15 to $1.30 per diluted share(4) (previously $1.25 to $1.45)
- Adjusted core earnings of $1.55 to $1.70 per diluted share(4)(5) (previously $1.70 to $1.90)
Mr. Breier concluded, “As we methodically work our way through the macro and industry headwinds confronting our Hospital Division, including its forthcoming transition through LTAC criteria starting later next year, we expect some choppiness in that division’s performance and our consolidated results. We remain confident in the steps we are taking to address these challenges and in the strength of our cash flows, which enable us to continue to invest aggressively to evolve our platform to drive continued growth. The strength of our diversified service offerings, particularly the strong performance we are achieving at KAH, continues to produce growth and advances our strategy of delivering a coordinated continuum of care.”
This revised outlook excludes transaction costs, pre-closing financing costs and post-closing integration costs associated with the acquisitions of Gentiva and Centerre, the effect of reimbursement changes, debt refinancing costs, severance, retirement, retention and restructuring costs, litigation and related contingency expense (including the $125 million loss contingency reserve accrued during the nine months ended September 30, 2015 related to the previously disclosed investigation into a therapy services company acquired by Kindred in 2011), other transaction costs, any further acquisitions or divestitures, any impairment charges, any further issuances of common stock or any repurchases of common stock.
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(1) | See reconciliation of core results to GAAP results beginning on page 12. |
(2) | Guidance includes Gentiva for eleven months and Centerre for the full year. |
(3) | Includes $45 million from Gentiva synergies expected to be realized in 2015. |
(4) | The earnings per share estimate is based upon an estimated weighted average annual diluted share count for 2015 of 86 million shares. The estimated annual diluted share count for 2015 includes approximately 3.7 million shares of common stock issued in February, May and July to holders of 85,121 tangible equity units that elected early conversion settlements. |
(5) | Adjusted core earnings per diluted share is calculated by excluding non-cash expenses, net of the income tax benefit, related to amortization of intangible assets, stock-based compensation and deferred financing costs, from core income from continuing operations. The estimated non-cash expenses for 2015 total approximately $58 million ($35 million net of income taxes) or approximately $0.40 per diluted share. |
RehabCare Loss Contingency Reserve Adjustment
The Company is engaged in active discussions with the United States Department of Justice in an effort to find a mutually acceptable resolution to the investigation of RehabCare Group, Inc., a therapy services company acquired by the Company on June 1, 2011. Based on the progress of continuing settlement discussions through October 2015, the Company, in accordance with GAAP, recorded an additional $30 million loss provision in the third quarter of 2015 (for a total loss reserve of $125 million) related to this matter. The Company recorded a $95 million loss reserve for this matter in the first quarter of 2015 and disclosed an estimated settlement range of $95 million to $125 million. The Company accrued the estimated loss contingency in the first quarter of 2015 at the minimum of the estimated range in accordance with GAAP as no amount within that range was a better estimate than any other amount. These continuing settlement discussions also indicate that a corporate integrity agreement will likely be required as part of any final settlement related to this matter. The discussions are ongoing, and until they are concluded, there can be no certainty about the timing or likelihood of a definitive resolution, the scope of any potential restrictions that may be agreed upon in connection with a settlement or the cost of a final settlement.
Cash Dividend
The Company announced that its Board of Directors has approved the payment of a cash dividend of $0.12 per share of common stock to be paid on December 11, 2015 to shareholders of record as of the close of business on November 18, 2015.
Conference Call
As previously announced, investors and the general public may access a live webcast of the third quarter 2015 conference call through a link on the Company’s website at http://investors.kindredhealthcare.com. The conference call will be held on November 5 at 10:00 a.m. (Eastern Time).
A telephone replay of the conference call will become available at approximately 1:00 p.m. on November 5 by dialing (719) 457-0820, access code: 8169570. The replay will be available through November 15.
Forward-Looking Statements and Non-GAAP Reconciliations
See page 11 for important disclosures regarding our forward-looking statements and the non-GAAP financial reconciliations that follow.
About Kindred Healthcare
Kindred Healthcare, Inc., a top-95 private employer in the United States, is a FORTUNE 500 healthcare services company based in Louisville, Kentucky with annual revenues of approximately $7.2 billion(1). At September 30, 2015, Kindred through its subsidiaries had approximately 102,200 employees providing healthcare services in 2,723 locations in 47 states, including 95 transitional care hospitals, 18 inpatient rehabilitation hospitals, 90 nursing centers, 20 sub-acute units, 626 Kindred at Home home health, hospice and non-medical home care sites of service, 101 inpatient rehabilitation units (hospital-based) and a contract rehabilitation services business, RehabCare, which served 1,773 non-affiliated sites of service. Ranked as one of Fortune magazine’s Most Admired Healthcare Companies for six years, Kindred’s mission is to promote healing, provide hope, preserve dignity and produce value for each patient, resident, family member, customer, employee and shareholder we serve. For more information, go to www.kindredhealthcare.com. You can also follow us on Twitter and Facebook.
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(1) | Revenues were computed by combining the twelve months ended December 31, 2014 data for Kindred, Gentiva and Centerre. |
KINDRED HEALTHCARE, INC. | |||||||||||||||||||||||||
Condensed Consolidated Statement of Operations | |||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||||
Revenues | $ | 1,764,516 | $ | 1,228,918 | $ | 5,273,958 | $ | 3,762,925 | |||||||||||||||||
Salaries, wages and benefits | 922,140 | 601,813 | 2,704,920 | 1,826,602 | |||||||||||||||||||||
Supplies | 96,551 | 70,719 | 288,059 | 215,269 | |||||||||||||||||||||
Rent | 96,244 | 77,643 | 284,786 | 233,872 | |||||||||||||||||||||
Other operating expenses | 207,837 | 169,582 | 617,681 | 511,786 | |||||||||||||||||||||
General and administrative expenses | 310,041 | 237,503 | 1,050,948 | 713,521 | |||||||||||||||||||||
Other income | (650 | ) | (260 | ) | (1,699 | ) | (594 | ) | |||||||||||||||||
Litigation contingency expense | 31,462 | - | 130,387 | 4,600 | |||||||||||||||||||||
Impairment charges | - | - | 6,726 | - | |||||||||||||||||||||
Depreciation and amortization | 39,329 | 38,748 | 116,889 | 117,012 | |||||||||||||||||||||
Interest expense | 56,440 | 22,515 | 176,128 | 128,844 | |||||||||||||||||||||
Investment income | (432 | ) | (344 | ) | (2,203 | ) | (2,975 | ) | |||||||||||||||||
1,758,962 | 1,217,919 | 5,372,622 | 3,747,937 | ||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | 5,554 | 10,999 | (98,664 | ) | 14,988 | ||||||||||||||||||||
Provision for income taxes | 12,523 | 3,777 | 9,183 | 5,289 | |||||||||||||||||||||
Income (loss) from continuing operations | (6,969 | ) | 7,222 | (107,847 | ) | 9,699 | |||||||||||||||||||
Discontinued operations, net of income taxes: | |||||||||||||||||||||||||
Income (loss) from operations | 2,269 | (8,677 | ) | (1,744 | ) | (24,887 | ) | ||||||||||||||||||
Gain (loss) on divestiture of operations | - | 1,387 | 983 | (3,637 | ) | ||||||||||||||||||||
Income (loss) from discontinued operations | 2,269 | (7,290 | ) | (761 | ) | (28,524 | ) | ||||||||||||||||||
Net loss | (4,700 | ) | (68 | ) | (108,608 | ) | (18,825 | ) | |||||||||||||||||
(Earnings) loss attributable to noncontrolling interests: | |||||||||||||||||||||||||
Continuing operations | (9,900 | ) | (4,372 | ) | (30,482 | ) | (13,729 | ) | |||||||||||||||||
Discontinued operations | 1 | 78 | 32 | 401 | |||||||||||||||||||||
(9,899 | ) | (4,294 | ) | (30,450 | ) | (13,328 | ) | ||||||||||||||||||
Loss attributable to Kindred | $ | (14,599 | ) | $ | (4,362 | ) | $ | (139,058 | ) | $ | (32,153 | ) | |||||||||||||
Amounts attributable to Kindred stockholders: | |||||||||||||||||||||||||
Income (loss) from continuing operations | $ | (16,869 | ) | $ | 2,850 | $ | (138,329 | ) | $ | (4,030 | ) | ||||||||||||||
Income (loss) from discontinued operations | 2,270 | (7,212 | ) | (729 | ) | (28,123 | ) | ||||||||||||||||||
Net loss | $ | (14,599 | ) | $ | (4,362 | ) | $ | (139,058 | ) | $ | (32,153 | ) | |||||||||||||
Earnings (loss) per common share: | |||||||||||||||||||||||||
Basic: | |||||||||||||||||||||||||
Income (loss) from continuing operations | $ | (0.20 | ) | $ | 0.04 | $ | (1.65 | ) | $ | (0.07 | ) | ||||||||||||||
Discontinued operations: | |||||||||||||||||||||||||
Income (loss) from operations | 0.03 | (0.13 | ) | (0.02 | ) | (0.44 | ) | ||||||||||||||||||
Gain (loss) on divestiture of operations | - | 0.02 | 0.01 | (0.06 | ) | ||||||||||||||||||||
Income (loss) from discontinued operations | 0.03 | (0.11 | ) | (0.01 | ) | (0.50 | ) | ||||||||||||||||||
Net loss | $ | (0.17 | ) | $ | (0.07 | ) | $ | (1.66 | ) | $ | (0.57 | ) | |||||||||||||
Diluted: | |||||||||||||||||||||||||
Income (loss) from continuing operations | $ | (0.20 | ) | $ | 0.04 | $ | (1.65 | ) | $ | (0.07 | ) | ||||||||||||||
Discontinued operations: | |||||||||||||||||||||||||
Income (loss) from operations | 0.03 | (0.13 | ) | (0.02 | ) | (0.44 | ) | ||||||||||||||||||
Gain (loss) on divestiture of operations | - | 0.02 | 0.01 | (0.06 | ) | ||||||||||||||||||||
Income (loss) from discontinued operations | 0.03 | (0.11 | ) | (0.01 | ) | (0.50 | ) | ||||||||||||||||||
Net loss | $ | (0.17 | ) | $ | (0.07 | ) | $ | (1.66 | ) | $ | (0.57 | ) | |||||||||||||
Shares used in computing earnings (loss) per common share: | |||||||||||||||||||||||||
Basic | 86,184 | 62,863 | 83,960 | 56,443 | |||||||||||||||||||||
Diluted | 86,184 | 62,902 | 83,960 | 56,443 | |||||||||||||||||||||
Cash dividends declared and paid per common share | $ | 0.12 | $ | 0.12 | $ | 0.36 | $ | 0.36 | |||||||||||||||||
KINDRED HEALTHCARE, INC. | ||||||||||||||
Condensed Consolidated Balance Sheet | ||||||||||||||
(Unaudited) | ||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||
September 30, | December 31, | |||||||||||||
2015 | 2014 | |||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 120,891 | $ | 164,188 | ||||||||||
Insurance subsidiary investments | 103,856 | 99,951 | ||||||||||||
Accounts receivable less allowance for loss | 1,216,214 | 944,219 | ||||||||||||
Inventories | 27,252 | 25,702 | ||||||||||||
Deferred tax assets | 74,221 | 82,391 | ||||||||||||
Income taxes | 10,571 | 8,575 | ||||||||||||
Interest deposit on senior unsecured notes held in escrow | - | 23,438 | ||||||||||||
Other | 66,891 | 41,598 | ||||||||||||
1,619,896 | 1,390,062 | |||||||||||||
Property and equipment | 2,120,809 | 1,978,153 | ||||||||||||
Accumulated depreciation | (1,164,969 | ) | (1,076,049 | ) | ||||||||||
955,840 | 902,104 | |||||||||||||
Goodwill | 2,646,766 | 997,597 | ||||||||||||
Intangible assets less accumulated amortization | 783,774 | 400,700 | ||||||||||||
Assets held for sale | 1,526 | 3,475 | ||||||||||||
Insurance subsidiary investments | 201,026 | 166,045 | ||||||||||||
Deferred tax assets | - | 11,174 | ||||||||||||
Proceeds from senior unsecured notes held in escrow | - | 1,350,000 | ||||||||||||
Acquisition deposit | - | 195,000 | ||||||||||||
Other | 295,168 | 236,807 | ||||||||||||
Total assets | $ | 6,503,996 | $ | 5,652,964 | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | 182,154 | $ | 175,725 | ||||||||||
Salaries, wages and other compensation | 442,730 | 358,857 | ||||||||||||
Due to third party payors | 59,498 | 43,957 | ||||||||||||
Professional liability risks | 62,020 | 64,137 | ||||||||||||
Other accrued liabilities | 346,309 | 189,980 | ||||||||||||
Long-term debt due within one year | 32,527 | 24,607 | ||||||||||||
1,125,238 | 857,263 | |||||||||||||
Long-term debt | 3,126,359 | 2,852,531 | ||||||||||||
Professional liability risks | 273,874 | 243,614 | ||||||||||||
Deferred tax liabilities | 20,850 | - | ||||||||||||
Deferred credits and other liabilities | 307,164 | 213,584 | ||||||||||||
Equity: | ||||||||||||||
Stockholders' equity: | ||||||||||||||
Common stock, $0.25 par value; authorized 175,000 shares; issued 83,759 shares - September 30, 2015 and 69,977 shares - December 31, 2014 |
20,940 | 17,494 | ||||||||||||
Capital in excess of par value | 1,741,736 | 1,586,692 | ||||||||||||
Accumulated other comprehensive loss | (4,328 | ) | (2,551 | ) | ||||||||||
Accumulated deficit | (301,878 | ) | (159,768 | ) | ||||||||||
1,456,470 | 1,441,867 | |||||||||||||
Noncontrolling interests | 194,041 | 44,105 | ||||||||||||
Total equity | 1,650,511 | 1,485,972 | ||||||||||||
Total liabilities and equity | $ | 6,503,996 | $ | 5,652,964 | ||||||||||
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||
Condensed Consolidated Statement of Cash Flows | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net loss | $ | (4,700 | ) | $ | (68 | ) | $ | (108,608 | ) | $ | (18,825 | ) | ||||||||||||
Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||||||||||||||||||
Depreciation and amortization | 39,595 | 39,579 | 117,521 | 121,805 | ||||||||||||||||||||
Amortization of stock-based compensation costs | 3,194 | 694 | 15,764 | 9,657 | ||||||||||||||||||||
Amortization of deferred financing costs | 3,554 | 1,982 | 10,155 | 21,211 | ||||||||||||||||||||
Payment of capitalized lender fees related to debt issuance | - | - | (28,012 | ) | (19,125 | ) | ||||||||||||||||||
Provision for doubtful accounts | 11,014 | 14,695 | 29,817 | 35,588 | ||||||||||||||||||||
Deferred income taxes | 3,556 | (32,777 | ) | (894 | ) | (11,274 | ) | |||||||||||||||||
Impairment charges | - | 9 | 6,726 | 673 | ||||||||||||||||||||
(Gain) loss on divestiture of discontinued operations | - | (1,387 | ) | (983 | ) | 3,637 | ||||||||||||||||||
Other | 3,485 | 175 | 10,457 | 2,289 | ||||||||||||||||||||
Change in operating assets and liabilities: | ||||||||||||||||||||||||
Accounts receivable | 25,990 | 10,392 | (13,399 | ) | (102,503 | ) | ||||||||||||||||||
Inventories and other assets | 8,767 | (2,899 | ) | 44,181 | (12,886 | ) | ||||||||||||||||||
Accounts payable | (353 | ) | (3,592 | ) | (12,788 | ) | (22,469 | ) | ||||||||||||||||
Income taxes | 37,491 | 29,832 | 33,646 | 18,769 | ||||||||||||||||||||
Due to third party payors | 15,008 | 28,907 | (3,965 | ) | 14,540 | |||||||||||||||||||
Other accrued liabilities | (14,311 | ) | 4,497 | (6,551 | ) | (16,765 | ) | |||||||||||||||||
Net cash provided by operating activities | 132,290 | 90,039 | 93,067 | 24,322 | ||||||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Routine capital expenditures | (35,422 | ) | (21,263 | ) | (80,691 | ) | (67,425 | ) | ||||||||||||||||
Development capital expenditures | (5,760 | ) | (1,570 | ) | (12,066 | ) | (2,693 | ) | ||||||||||||||||
Acquisitions, net of cash acquired | (2,002 | ) | (38 | ) | (663,757 | ) | (24,136 | ) | ||||||||||||||||
Acquisition deposit | - | - | 195,000 | - | ||||||||||||||||||||
Sale of assets | 3,884 | 8,948 | 7,061 | 22,909 | ||||||||||||||||||||
Proceeds from senior unsecured notes offering held in escrow | - | - | 1,350,000 | - | ||||||||||||||||||||
Interest in escrow for senior unsecured notes | - | - | 23,438 | - | ||||||||||||||||||||
Purchase of insurance subsidiary investments | (16,357 | ) | (74,101 | ) | (59,186 | ) | (97,394 | ) | ||||||||||||||||
Sale of insurance subsidiary investments | 15,987 | 8,447 | 50,780 | 34,967 | ||||||||||||||||||||
Net change in insurance subsidiary cash and cash equivalents | (2,633 | ) | 65,928 | (8,396 | ) | 54,372 | ||||||||||||||||||
Proceeds from note receivable | 25,000 | - | 25,000 | - | ||||||||||||||||||||
Change in other investments | 176 | 317 | 375 | 1,027 | ||||||||||||||||||||
Other | 1,383 | (3 | ) | 590 | (537 | ) | ||||||||||||||||||
Net cash provided by (used in) investing activities | (15,744 | ) | (13,335 | ) | 828,148 | (78,910 | ) | |||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Proceeds from borrowings under revolving credit | 259,700 | 311,500 | 1,414,850 | 1,468,515 | ||||||||||||||||||||
Repayment of borrowings under revolving credit | (349,700 | ) | (355,100 | ) | (1,319,850 | ) | (1,724,615 | ) | ||||||||||||||||
Proceeds from issuance of term loan, net of discount | - | - | 199,000 | 997,500 | ||||||||||||||||||||
Proceeds from issuance of senior unsecured notes | - | - | - | 500,000 | ||||||||||||||||||||
Repayment of Gentiva debt | - | - | (1,177,363 | ) | - | |||||||||||||||||||
Repayment of senior unsecured notes | - | - | - | (550,000 | ) | |||||||||||||||||||
Repayment of term loan | (3,003 | ) | (2,500 | ) | (9,008 | ) | (786,063 | ) | ||||||||||||||||
Repayment of other long-term debt | (500 | ) | (58 | ) | (1,400 | ) | (215 | ) | ||||||||||||||||
Payment of deferred financing costs | (301 | ) | (504 | ) | (3,284 | ) | (3,152 | ) | ||||||||||||||||
Equity offering, net of offering costs | - | 16,376 | - | 220,353 | ||||||||||||||||||||
Issuance of common stock in connection with employee benefit plans | 329 | 1,530 | 534 | 6,217 | ||||||||||||||||||||
Payment of costs associated with issuance of common stock and tangible equity units |
- | - | (915 | ) | - | |||||||||||||||||||
Payment of dividend for mandatory redeemable preferred stock | (2,703 | ) | - | (8,135 | ) | - | ||||||||||||||||||
Dividends paid | (10,065 | ) | (7,754 | ) | (30,067 | ) | (20,840 | ) | ||||||||||||||||
Contributions made by noncontrolling interests | 1,492 | - | 1,492 | - | ||||||||||||||||||||
Distributions to noncontrolling interests | (10,685 | ) | (4,009 | ) | (31,823 | ) | (9,604 | ) | ||||||||||||||||
Other | 245 | 183 | 1,457 | 2,304 | ||||||||||||||||||||
Net cash provided by (used in) financing activities | (115,191 | ) | (40,336 | ) | (964,512 | ) | 100,400 | |||||||||||||||||
Change in cash and cash equivalents | 1,355 | 36,368 | (43,297 | ) | 45,812 | |||||||||||||||||||
Cash and cash equivalents at beginning of period | 119,536 | 45,416 | 164,188 | 35,972 | ||||||||||||||||||||
Cash and cash equivalents at end of period | $ | 120,891 | $ | 81,784 | $ | 120,891 | $ | 81,784 | ||||||||||||||||
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidated and Business Segment Data (a) | ||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||||||||||||||||||||||||||||
Third quarter | ||||||||||||||||||||||||||||||||||||||||||||||
2014 Quarters | 2015 Quarters | % change v. | ||||||||||||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | First | Second | Third | prior year | |||||||||||||||||||||||||||||||||||||||
Consolidated income statement data: | ||||||||||||||||||||||||||||||||||||||||||||||
Revenues | $ | 1,272,610 | $ | 1,261,397 | $ | 1,228,918 | $ | 1,264,674 | $ | 1,675,967 | $ | 1,833,475 | $ | 1,764,516 | 43.6 | |||||||||||||||||||||||||||||||
Core EBITDAR | $ | 181,044 | $ | 175,865 | $ | 157,218 | $ | 170,088 | $ | 234,211 | $ | 261,800 | $ | 236,477 | 50.4 | |||||||||||||||||||||||||||||||
Rent | 78,530 | 77,452 | 77,643 | 79,167 | 91,199 | 95,528 | 95,436 | 22.9 | ||||||||||||||||||||||||||||||||||||||
Core EBITDA | 102,514 | 98,413 | 79,575 | 90,921 | 143,012 | 166,272 | 141,041 | 77.2 | ||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 39,092 | 39,172 | 38,748 | 38,558 | 38,935 | 38,625 | 39,329 | 1.5 | ||||||||||||||||||||||||||||||||||||||
Interest, net | 25,617 | 21,438 | 22,171 | 21,857 | 44,346 | 56,140 | 56,008 | 152.6 | ||||||||||||||||||||||||||||||||||||||
Income from continuing operations before income taxes |
37,805 | 37,803 | 18,656 | 30,506 | 59,731 | 71,507 | 45,704 | 145.0 | ||||||||||||||||||||||||||||||||||||||
Provision for income taxes | 14,445 | 13,612 | 6,168 | 8,471 | 22,466 | 25,721 | 15,298 | 148.0 | ||||||||||||||||||||||||||||||||||||||
Income from continuing operations | 23,360 | 24,191 | 12,488 | 22,035 | 37,265 | 45,786 | 30,406 | 143.5 | ||||||||||||||||||||||||||||||||||||||
Noncontrolling interests | (4,529 | ) | (4,828 | ) | (4,372 | ) | (5,143 | ) | (8,847 | ) | (11,735 | ) | (9,900 | ) | 126.4 | |||||||||||||||||||||||||||||||
Net income attributable to Kindred | $ | 18,831 | $ | 19,363 | $ | 8,116 | $ | 16,892 | $ | 28,418 | $ | 34,051 | $ | 20,506 | 152.7 | |||||||||||||||||||||||||||||||
Core EPS | $ | 0.35 | $ | 0.35 | $ | 0.13 | $ | 0.26 | $ | 0.34 | $ | 0.39 | $ | 0.23 | 76.9 | |||||||||||||||||||||||||||||||
Adjusted Core EPS | $ | 0.46 | $ | 0.50 | $ | 0.20 | $ | 0.38 | $ | 0.43 | $ | 0.51 | $ | 0.33 | 65.0 | |||||||||||||||||||||||||||||||
Diluted shares | 52,711 | 53,792 | 62,902 | 63,163 | 82,422 | 86,402 | 86,892 | 38.1 | ||||||||||||||||||||||||||||||||||||||
Revenues by segment: | ||||||||||||||||||||||||||||||||||||||||||||||
Hospital division | $ | 627,245 | $ | 612,517 | $ | 591,121 | $ | 619,185 | $ | 640,483 | $ | 627,206 | $ | 579,497 | (2.0 | ) | ||||||||||||||||||||||||||||||
Kindred at Home: | ||||||||||||||||||||||||||||||||||||||||||||||
Home health | 74,791 | 75,502 | 74,026 | 74,588 | 300,867 | 427,820 | 424,054 | 472.8 | ||||||||||||||||||||||||||||||||||||||
Hospice | 12,913 | 12,484 | 12,160 | 12,538 | 119,057 | 178,005 | 181,140 | 1,389.6 | ||||||||||||||||||||||||||||||||||||||
87,704 | 87,986 | 86,186 | 87,126 | 419,924 | 605,825 | 605,194 | 602.2 | |||||||||||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | ||||||||||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 93,177 | 94,963 | 93,139 | 92,922 | 151,564 | 152,544 | 149,435 | 60.4 | ||||||||||||||||||||||||||||||||||||||
RehabCare | 253,943 | 253,694 | 246,732 | 252,667 | 252,595 | 236,791 | 219,518 | (11.0 | ) | |||||||||||||||||||||||||||||||||||||
347,120 | 348,657 | 339,871 | 345,589 | 404,159 | 389,335 | 368,953 | 8.6 | |||||||||||||||||||||||||||||||||||||||
Nursing center division | 262,590 | 264,437 | 263,897 | 271,625 | 274,308 | 273,870 | 270,510 | 2.5 | ||||||||||||||||||||||||||||||||||||||
1,324,659 | 1,313,597 | 1,281,075 | 1,323,525 | 1,738,874 | 1,896,236 | 1,824,154 | 42.4 | |||||||||||||||||||||||||||||||||||||||
Eliminations | (52,049 | ) | (52,200 | ) | (52,157 | ) | (58,851 | ) | (62,907 | ) | (62,761 | ) | (59,638 | ) | 14.3 | |||||||||||||||||||||||||||||||
$ | 1,272,610 | $ | 1,261,397 | $ | 1,228,918 | $ | 1,264,674 | $ | 1,675,967 | $ | 1,833,475 | $ | 1,764,516 | 43.6 | ||||||||||||||||||||||||||||||||
Core EBITDAR by segment: | ||||||||||||||||||||||||||||||||||||||||||||||
Hospital division | $ | 139,505 | $ | 131,990 | $ | 117,604 | $ | 134,791 | $ | 134,786 | $ | 131,532 | $ | 97,128 | (17.4 | ) | ||||||||||||||||||||||||||||||
Kindred at Home: | ||||||||||||||||||||||||||||||||||||||||||||||
Home health | 2,845 | 5,769 | 5,961 | 7,398 | 46,798 | 72,917 | 68,155 | 1,043.3 | ||||||||||||||||||||||||||||||||||||||
Hospice | 1,852 | 2,139 | 1,149 | 524 | 16,996 | 27,887 | 34,025 | 2,861.3 | ||||||||||||||||||||||||||||||||||||||
4,697 | 7,908 | 7,110 | 7,922 | 63,794 | 100,804 | 102,180 | 1,337.1 | |||||||||||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | ||||||||||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 25,710 | 25,742 | 24,887 | 23,884 | 44,564 | 44,531 | 42,141 | 69.3 | ||||||||||||||||||||||||||||||||||||||
RehabCare | 18,016 | 19,863 | 17,080 | 16,029 | 16,493 | 14,681 | 14,544 | (14.8 | ) | |||||||||||||||||||||||||||||||||||||
43,726 | 45,605 | 41,967 | 39,913 | 61,057 | 59,212 | 56,685 | 35.1 | |||||||||||||||||||||||||||||||||||||||
Nursing center division | 37,572 | 38,614 | 35,920 | 38,810 | 36,963 | 40,461 | 35,923 | - | ||||||||||||||||||||||||||||||||||||||
Support center | (44,456 | ) | (48,252 | ) | (45,383 | ) | (51,348 | ) | (62,389 | ) | (70,209 | ) | (55,439 | ) | (b) | 22.2 | ||||||||||||||||||||||||||||||
$ | 181,044 | $ | 175,865 | $ | 157,218 | $ | 170,088 | $ | 234,211 | $ | 261,800 | $ | 236,477 | 50.4 | ||||||||||||||||||||||||||||||||
Core EBITDAR margin by segment: | ||||||||||||||||||||||||||||||||||||||||||||||
Hospital division | 22.2 | 21.5 | 19.9 | 21.8 | 21.0 | 21.0 | 16.8 | (15.6 | ) | |||||||||||||||||||||||||||||||||||||
Kindred at Home: | ||||||||||||||||||||||||||||||||||||||||||||||
Home health | 3.8 | 7.6 | 8.1 | 9.9 | 15.6 | 17.0 | 16.1 | 98.8 | ||||||||||||||||||||||||||||||||||||||
Hospice | 14.3 | 17.1 | 9.4 | 4.2 | 14.3 | 15.7 | 18.8 | 100.0 | ||||||||||||||||||||||||||||||||||||||
Kindred at Home | 5.4 | 9.0 | 8.2 | 9.1 | 15.2 | 16.6 | 16.9 | 106.1 | ||||||||||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | ||||||||||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 27.6 | 27.1 | 26.7 | 25.7 | 29.4 | 29.2 | 28.2 | 5.6 | ||||||||||||||||||||||||||||||||||||||
RehabCare | 7.1 | 7.8 | 6.9 | 6.3 | 6.5 | 6.2 | 6.6 | (4.3 | ) | |||||||||||||||||||||||||||||||||||||
Kindred Rehabilitation Services | 12.6 | 13.1 | 12.3 | 11.5 | 15.1 | 15.2 | 15.4 | 25.2 | ||||||||||||||||||||||||||||||||||||||
Nursing center division | 14.3 | 14.6 | 13.6 | 14.3 | 13.5 | 14.8 | 13.3 | (2.2 | ) | |||||||||||||||||||||||||||||||||||||
Consolidated | 14.2 | 13.9 | 12.8 | 13.4 | 14.0 | 14.3 | 13.4 | 4.7 | ||||||||||||||||||||||||||||||||||||||
__________ |
||||||||||||||||||||||||||||||||||||||||||||||
(a) |
See reconciliation of core and adjusted results to GAAP results beginning on page 12. |
|||||||||||||||||||||||||||||||||||||||||||||
(b) |
Includes a $9 million change in estimate to lower incentive compensation costs recorded in prior periods. |
|||||||||||||||||||||||||||||||||||||||||||||
KINDRED HEALTHCARE, INC. | |||||||||||||||||||||||||||||
Condensed Business Segment Data (Continued) | |||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||
(In thousands, except statistics) | |||||||||||||||||||||||||||||
Third quarter | |||||||||||||||||||||||||||||
2014 Quarters | 2015 Quarters | % change v. | |||||||||||||||||||||||||||
First | Second | Third | Fourth | First | Second | Third | prior year | ||||||||||||||||||||||
Hospital division: | |||||||||||||||||||||||||||||
End of period data: | |||||||||||||||||||||||||||||
Number of transitional care hospitals | 97 | 97 | 97 | 97 | 97 | 96 | 95 | ||||||||||||||||||||||
Number of licensed beds | 7,145 | 7,145 | 7,145 | 7,147 | 7,147 | 7,124 | 7,094 | ||||||||||||||||||||||
Revenue mix %: | |||||||||||||||||||||||||||||
Medicare | 59.8 | 58.2 | 57.0 | 57.0 | 56.8 | 55.2 | 57.1 | ||||||||||||||||||||||
Medicaid | 6.6 | 6.8 | 6.9 | 6.0 | 5.5 | 5.3 | 5.3 | ||||||||||||||||||||||
Medicare Advantage | 11.4 | 11.2 | 10.5 | 10.5 | 11.9 | 11.6 | 10.8 | ||||||||||||||||||||||
Medicaid Managed | 2.4 | 3.0 | 3.8 | 4.5 | 4.7 | 5.6 | 6.1 | ||||||||||||||||||||||
Commercial insurance and other | 19.8 | 20.8 | 21.8 | 22.0 | 21.1 | 22.3 | 20.7 | ||||||||||||||||||||||
Admissions: | |||||||||||||||||||||||||||||
Medicare | 9,038 | 8,555 | 8,460 | 8,525 | 8,775 | 8,267 | 7,976 | (5.7) | |||||||||||||||||||||
Medicaid | 819 | 896 | 805 | 750 | 610 | 610 | 556 | (30.9) | |||||||||||||||||||||
Medicare Advantage | 1,435 | 1,389 | 1,250 | 1,359 | 1,555 | 1,352 | 1,212 | (3.0) | |||||||||||||||||||||
Medicaid Managed | 317 | 381 | 511 | 572 | 643 | 675 | 646 | 26.4 | |||||||||||||||||||||
Commercial insurance and other | 1,914 | 1,885 | 1,703 | 1,696 | 1,868 | 1,815 | 1,763 | 3.5 | |||||||||||||||||||||
13,523 | 13,106 | 12,729 | 12,902 | 13,451 | 12,719 | 12,153 | (4.5) | ||||||||||||||||||||||
Patient days: | |||||||||||||||||||||||||||||
Medicare | 230,350 | 220,035 | 213,170 | 220,548 | 228,483 | 218,577 | 210,870 | (1.1) | |||||||||||||||||||||
Medicaid | 32,712 | 32,619 | 30,480 | 30,454 | 28,663 | 25,213 | 23,167 | (24.0) | |||||||||||||||||||||
Medicare Advantage | 44,025 | 43,027 | 39,938 | 41,260 | 48,448 | 44,740 | 39,585 | (0.9) | |||||||||||||||||||||
Medicaid Managed | 10,733 | 13,191 | 16,556 | 20,000 | 22,013 | 24,833 | 24,412 | 47.5 | |||||||||||||||||||||
Commercial insurance and other | 59,567 | 59,293 | 57,486 | 59,295 | 62,241 | 62,922 | 58,631 | 2.0 | |||||||||||||||||||||
377,387 | 368,165 | 357,630 | 371,557 | 389,848 | 376,285 | 356,665 | (0.3) | ||||||||||||||||||||||
Average length of stay: | |||||||||||||||||||||||||||||
Medicare | 25.5 | 25.7 | 25.2 | 25.9 | 26.0 | 26.4 | 26.4 | 4.8 | |||||||||||||||||||||
Medicaid | 39.9 | 36.4 | 37.9 | 40.6 | 47.0 | 41.3 | 41.7 | 10.0 | |||||||||||||||||||||
Medicare Advantage | 30.7 | 31.0 | 32.0 | 30.4 | 31.2 | 33.1 | 32.7 | 2.2 | |||||||||||||||||||||
Medicaid Managed | 33.9 | 34.6 | 32.4 | 35.0 | 34.2 | 36.8 | 37.8 | 16.7 | |||||||||||||||||||||
Commercial insurance and other | 31.1 | 31.5 | 33.8 | 35.0 | 33.3 | 34.7 | 33.3 | (1.5) | |||||||||||||||||||||
Weighted average | 27.9 | 28.1 | 28.1 | 28.8 | 29.0 | 29.6 | 29.3 | 4.3 | |||||||||||||||||||||
Revenues per admission: | |||||||||||||||||||||||||||||
Medicare | $ 41,492 | $ 41,670 | $ 39,828 | $ 41,425 | $ 41,483 | $ 41,892 | $ 41,451 | 4.1 | |||||||||||||||||||||
Medicaid | 50,894 | 46,106 | 50,344 | 49,760 | 57,594 | 54,795 | 55,415 | 10.1 | |||||||||||||||||||||
Medicare Advantage | 49,666 | 49,352 | 49,814 | 47,756 | 48,908 | 53,578 | 51,495 | 3.4 | |||||||||||||||||||||
Medicaid Managed | 47,803 | 48,814 | 44,321 | 48,691 | 46,740 | 51,950 | 54,976 | 24.0 | |||||||||||||||||||||
Commercial insurance and other | 64,858 | 67,679 | 75,591 | 80,167 | 72,395 | 77,110 | 68,151 | (9.8) | |||||||||||||||||||||
Weighted average | 46,384 | 46,736 | 46,439 | 47,991 | 47,616 | 49,312 | 47,683 | 2.7 | |||||||||||||||||||||
Revenues per patient day: | |||||||||||||||||||||||||||||
Medicare | $ 1,628 | $ 1,620 | $ 1,581 | $ 1,601 | $ 1,593 | $ 1,584 | $ 1,568 | (0.8) | |||||||||||||||||||||
Medicaid | 1,274 | 1,266 | 1,330 | 1,225 | 1,226 | 1,326 | 1,330 | - | |||||||||||||||||||||
Medicare Advantage | 1,619 | 1,593 | 1,559 | 1,573 | 1,570 | 1,619 | 1,577 | 1.2 | |||||||||||||||||||||
Medicaid Managed | 1,412 | 1,410 | 1,368 | 1,393 | 1,365 | 1,412 | 1,455 | 6.4 | |||||||||||||||||||||
Commercial insurance and other | 2,084 | 2,152 | 2,239 | 2,293 | 2,173 | 2,224 | 2,049 | (8.5) | |||||||||||||||||||||
Weighted average | 1,662 | 1,664 | 1,653 | 1,666 | 1,643 | 1,667 | 1,625 | (1.7) | |||||||||||||||||||||
Medicare case mix index (discharged patients only) |
1.173 | 1.182 | 1.157 | 1.139 | 1.166 | 1.163 | 1.150 | (0.6) | |||||||||||||||||||||
Average daily census | 4,193 | 4,046 | 3,887 | 4,039 | 4,332 | 4,135 | 3,877 | (0.3) | |||||||||||||||||||||
Occupancy % | 67.3 | 64.6 | 62.1 | 64.5 | 69.2 | 66.1 | 62.2 | 0.2 | |||||||||||||||||||||
Same-hospital data: | |||||||||||||||||||||||||||||
Revenues (a) | $ 620,866 | $ 606,408 | $ 585,553 | $ 614,207 | $ 634,975 | $ 622,018 | $ 577,337 | (1.4) | |||||||||||||||||||||
Admissions: | |||||||||||||||||||||||||||||
Medicare | 8,910 | 8,423 | 8,342 | 8,403 | 8,652 | 8,172 | 7,932 | (4.9) | |||||||||||||||||||||
Medicaid | 812 | 885 | 794 | 739 | 602 | 608 | 556 | (30.0) | |||||||||||||||||||||
Medicare Advantage | 1,429 | 1,376 | 1,244 | 1,351 | 1,546 | 1,348 | 1,212 | (2.6) | |||||||||||||||||||||
Medicaid Managed | 315 | 377 | 511 | 568 | 640 | 670 | 644 | 26.0 | |||||||||||||||||||||
Commercial insurance and other | 1,895 | 1,863 | 1,688 | 1,669 | 1,840 | 1,797 | 1,762 | 4.4 | |||||||||||||||||||||
13,361 | 12,924 | 12,579 | 12,730 | 13,280 | 12,595 | 12,106 | (3.8) | ||||||||||||||||||||||
Patient days: | |||||||||||||||||||||||||||||
Medicare | 227,635 | 217,074 | 210,386 | 218,127 | 225,992 | 216,230 | 209,662 | (0.3) | |||||||||||||||||||||
Medicaid | 32,303 | 32,260 | 30,254 | 30,207 | 28,458 | 25,060 | 23,141 | (23.5) | |||||||||||||||||||||
Medicare Advantage | 43,906 | 42,802 | 39,859 | 41,153 | 48,276 | 44,548 | 39,585 | (0.7) | |||||||||||||||||||||
Medicaid Managed | 10,714 | 13,143 | 16,515 | 19,906 | 21,933 | 24,673 | 24,280 | 47.0 | |||||||||||||||||||||
Commercial insurance and other | 59,059 | 58,968 | 57,185 | 58,833 | 61,715 | 62,462 | 58,625 | 2.5 | |||||||||||||||||||||
373,617 | 364,247 | 354,199 | 368,226 | 386,374 | 372,973 | 355,293 | 0.3 | ||||||||||||||||||||||
Total average length of stay | 28.0 | 28.2 | 28.2 | 28.9 | 29.1 | 29.6 | 29.3 | 3.9 | |||||||||||||||||||||
Total revenues per patient day | $ 1,662 | $ 1,665 | $ 1,653 | $ 1,668 | $ 1,643 | $ 1,668 | $ 1,625 | (1.7) | |||||||||||||||||||||
__________ |
|||||||||||||||||||||||||||||
(a) |
See reconciliation of same-hospital revenues to reported revenues for the Hospital Division on page 14. |
||||||||||||||||||||||||||||
KINDRED HEALTHCARE, INC. | |||||||||||||||||||||||||||||||||||||
Condensed Business Segment Data (Continued) | |||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||
(In thousands, except statistics) | |||||||||||||||||||||||||||||||||||||
Third quarter | |||||||||||||||||||||||||||||||||||||
2014 Quarters | 2015 Quarters | % change v. | |||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | First | Second | Third | prior year | ||||||||||||||||||||||||||||||
Kindred at Home (data combined to include Kindred and Gentiva for each historical period): |
|||||||||||||||||||||||||||||||||||||
Home Health: | |||||||||||||||||||||||||||||||||||||
Sites of service (at end of period) | 447 | 440 | 439 | 427 | 415 | 411 | 388 | ||||||||||||||||||||||||||||||
Revenue mix %: | |||||||||||||||||||||||||||||||||||||
Medicare | 81.8 | 81.5 | 80.7 | 80.7 | 80.9 | 80.4 | 80.0 | ||||||||||||||||||||||||||||||
Medicaid | 2.7 | 2.6 | 2.4 | 2.2 | 2.1 | 2.1 | 2.1 | ||||||||||||||||||||||||||||||
Commercial and other | 9.1 | 9.0 | 8.9 | 6.7 | 7.3 | 7.9 | 8.2 | ||||||||||||||||||||||||||||||
Commercial paid at episodic rates | 6.4 | 6.9 | 8.0 | 10.4 | 9.7 | 9.6 | 9.7 | ||||||||||||||||||||||||||||||
Episodic revenues ($ 000s) | $ | 281,226 | $ | 294,208 | $ | 292,675 | $ | 305,668 | $ | 308,317 | $ | 324,027 | $ | 319,820 | 9.3 | ||||||||||||||||||||||
Total episodic admissions | 65,077 | 63,676 | 65,049 | 65,183 | 69,936 | 67,808 | 66,753 | 2.6 | |||||||||||||||||||||||||||||
Medicare episodic admissions | 59,248 | 58,140 | 57,921 | 57,372 | 61,186 | 59,394 | 58,479 | 1.0 | |||||||||||||||||||||||||||||
Total episodes | 103,758 | 103,689 | 105,906 | 106,708 | 110,980 | 109,599 | 108,519 | 2.5 | |||||||||||||||||||||||||||||
Episodes per admission | 1.59 | 1.63 | 1.63 | 1.64 | 1.59 | 1.62 | 1.63 | - | |||||||||||||||||||||||||||||
Revenue per episode | $ | 2,710 | $ | 2,837 | $ | 2,764 | $ | 2,865 | $ | 2,778 | $ | 2,956 | $ | 2,947 | 6.6 | ||||||||||||||||||||||
Hospice: | |||||||||||||||||||||||||||||||||||||
Sites of service (at end of period) | 216 | 200 | 199 | 193 | 190 | 185 | 181 | ||||||||||||||||||||||||||||||
Admissions | 13,807 | 12,751 | 12,088 | 12,151 | 13,164 | 12,574 | 12,091 | - | |||||||||||||||||||||||||||||
Average length of stay | 103 | 106 | 103 | 103 | 95 | 93 | 101 | (1.9 | ) | ||||||||||||||||||||||||||||
Patient days | 1,252,787 | 1,251,301 | 1,236,792 | 1,215,209 | 1,150,841 | 1,190,604 | 1,211,291 | (2.1 | ) | ||||||||||||||||||||||||||||
Revenue per patient day | $ | 150 | $ | 148 | $ | 149 | $ | 154 | $ | 151 | $ | 150 | $ | 150 | 0.7 | ||||||||||||||||||||||
Average daily census | 13,920 | 13,751 | 13,443 | 13,209 | 12,787 | 13,084 | 13,166 | (2.1 | ) | ||||||||||||||||||||||||||||
Community Care and other revenues (included in Home Health business segment) |
$ | 66,732 | $ | 66,372 | $ | 67,390 | $ | 67,621 | $ | 65,530 | $ | 67,647 | $ | 67,338 | (0.1 | ) | |||||||||||||||||||||
Kindred Rehabilitation Services: | |||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services: | |||||||||||||||||||||||||||||||||||||
Freestanding IRFs: | |||||||||||||||||||||||||||||||||||||
End of period data: | |||||||||||||||||||||||||||||||||||||
Number of IRFs | 5 | 5 | 5 | 5 | 16 | 16 | 18 | ||||||||||||||||||||||||||||||
Number of licensed beds | 215 | 215 | 215 | 215 | 829 | 829 | 919 | ||||||||||||||||||||||||||||||
Discharges (a) | 1,053 | 1,121 | 1,004 | 1,046 | 3,806 | 3,927 | 3,941 | 292.5 | |||||||||||||||||||||||||||||
Occupancy % (a) | 71.6 | 71.6 | 68.5 | 69.6 | 73.2 | 71.5 | 68.7 | 0.3 | |||||||||||||||||||||||||||||
Average length of stay (a) | 13.2 | 12.5 | 13.5 | 13.2 | 13.7 | 13.1 | 13.2 | (2.2 | ) | ||||||||||||||||||||||||||||
Revenue per discharge (a) | $ | 18,246 | $ | 17,519 | $ | 18,259 | $ | 17,039 | $ | 19,517 | $ | 19,325 | $ | 18,992 | 4.0 | ||||||||||||||||||||||
Contract services: | |||||||||||||||||||||||||||||||||||||
Sites of service (at end of period): | |||||||||||||||||||||||||||||||||||||
Inpatient rehabilitation units | 105 | 104 | 102 | 100 | 100 | 99 | 101 | ||||||||||||||||||||||||||||||
LTAC hospitals | 121 | 118 | 117 | 117 | 120 | 120 | 119 | ||||||||||||||||||||||||||||||
Sub-acute units | 10 | 9 | 10 | 10 | 8 | 8 | 7 | ||||||||||||||||||||||||||||||
Outpatient units | 143 | 143 | 139 | 138 | 138 | 139 | 135 | ||||||||||||||||||||||||||||||
379 | 374 | 368 | 365 | 366 | 366 | 362 | |||||||||||||||||||||||||||||||
Revenue per site | $ | 195,157 | $ | 201,400 | $ | 203,284 | $ | 205,749 | $ | 211,151 | $ | 209,436 | $ | 206,041 | 1.4 | ||||||||||||||||||||||
RehabCare: | |||||||||||||||||||||||||||||||||||||
Sites of service (at end of period) | 1,851 | 1,863 | 1,896 | 1,935 | 1,829 | 1,789 | 1,821 | ||||||||||||||||||||||||||||||
Revenue per site | $ | 137,193 | $ | 136,175 | $ | 130,133 | $ | 130,576 | $ | 138,106 | $ | 132,359 | $ | 120,548 | (7.4 | ) | |||||||||||||||||||||
Nursing center division: | |||||||||||||||||||||||||||||||||||||
End of period data: | |||||||||||||||||||||||||||||||||||||
Number of nursing centers | 89 | 89 | 90 | 90 | 90 | 90 | 90 | ||||||||||||||||||||||||||||||
Number of licensed beds | 11,503 | 11,491 | 11,575 | 11,535 | 11,535 | 11,535 | 11,535 | ||||||||||||||||||||||||||||||
Admissions (b) | 9,789 | 9,621 | 9,746 | 9,616 | 10,376 | 9,831 | 9,558 | (1.9 | ) | ||||||||||||||||||||||||||||
Medicare average length of stay (b) | 29.6 | 29.8 | 29.9 | 29.0 | 28.9 | 28.9 | 28.5 | (4.7 | ) | ||||||||||||||||||||||||||||
Patient days (b) | 861,340 | 858,772 | 865,415 | 871,976 | 861,278 | 852,691 | 851,332 | (1.6 | ) | ||||||||||||||||||||||||||||
Revenues per patient day (b) | $ | 305 | $ | 308 | $ | 305 | $ | 312 | $ | 319 | $ | 321 | $ | 318 | 4.3 | ||||||||||||||||||||||
Average daily census (b) | 9,570 | 9,437 | 9,407 | 9,478 | 9,570 | 9,370 | 9,254 | (1.6 | ) | ||||||||||||||||||||||||||||
Occupancy % (b) | 81.7 | 80.7 | 80.1 | 80.5 | 81.3 | 79.6 | 78.6 | (1.9 | ) | ||||||||||||||||||||||||||||
__________ |
|||||||||||||||||||||||||||||||||||||
(a) |
Excludes non-consolidating IRF. |
||||||||||||||||||||||||||||||||||||
(b) |
Excludes managed facilities. |
||||||||||||||||||||||||||||||||||||
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, but are not limited to, statements regarding the Company’s acquisitions of Gentiva and Centerre (including the benefits, results and effects of such acquisitions), all statements regarding the Company’s expected future financial position, results of operations, cash flows, dividends, financing plans, business strategy, budgets, capital expenditures, competitive positions, growth opportunities, plans and objectives of management, and statements containing the words such as “anticipate,” “approximate,” “believe,” “plan,” “estimate,” “expect,” “project,” “could,” “would,” “should,” “will,” “intend,” “may,” “potential,” “upside,” and other similar expressions. Statements in this press release concerning the Company’s business outlook or future economic performance, anticipated profitability, revenues, expenses, dividends or other financial items, and product or services line growth, together with other statements that are not historical facts, are forward-looking statements that are estimates reflecting the best judgment of the Company based upon currently available information.
Such forward-looking statements are inherently uncertain, and stockholders and other potential investors must recognize that actual results may differ materially from the Company’s expectations as a result of a variety of factors, including, without limitation, those discussed below. Such forward-looking statements are based upon management’s current expectations and include known and unknown risks, uncertainties and other factors, many of which the Company is unable to predict or control, that may cause the Company’s actual results, performance or plans to differ materially from any future results, performance or plans expressed or implied by such forward-looking statements. These statements involve risks, uncertainties and other factors discussed below and detailed from time to time in the Company’s filings with the Securities and Exchange Commission.
Risks and uncertainties related to the Company’s acquisitions of Gentiva and Centerre include, but are not limited to, uncertainties as to whether the acquisitions will have the accretive effect on the Company’s earnings or cash flows that it expects, the inability to obtain, or delays in obtaining, cost savings and synergies from the acquisitions, costs and difficulties related to the integration of Gentiva’s and Centerre’s businesses and operations with the Company’s businesses and operations, unexpected costs, liabilities, charges or expenses resulting from the acquisitions, adverse effects on the Company’s stock price resulting from the acquisitions, the inability to retain key personnel, and potential adverse reactions, changes to business relationships or competitive responses resulting from the acquisitions.
In addition to the factors set forth above, other factors that may affect the Company’s plans, results or stock price are set forth in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Many of these factors are beyond the Company’s control. The Company cautions investors that any forward-looking statements made by the Company are not guarantees of future performance. The Company disclaims any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments.
Non-GAAP Measurements
In addition to the results provided in accordance with GAAP, the Company has provided information in this release to compute certain non-GAAP measurements for the three quarters in 2015, four quarters in 2014 and nine months ended September 30, 2015 and 2014 before certain charges or on a core and adjusted core basis, and on a same-hospital basis. The use of these non-GAAP measures are not intended to replace the presentation of the Company’s financial results in accordance with GAAP. The Company believes that the presentation of core operating results provides additional information to investors to facilitate the comparison between periods by excluding certain charges that are not representative of its ongoing operations due to the materiality and nature of the charges. The Company believes the presentation of adjusted core operating results, which excludes non-cash expenses related to amortization of intangible assets, stock-based compensation and deferred financing costs from core operating results, is a useful performance measure used by some investors, equity analysts and others to make informed investment decisions and for comparability to other companies that use similar measures. The Company believes the presentation of same-hospital revenues, which excludes the results from two hospitals that closed during 2015, provides investors, equity analysts and others with useful information regarding the performance of the Company's hospital operations that are comparable for the periods presented. The Company believes that reported hospital segment revenues is the most comparable GAAP measure. Readers of the Company’s financial information should consider reported hospital segment revenues as an important measure of the Company’s Hospital Division financial performance because it provides the most complete measure of its revenues. The Company’s earnings release also includes financial measures referred to as operating income, or EBITDAR or core EBITDAR, and earnings before interest, income taxes, depreciation and amortization (“EBITDA”). The Company’s management uses core EBITDAR or core EBITDA as meaningful measures of operational performance in addition to other measures. The Company uses core EBITDAR or core EBITDA to assess the relative performance of its operating divisions as well as the employees that operate these businesses. In addition, the Company believes these measurements are important because securities analysts and investors use these measurements to compare the Company’s performance to other companies in the healthcare industry. The Company believes that income (loss) from continuing operations is the most comparable GAAP measure. Readers of the Company’s financial information should consider income (loss) from continuing operations as an important measure of the Company’s financial performance because it provides the most complete measure of its performance. Operating results presented on a core and adjusted core basis and core EBITDAR or core EBITDA, as well as a same-hospital basis, should be considered in addition to, not as a substitute for, or superior to, financial measures based upon GAAP as an indicator of operating performance. Reconciliations of the non-GAAP measurements to the GAAP measurements are included in the following pages of this press release.
Also in this press release, the Company provides the financial measures of operating cash flows and free cash flows excluding certain items, which the Company refers to as core operating cash flows and core free cash flows. The Company recognizes that operating cash flows and free cash flows excluding certain items are non-GAAP measurements and are not intended to replace the presentation of the Company’s cash flows in accordance with GAAP. The Company believes that these non-GAAP measurements provide important information to investors for comparability to other companies that use similar measures. In addition, management uses operating cash flows and free cash flows excluding certain items in making decisions related to acquisitions, development capital expenditures, dividends, long-term debt repayments and other uses. The Company believes net cash flows provided by operating activities is the most comparable GAAP measure. Readers of the Company’s financial information should consider net cash flows provided by operating activities as an important measure of the Company’s financial performance because it provides the most complete measure of its performance. Operating cash flows and free cash flows excluding certain items should be considered in addition to, not as a substitute for, or superior to, financial measures based upon GAAP as an indicator of operating performance. Reconciliations of net cash flows provided by operating activities to operating cash flows and free cash flows excluding certain items are included in this press release.
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||
Reconciliation of Non-GAAP Measurements to GAAP Results | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
(In thousands, except per share amounts and statistics) | ||||||||||||||||||||||||
In addition to the results provided in accordance with GAAP, the Company has provided information in this release to compute certain non-GAAP measurements for the three months and nine months ended September 30, 2015 and 2014 before certain charges or on a core basis. The charges that were excluded from core operating results are denoted in the tables below. | ||||||||||||||||||||||||
The income tax benefit associated with the excluded charges was calculated using an effective income tax rate of 6.9% and 31.2% for the three months ended September 30, 2015 and 2014, respectively, and 19.7% and 36.5% for the nine months ended September 30, 2015 and 2014, respectively. The difference in the effective income tax rate for both periods compared to the same prior year periods is attributable to the composition of charges that are non-deductible or the deductibility is uncertain for income tax purposes, including the litigation contingency expense. | ||||||||||||||||||||||||
The use of these non-GAAP measures are not intended to replace the presentation of the Company’s financial results in accordance with GAAP. The Company believes that the presentation of core operating results provides additional information to investors to facilitate the comparison between periods by excluding certain charges for the three months and nine months ended September 30, 2015 and 2014 that are not representative of its ongoing operations due to the materiality and the nature of the charges. The Company's core operating results also represent a key performance measure for the purpose of evaluating performance internally. The Company believes the presentation of adjusted core operating results, which excludes non-cash expenses related to amortization of intangible assets, stock-based compensation and deferred financing costs from core operating results, is a performance measure used by some investors, equity analysts and others to make informed investment decisions and for comparability to other companies that use similar measures. | ||||||||||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||
Detail of charges: | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||
Litigation contingency expense | ($31,462 | ) | $ | - | ($130,387 | ) | ($4,600 | ) | ||||||||||||||||
Retirement and severance costs | (666 | ) | (1,686 | ) | (5,627 | ) | (6,636 | ) | ||||||||||||||||
Hospital and home health/hospice closings | (3,368 | ) | - | (7,789 | ) | - | ||||||||||||||||||
Development project cancellation and other restructuring costs | - | - | (1,259 | ) | - | |||||||||||||||||||
Customer bankruptcy | - | (1,857 | ) | - | (1,857 | ) | ||||||||||||||||||
Gentiva transaction and integration costs: | ||||||||||||||||||||||||
Professional and consulting fees | (1,113 | ) | (3,200 | ) | (35,178 | ) | (5,279 | ) | ||||||||||||||||
Severance and retention | (1,956 | ) | - | (58,831 | ) | - | ||||||||||||||||||
Lease termination (charged to rent expense) | - | - | (792 | ) | - | |||||||||||||||||||
Pre-closing financing charges (charged to general and administrative expenses) | - | - | (6,005 | ) | - | |||||||||||||||||||
Pre-closing financing charges (charged to interest expense) | - | - | (17,431 | ) | - | |||||||||||||||||||
Trade name impairment charges | - | - | (6,726 | ) | - | |||||||||||||||||||
Lease termination (charged to rent expense) | (808 | ) | - | (1,831 | ) | (247 | ) | |||||||||||||||||
Debt refinancing costs (charged to interest expense) | - | - | - | (56,643 | ) | |||||||||||||||||||
Other transaction costs | (777 | ) | (914 | ) | (3,750 | ) | (4,014 | ) | ||||||||||||||||
(40,150 | ) | (7,657 | ) | (275,606 | ) | (79,276 | ) | |||||||||||||||||
Income tax benefit | 2,775 | 2,391 | 54,302 | 28,936 | ||||||||||||||||||||
Charges net of income taxes | (37,375 | ) | (5,266 | ) | (221,304 | ) | (50,340 | ) | ||||||||||||||||
Allocation to participating unvested restricted stockholders | - | 133 | - | - | ||||||||||||||||||||
Available to common stockholders | ($37,375 | ) | ($5,133 | ) | ($221,304 | ) | ($50,340 | ) | ||||||||||||||||
Weighted average diluted shares outstanding | 86,184 | 62,902 | 83,960 | 56,443 | ||||||||||||||||||||
Diluted loss per common share related to charges | ($0.43 | ) | ($0.08 | ) | ($2.64 | ) | ($0.89 | ) | ||||||||||||||||
Reconciliation of income from continuing operations before charges: | ||||||||||||||||||||||||
Amounts attributable to Kindred stockholders: | ||||||||||||||||||||||||
Income from continuing operations before charges | $ | 20,506 | $ | 8,116 | $ | 82,975 | $ | 46,310 | ||||||||||||||||
Charges net of income taxes | (37,375 | ) | (5,266 | ) | (221,304 | ) | (50,340 | ) | ||||||||||||||||
Reported income (loss) from continuing operations | ($16,869 | ) | $ | 2,850 | ($138,329 | ) | ($4,030 | ) | ||||||||||||||||
Reconciliation of diluted earnings per common share from continuing operations before charges: | ||||||||||||||||||||||||
Diluted earnings per common share before charges (a) | $ | 0.23 | $ | 0.13 | $ | 0.95 | $ | 0.80 | ||||||||||||||||
Charges net of income taxes | (0.43 | ) | (0.08 | ) | (2.64 | ) | (0.89 | ) | ||||||||||||||||
Other | - | (0.01 | ) | 0.04 | 0.02 | |||||||||||||||||||
Reported diluted earnings (loss) per common share from continuing operations | ($0.20 | ) | $ | 0.04 | ($1.65 | ) | ($0.07 | ) | ||||||||||||||||
|
||||||||||||||||||||||||
Weighted average diluted shares used to compute earnings per common share from continuing operations before charges |
86,892 | 62,902 | 85,691 | 56,506 | ||||||||||||||||||||
Reconciliation of effective income tax rate before charges: | ||||||||||||||||||||||||
Effective income tax rate before charges | 33.5 | % | 33.1 | % | 35.9 | % | 36.3 | % | ||||||||||||||||
Impact of charges on effective income tax rate | 192.0 | % | 1.2 | % | -26.6 | % | -1.0 | % | ||||||||||||||||
Reported effective income tax rate | 225.5 | % | 34.3 | % | 9.3 | % | 35.3 | % | ||||||||||||||||
__________ |
||||||||||||||||||||||||
(a) |
For purposes of computing diluted earnings per common share before charges, income from continuing operations before charges was reduced by $0.3 million and $0.2 million for the three months ended September 30, 2015 and 2014, respectively, and by $1.5 million and $1.3 million for the nine months ended September 30, 2015 and 2014, respectively, for the allocation of income to participating unvested restricted stockholders. |
|||||||||||||||||||||||
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||||
Reconciliation of Non-GAAP Measurements to GAAP Results (Continued) | ||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||
(In thousands, except per share amounts and statistics) | ||||||||||||||||||||||||||||||||||||
A reconciliation of adjusted core earnings follows: | ||||||||||||||||||||||||||||||||||||
2014 Quarters | 2015 Quarters | |||||||||||||||||||||||||||||||||||
Reconciliation of adjusted core earnings: | First | Second | Third | Fourth | First | Second | Third | |||||||||||||||||||||||||||||
Income from continuing operations before charges (as calculated and reconciled to GAAP measurement on the following pages) |
$ | 18,831 | $ | 19,363 | $ | 8,116 | $ | 16,892 | $ | 28,418 | $ | 34,051 | $ | 20,506 | ||||||||||||||||||||||
Add back non-cash expenses: | ||||||||||||||||||||||||||||||||||||
Amortization of intangible assets | 5,560 | 5,513 | 5,378 | 5,215 | 6,932 | 7,536 | 7,728 | |||||||||||||||||||||||||||||
Amortization of stock-based compensation costs | 2,585 | 5,924 | 748 | 5,073 | 3,141 | 6,687 | 3,194 | |||||||||||||||||||||||||||||
Amortization of deferred financing costs | 2,397 | 1,950 | 1,982 | 2,044 | 3,062 | 3,539 | 3,554 | |||||||||||||||||||||||||||||
10,542 | 13,387 | 8,108 | 12,332 | 13,135 | 17,762 | 14,476 | ||||||||||||||||||||||||||||||
Income tax benefit related to non-cash expenses | 4,148 | 5,268 | 3,190 | 4,853 | 5,169 | 6,989 | 5,696 | |||||||||||||||||||||||||||||
Non-cash expenses, net of income taxes | 6,394 | 8,119 | 4,918 | 7,479 | 7,966 | 10,773 | 8,780 | |||||||||||||||||||||||||||||
Adjusted core earnings | $ | 25,225 | $ | 27,482 | $ | 13,034 | $ | 24,371 | $ | 36,384 | $ | 44,824 | $ | 29,286 | ||||||||||||||||||||||
Reconciliation of diluted adjusted core earnings from continuing operations: | ||||||||||||||||||||||||||||||||||||
Diluted income per common share before charges (as calculated on the following pages) |
$ | 0.35 | $ | 0.35 | $ | 0.13 | $ | 0.26 | $ | 0.34 | $ | 0.39 | $ | 0.23 | ||||||||||||||||||||||
Non-cash expenses, net of income taxes | 0.11 | 0.15 | 0.07 | 0.12 | 0.09 | 0.12 | 0.10 | |||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Diluted adjusted core earnings per common share from continuing operations |
$ | 0.46 | $ | 0.50 | $ | 0.20 | $ | 0.38 | $ | 0.43 | $ | 0.51 | $ | 0.33 | ||||||||||||||||||||||
Weighted average diluted shares used to compute adjusted core earnings per common share |
52,711 | 53,792 | 62,902 | 63,163 | 82,422 | 86,402 | 86,892 | |||||||||||||||||||||||||||||
A reconciliation of combined Kindred and Gentiva home health revenues (excluding community care) for each historical period follows: | ||||||||||||||||||||||||||||||||||||
Third quarter | ||||||||||||||||||||||||||||||||||||
2014 Quarters | 2015 Quarters | % change v. | ||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | First | Second | Third | prior year | |||||||||||||||||||||||||||||
Kindred | $ | 67,266 | $ | 67,830 | $ | 65,954 | $ | 66,491 | $ | 254,965 | $ | 360,173 | $ | 356,716 | ||||||||||||||||||||||
Gentiva | 253,895 | 267,018 | 266,340 | 275,342 | 87,520 | - | - | |||||||||||||||||||||||||||||
$ | 321,161 | $ | 334,848 | $ | 332,294 | $ | 341,833 | $ | 342,485 | $ | 360,173 | $ | 356,716 | 7.3 | ||||||||||||||||||||||
A reconciliation of same-hospital revenues to reported revenues for the Hospital Division for each historical period follows: | ||||||||||||||||||||||||||||||||||||
Third quarter | ||||||||||||||||||||||||||||||||||||
2014 Quarters | 2015 Quarters | % change v. | ||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | First | Second | Third | prior year | |||||||||||||||||||||||||||||
Same-hospital revenues | $ | 620,866 | $ | 606,408 | $ | 585,553 | $ | 614,207 | $ | 634,975 | $ | 622,018 | $ | 577,337 | (1.4 | ) | ||||||||||||||||||||
Two hospitals that closed during 2015 (a) | 6,379 | 6,109 | 5,568 | 4,978 | 5,508 | 5,188 | 2,160 | |||||||||||||||||||||||||||||
Reported revenues | $ | 627,245 | $ | 612,517 | $ | 591,121 | $ | 619,185 | $ | 640,483 | $ | 627,206 | $ | 579,497 | (2.0 | ) | ||||||||||||||||||||
__________ |
||||||||||||||||||||||||||||||||||||
(a) |
One hospital closed during the second quarter of 2015 and one hospital closed during the third quarter of 2015. |
|||||||||||||||||||||||||||||||||||
KINDRED HEALTHCARE, INC. | |||||||||||||||||||||||||||||||||||||||
Reconciliation of Non-GAAP Measurements to GAAP Results (Continued) | |||||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||||||||||||||||||||||
Three months ended September 30, 2015 | |||||||||||||||||||||||||||||||||||||||
Charges | |||||||||||||||||||||||||||||||||||||||
Hospital | Gentiva | ||||||||||||||||||||||||||||||||||||||
Retirement | and home | transaction | |||||||||||||||||||||||||||||||||||||
Before | and | health/hospice | Litigation | and | Other | As | |||||||||||||||||||||||||||||||||
charges | severance | closings | contingency | integration | transaction | Total | reported | ||||||||||||||||||||||||||||||||
Income (loss) from continuing operations: | |||||||||||||||||||||||||||||||||||||||
Operating income (loss) (EBITDAR): | |||||||||||||||||||||||||||||||||||||||
Hospital division | $ | 97,128 | $ | (666 | ) | $ | (479 | ) | $ | - | $ | - | $ | - | $ | (1,145 | ) | $ | 95,983 | ||||||||||||||||||||
Kindred at Home: | |||||||||||||||||||||||||||||||||||||||
Home health | 68,155 | - | (2,571 | ) | - | - | - | (2,571 | ) | 65,584 | |||||||||||||||||||||||||||||
Hospice | 34,025 | - | (318 | ) | - | - | - | (318 | ) | 33,707 | |||||||||||||||||||||||||||||
102,180 | - | (2,889 | ) | - | - | - | (2,889 | ) | 99,291 | ||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | |||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 42,141 | - | - | - | - | - | - | 42,141 | |||||||||||||||||||||||||||||||
RehabCare | 14,544 | - | - | - | - | - | - | 14,544 | |||||||||||||||||||||||||||||||
56,685 | - | - | - | - | - | - | 56,685 | ||||||||||||||||||||||||||||||||
Nursing center division | 35,923 | - | - | - | - | - | - | 35,923 | |||||||||||||||||||||||||||||||
Support center | (55,439 | ) | - | - | - | - | - | - | (55,439 | ) | |||||||||||||||||||||||||||||
Litigation contingency expense | - | - | - | (31,462 | ) | - | - | (31,462 | ) | (31,462 | ) | ||||||||||||||||||||||||||||
Transaction costs | - | - | - | - | (3,069 | ) | (777 | ) | (3,846 | ) | (3,846 | ) | |||||||||||||||||||||||||||
Operating income (EBITDAR) | 236,477 | (666 | ) | (3,368 | ) | (31,462 | ) | (3,069 | ) | (777 | ) | (39,342 | ) | 197,135 | |||||||||||||||||||||||||
Rent | (95,436 | ) | - | (808 | ) | - | - | - | (808 | ) | (96,244 | ) | |||||||||||||||||||||||||||
EBITDA | 141,041 | (666 | ) | (4,176 | ) | (31,462 | ) | (3,069 | ) | (777 | ) | (40,150 | ) | 100,891 | |||||||||||||||||||||||||
Depreciation and amortization | (39,329 | ) | - | - | - | - | - | - | (39,329 | ) | |||||||||||||||||||||||||||||
Interest, net | (56,008 | ) | - | - | - | - | - | - | (56,008 | ) | |||||||||||||||||||||||||||||
Income from continuing operations before income taxes |
45,704 | (666 | ) | (4,176 | ) | (31,462 | ) | (3,069 | ) | (777 | ) | (40,150 | ) | 5,554 | |||||||||||||||||||||||||
Provision for income taxes | 15,298 | (196 | ) | (1,225 | ) | (429 | ) | (697 | ) | (228 | ) | (2,775 | ) | 12,523 | |||||||||||||||||||||||||
30,406 | $ | (470 | ) | $ | (2,951 | ) | $ | (31,033 | ) | $ | (2,372 | ) | $ | (549 | ) | $ | (37,375 | ) | (6,969 | ) | |||||||||||||||||||
Noncontrolling interests | (9,900 | ) | (9,900 | ) | |||||||||||||||||||||||||||||||||||
Income (loss) attributable to Kindred | $ | 20,506 | $ | (16,869 | ) | ||||||||||||||||||||||||||||||||||
Diluted earnings (loss) per common share | $ | 0.23 | $ | (0.20 | ) | ||||||||||||||||||||||||||||||||||
Diluted shares used in computing earnings (loss) per common share |
86,892 | 86,184 | |||||||||||||||||||||||||||||||||||||
Three months ended September 30, 2014 | |||||||||||||||||||||||||||||||||||||||
Charges | |||||||||||||||||||||||||||||||||||||||
Severance | |||||||||||||||||||||||||||||||||||||||
Before | and other | Customer | Gentiva | Other | As | ||||||||||||||||||||||||||||||||||
charges | restructuring | bankruptcy | transaction | transaction | Total | reported | |||||||||||||||||||||||||||||||||
Income from continuing operations: | |||||||||||||||||||||||||||||||||||||||
Operating income (loss) (EBITDAR): | |||||||||||||||||||||||||||||||||||||||
Hospital division | $ | 117,604 | $ | (617 | ) | $ | - | $ | - | $ | - | $ | (617 | ) | $ | 116,987 | |||||||||||||||||||||||
Kindred at Home: | |||||||||||||||||||||||||||||||||||||||
Home health | 5,961 | (275 | ) | - | - | - | (275 | ) | 5,686 | ||||||||||||||||||||||||||||||
Hospice | 1,149 | (46 | ) | - | - | - | (46 | ) | 1,103 | ||||||||||||||||||||||||||||||
7,110 | (321 | ) | - | - | - | (321 | ) | 6,789 | |||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | |||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 24,887 | - | (1,857 | ) | - | - | (1,857 | ) | 23,030 | ||||||||||||||||||||||||||||||
RehabCare | 17,080 | 162 | - | - | - | 162 | 17,242 | ||||||||||||||||||||||||||||||||
41,967 | 162 | (1,857 | ) | - | - | (1,695 | ) | 40,272 | |||||||||||||||||||||||||||||||
Nursing center division | 35,920 | (483 | ) | - | - | - | (483 | ) | 35,437 | ||||||||||||||||||||||||||||||
Support center | (45,383 | ) | (427 | ) | - | - | - | (427 | ) | (45,810 | ) | ||||||||||||||||||||||||||||
Transaction costs | - | - | - | (3,200 | ) | (914 | ) | (4,114 | ) | (4,114 | ) | ||||||||||||||||||||||||||||
Operating income (EBITDAR) | 157,218 | (1,686 | ) | (1,857 | ) | (3,200 | ) | (914 | ) | (7,657 | ) | 149,561 | |||||||||||||||||||||||||||
Rent | (77,643 | ) | - | - | - | - | - | (77,643 | ) | ||||||||||||||||||||||||||||||
EBITDA | 79,575 | (1,686 | ) | (1,857 | ) | (3,200 | ) | (914 | ) | (7,657 | ) | 71,918 | |||||||||||||||||||||||||||
Depreciation and amortization | (38,748 | ) | - | - | - | - | - | (38,748 | ) | ||||||||||||||||||||||||||||||
Interest, net | (22,171 | ) | - | - | - | - | - | (22,171 | ) | ||||||||||||||||||||||||||||||
Income from continuing operations before income taxes |
18,656 | (1,686 | ) | (1,857 | ) | (3,200 | ) | (914 | ) | (7,657 | ) | 10,999 | |||||||||||||||||||||||||||
Provision for income taxes | 6,168 | (923 | ) | (1,017 | ) | (69 | ) | (382 | ) | (2,391 | ) | 3,777 | |||||||||||||||||||||||||||
12,488 | $ | (763 | ) | $ | (840 | ) | $ | (3,131 | ) | $ | (532 | ) | $ | (5,266 | ) | 7,222 | |||||||||||||||||||||||
Noncontrolling interests | (4,372 | ) | (4,372 | ) | |||||||||||||||||||||||||||||||||||
Income attributable to Kindred | $ | 8,116 | $ | 2,850 | |||||||||||||||||||||||||||||||||||
Diluted earnings per common share | $ | 0.13 | $ | 0.04 | |||||||||||||||||||||||||||||||||||
Diluted shares used in computing earnings per common share |
62,902 | 62,902 | |||||||||||||||||||||||||||||||||||||
KINDRED HEALTHCARE, INC. | |||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Non-GAAP Measurements to GAAP Results (Continued) | |||||||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Nine months ended September 30, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Charges | |||||||||||||||||||||||||||||||||||||||||||||||||||
Hospital | Development | Gentiva | Gentiva | ||||||||||||||||||||||||||||||||||||||||||||||||
Retirement | and home | project | pre-closing | transaction | |||||||||||||||||||||||||||||||||||||||||||||||
Before | and | health/hospice | cancellation | Litigation | Impairment | financing | and | Other | As | ||||||||||||||||||||||||||||||||||||||||||
charges | severance | closings | and other | contingency | charges | costs | integration | transaction | Total | reported | |||||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations: | |||||||||||||||||||||||||||||||||||||||||||||||||||
Operating income (loss) (EBITDAR): | |||||||||||||||||||||||||||||||||||||||||||||||||||
Hospital division | $ | 363,446 | $ | (666 | ) | $ | (1,044 | ) | $ | (675 | ) | $ | - | $ | - | $ | - | $ | - | $ | - | $ | (2,385 | ) | $ | 361,061 | |||||||||||||||||||||||||
Kindred at Home: | |||||||||||||||||||||||||||||||||||||||||||||||||||
Home health | 187,870 | - | (4,261 | ) | - | - | - | - | - | - | (4,261 | ) | 183,609 | ||||||||||||||||||||||||||||||||||||||
Hospice | 78,908 | - | (2,484 | ) | - | - | - | - | - | - | (2,484 | ) | 76,424 | ||||||||||||||||||||||||||||||||||||||
266,778 | - | (6,745 | ) | - | - | - | - | - | - | (6,745 | ) | 260,033 | |||||||||||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | |||||||||||||||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 131,236 | - | - | - | - | - | - | - | - | - | 131,236 | ||||||||||||||||||||||||||||||||||||||||
RehabCare | 45,718 | (785 | ) | - | - | - | - | - | - | - | (785 | ) | 44,933 | ||||||||||||||||||||||||||||||||||||||
176,954 | (785 | ) | - | - | - | - | - | - | - | (785 | ) | 176,169 | |||||||||||||||||||||||||||||||||||||||
Nursing center division | 113,347 | - | - | (584 | ) | - | - | - | - | - | (584 | ) | 112,763 | ||||||||||||||||||||||||||||||||||||||
Support center | (188,037 | ) | (4,176 | ) | - | - | - | - | - | - | - | (4,176 | ) | (192,213 | ) | ||||||||||||||||||||||||||||||||||||
Litigation contingency expense | - | - | - | - | (130,387 | ) | - | - | - | - | (130,387 | ) | (130,387 | ) | |||||||||||||||||||||||||||||||||||||
Transaction costs | - | - | - | - | - | - | (6,005 | ) | (94,009 | ) | (3,750 | ) | (103,764 | ) | (103,764 | ) | |||||||||||||||||||||||||||||||||||
Impairment charges | - | - | - | - | - | (6,726 | ) | - | - | - | (6,726 | ) | (6,726 | ) | |||||||||||||||||||||||||||||||||||||
Operating income (EBITDAR) | 732,488 | (5,627 | ) | (7,789 | ) | (1,259 | ) | (130,387 | ) | (6,726 | ) | (6,005 | ) | (94,009 | ) | (3,750 | ) | (255,552 | ) | 476,936 | |||||||||||||||||||||||||||||||
Rent | (282,163 | ) | - | (1,479 | ) | (352 | ) | - | - | - | (792 | ) | - | (2,623 | ) | (284,786 | ) | ||||||||||||||||||||||||||||||||||
EBITDA | 450,325 | (5,627 | ) | (9,268 | ) | (1,611 | ) | (130,387 | ) | (6,726 | ) | (6,005 | ) | (94,801 | ) | (3,750 | ) | (258,175 | ) | 192,150 | |||||||||||||||||||||||||||||||
Depreciation and amortization | (116,889 | ) | - | - | - | - | - | - | - | - | - | (116,889 | ) | ||||||||||||||||||||||||||||||||||||||
Interest, net | (156,494 | ) | - | - | - | - | - | (17,431 | ) | - | - | (17,431 | ) | (173,925 | ) | ||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes |
176,942 | (5,627 | ) | (9,268 | ) | (1,611 | ) | (130,387 | ) | (6,726 | ) | (23,436 | ) | (94,801 | ) | (3,750 | ) | (275,606 | ) | (98,664 | ) | ||||||||||||||||||||||||||||||
Provision for income taxes | 63,485 | (2,202 | ) | (3,627 | ) | (631 | ) | (2,108 | ) | (2,633 | ) | (9,173 | ) | (32,460 | ) | (1,468 | ) | (54,302 | ) | 9,183 | |||||||||||||||||||||||||||||||
113,457 | $ | (3,425 | ) | $ | (5,641 | ) | $ | (980 | ) | $ | (128,279 | ) | $ | (4,093 | ) | $ | (14,263 | ) | $ | (62,341 | ) | $ | (2,282 | ) | $ | (221,304 | ) | (107,847 | ) | ||||||||||||||||||||||
Noncontrolling interests | (30,482 | ) | (30,482 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) attributable to Kindred | $ | 82,975 | $ | (138,329 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Diluted earnings (loss) per common share | $ | 0.95 | $ | (1.65 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Diluted shares used in computing earnings (loss) per common share |
85,691 | 83,960 | |||||||||||||||||||||||||||||||||||||||||||||||||
Nine months ended September 30, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Charges | |||||||||||||||||||||||||||||||||||||||||||||||||||
Severance | |||||||||||||||||||||||||||||||||||||||||||||||||||
Before | and other | Customer | Litigation | Debt | Gentiva | Other | As | ||||||||||||||||||||||||||||||||||||||||||||
charges | restructuring | bankruptcy | contingency | refinancing | transaction | transaction | Total | reported | |||||||||||||||||||||||||||||||||||||||||||
Income from continuing operations: | |||||||||||||||||||||||||||||||||||||||||||||||||||
Operating income (loss) (EBITDAR): | |||||||||||||||||||||||||||||||||||||||||||||||||||
Hospital division | $ | 389,099 | $ | (617 | ) | $ | - | $ | - | $ | - | $ | - | $ | - | $ | (617 | ) | $ | 388,482 | |||||||||||||||||||||||||||||||
Kindred at Home: | |||||||||||||||||||||||||||||||||||||||||||||||||||
Home health | 14,575 | (996 | ) | - | - | - | - | - | (996 | ) | 13,579 | ||||||||||||||||||||||||||||||||||||||||
Hospice | 5,140 | (168 | ) | - | - | - | - | - | (168 | ) | 4,972 | ||||||||||||||||||||||||||||||||||||||||
19,715 | (1,164 | ) | - | - | - | - | - | (1,164 | ) | 18,551 | |||||||||||||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | |||||||||||||||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 76,339 | (170 | ) | (1,857 | ) | - | - | - | - | (2,027 | ) | 74,312 | |||||||||||||||||||||||||||||||||||||||
RehabCare | 54,959 | (14 | ) | - | - | - | - | - | (14 | ) | 54,945 | ||||||||||||||||||||||||||||||||||||||||
131,298 | (184 | ) | (1,857 | ) | - | - | - | - | (2,041 | ) | 129,257 | ||||||||||||||||||||||||||||||||||||||||
Nursing center division | 112,106 | (3,688 | ) | - | - | - | - | - | (3,688 | ) | 108,418 | ||||||||||||||||||||||||||||||||||||||||
Support center | (138,091 | ) | (983 | ) | - | - | - | - | - | (983 | ) | (139,074 | ) | ||||||||||||||||||||||||||||||||||||||
Litigation contingency expense | - | - | - | (4,600 | ) | (4,600 | ) | (4,600 | ) | ||||||||||||||||||||||||||||||||||||||||||
Transaction costs | - | - | - | - | - | (5,279 | ) | (4,014 | ) | (9,293 | ) | (9,293 | ) | ||||||||||||||||||||||||||||||||||||||
Operating income (EBITDAR) | 514,127 | (6,636 | ) | (1,857 | ) | (4,600 | ) | - | (5,279 | ) | (4,014 | ) | (22,386 | ) | 491,741 | ||||||||||||||||||||||||||||||||||||
Rent | (233,625 | ) | (247 | ) | - | - | - | - | - | (247 | ) | (233,872 | ) | ||||||||||||||||||||||||||||||||||||||
EBITDA | 280,502 | (6,883 | ) | (1,857 | ) | (4,600 | ) | - | (5,279 | ) | (4,014 | ) | (22,633 | ) | 257,869 | ||||||||||||||||||||||||||||||||||||
Depreciation and amortization | (117,012 | ) | - | - | - | - | - | - | - | (117,012 | ) | ||||||||||||||||||||||||||||||||||||||||
Interest, net | (69,226 | ) | - | - | - | (56,643 | ) | - | - | (56,643 | ) | (125,869 | ) | ||||||||||||||||||||||||||||||||||||||
Income from continuing operations before income taxes |
94,264 | (6,883 | ) | (1,857 | ) | (4,600 | ) | (56,643 | ) | (5,279 | ) | (4,014 | ) | (79,276 | ) | 14,988 | |||||||||||||||||||||||||||||||||||
Provision for income taxes | 34,225 | (2,700 | ) | (729 | ) | (1,805 | ) | (22,223 | ) | (49 | ) | (1,430 | ) | (28,936 | ) | 5,289 | |||||||||||||||||||||||||||||||||||
60,039 | $ | (4,183 | ) | $ | (1,128 | ) | $ | (2,795 | ) | $ | (34,420 | ) | $ | (5,230 | ) | $ | (2,584 | ) | $ | (50,340 | ) | 9,699 | |||||||||||||||||||||||||||||
Noncontrolling interests | (13,729 | ) | (13,729 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) attributable to Kindred | $ | 46,310 | $ | (4,030 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Diluted earnings (loss) per common share | $ | 0.80 | $ | (0.07 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
Diluted shares used in computing earnings (loss) per common share |
56,506 | 56,443 | |||||||||||||||||||||||||||||||||||||||||||||||||
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Non-GAAP Measurements to GAAP Results (Continued) | ||||||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Three months ended March 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Charges | ||||||||||||||||||||||||||||||||||||||||||||||||||
Home health | Development | Gentiva | Gentiva | |||||||||||||||||||||||||||||||||||||||||||||||
Retirement | and | project | pre-closing | transaction | ||||||||||||||||||||||||||||||||||||||||||||||
Before | and | hospice | cancellation | Litigation | Impairment | financing | and | Other | As | |||||||||||||||||||||||||||||||||||||||||
charges | severance | closings | and other | contingency | charges | costs | integration | transaction | Total | reported | ||||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Operating income (loss) (EBITDAR): | ||||||||||||||||||||||||||||||||||||||||||||||||||
Hospital division | $ | 134,786 | $ | - | $ | - | $ | (675 | ) | $ | - | $ | - | $ | - | $ | - | $ | - | $ | (675 | ) | $ | 134,111 | ||||||||||||||||||||||||||
Kindred at Home: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Home health | 46,798 | - | (1,102 | ) | - | - | - | - | - | - | (1,102 | ) | 45,696 | |||||||||||||||||||||||||||||||||||||
Hospice | 16,996 | - | (517 | ) | - | - | - | - | - | - | (517 | ) | 16,479 | |||||||||||||||||||||||||||||||||||||
63,794 | - | (1,619 | ) | - | - | - | - | - | - | (1,619 | ) | 62,175 | ||||||||||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 44,564 | - | - | - | - | - | - | - | - | - | 44,564 | |||||||||||||||||||||||||||||||||||||||
RehabCare | 16,493 | (785 | ) | - | - | - | - | - | - | - | (785 | ) | 15,708 | |||||||||||||||||||||||||||||||||||||
61,057 | (785 | ) | - | - | - | - | - | - | - | (785 | ) | 60,272 | ||||||||||||||||||||||||||||||||||||||
Nursing center division | 36,963 | - | - | - | - | - | - | - | - | - | 36,963 | |||||||||||||||||||||||||||||||||||||||
Support center | (62,389 | ) | (4,176 | ) | - | - | - | - | - | - | - | (4,176 | ) | (66,565 | ) | |||||||||||||||||||||||||||||||||||
Litigation contingency expense | - | - | - | - | (95,000 | ) | - | - | - | - | (95,000 | ) | (95,000 | ) | ||||||||||||||||||||||||||||||||||||
Transaction costs | - | - | - | - | - | - | (6,005 | ) | (86,598 | ) | (2,099 | ) | (94,702 | ) | (94,702 | ) | ||||||||||||||||||||||||||||||||||
Impairment charges | - | - | - | - | - | (6,726 | ) | - | - | - | (6,726 | ) | (6,726 | ) | ||||||||||||||||||||||||||||||||||||
Operating income (EBITDAR) | 234,211 | (4,961 | ) | (1,619 | ) | (675 | ) | (95,000 | ) | (6,726 | ) | (6,005 | ) | (86,598 | ) | (2,099 | ) | (203,683 | ) | 30,528 | ||||||||||||||||||||||||||||||
Rent | (91,199 | ) | - | - | (352 | ) | - | - | - | (589 | ) | - | (941 | ) | (92,140 | ) | ||||||||||||||||||||||||||||||||||
EBITDA | 143,012 | (4,961 | ) | (1,619 | ) | (1,027 | ) | (95,000 | ) | (6,726 | ) | (6,005 | ) | (87,187 | ) | (2,099 | ) | (204,624 | ) | (61,612 | ) | |||||||||||||||||||||||||||||
Depreciation and amortization | (38,935 | ) | - | - | - | - | - | - | - | - | - | (38,935 | ) | |||||||||||||||||||||||||||||||||||||
Interest, net | (44,346 | ) | - | - | - | - | - | (17,431 | ) | - | - | (17,431 | ) | (61,777 | ) | |||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes |
59,731 | (4,961 | ) | (1,619 | ) | (1,027 | ) | (95,000 | ) | (6,726 | ) | (23,436 | ) | (87,187 | ) | (2,099 | ) | (222,055 | ) | (162,324 | ) | |||||||||||||||||||||||||||||
Provision (benefit) for income taxes | 22,466 | (2,133 | ) | (696 | ) | (442 | ) | - | (2,891 | ) | (10,075 | ) | (33,063 | ) | (902 | ) | (50,202 | ) | (27,736 | ) | ||||||||||||||||||||||||||||||
37,265 | $ | (2,828 | ) | $ | (923 | ) | $ | (585 | ) | $ | (95,000 | ) | $ | (3,835 | ) | $ | (13,361 | ) | $ | (54,124 | ) | $ | (1,197 | ) | $ | (171,853 | ) | (134,588 | ) | |||||||||||||||||||||
Noncontrolling interests | (8,847 | ) | (8,847 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) attributable to Kindred | $ | 28,418 | $ | (143,435 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Diluted earnings (loss) per common share | $ | 0.34 | $ | (1.80 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Diluted shares used in computing earnings (loss) per common share |
82,422 | 79,575 | ||||||||||||||||||||||||||||||||||||||||||||||||
Three months ended March 31, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Charges | ||||||||||||||||||||||||||||||||||||||||||||||||||
Before | Transaction | As | ||||||||||||||||||||||||||||||||||||||||||||||||
charges | costs | reported | ||||||||||||||||||||||||||||||||||||||||||||||||
Income from continuing operations: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Operating income (loss) (EBITDAR): | ||||||||||||||||||||||||||||||||||||||||||||||||||
Hospital division | $ | 139,505 | $ | - | $ | 139,505 | ||||||||||||||||||||||||||||||||||||||||||||
Kindred at Home: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Home health | 2,845 | - | 2,845 | |||||||||||||||||||||||||||||||||||||||||||||||
Hospice | 1,852 | - | 1,852 | |||||||||||||||||||||||||||||||||||||||||||||||
4,697 | - | 4,697 | ||||||||||||||||||||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 25,710 | - | 25,710 | |||||||||||||||||||||||||||||||||||||||||||||||
RehabCare | 18,016 | - | 18,016 | |||||||||||||||||||||||||||||||||||||||||||||||
43,726 | - | 43,726 | ||||||||||||||||||||||||||||||||||||||||||||||||
Nursing center division | 37,572 | - | 37,572 | |||||||||||||||||||||||||||||||||||||||||||||||
Support center | (44,456 | ) | - | (44,456 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Transaction costs | - | (683 | ) | (683 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Operating income (EBITDAR) | 181,044 | (683 | ) | 180,361 | ||||||||||||||||||||||||||||||||||||||||||||||
Rent | (78,530 | ) | - | (78,530 | ) | |||||||||||||||||||||||||||||||||||||||||||||
EBITDA | 102,514 | (683 | ) | 101,831 | ||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | (39,092 | ) | - | (39,092 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Interest, net | (25,617 | ) | - | (25,617 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Income from continuing operations before income taxes |
37,805 | (683 | ) | 37,122 | ||||||||||||||||||||||||||||||||||||||||||||||
Provision for income taxes | 14,445 | (250 | ) | 14,195 | ||||||||||||||||||||||||||||||||||||||||||||||
23,360 | $ | (433 | ) | 22,927 | ||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interests | (4,529 | ) | (4,529 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Income attributable to Kindred | $ | 18,831 | $ | 18,398 | ||||||||||||||||||||||||||||||||||||||||||||||
Diluted earnings per common share | $ | 0.35 | $ | 0.34 | ||||||||||||||||||||||||||||||||||||||||||||||
Diluted shares used in computing earnings per common share |
52,711 | 52,711 | ||||||||||||||||||||||||||||||||||||||||||||||||
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||||||
Reconciliation of Non-GAAP Measurements to GAAP Results (Continued) | ||||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||||||||||||||||||||
Three months ended June 30, 2015 | ||||||||||||||||||||||||||||||||||||||
Charges | ||||||||||||||||||||||||||||||||||||||
Hospital | Development | Gentiva | ||||||||||||||||||||||||||||||||||||
and home | project | transaction | ||||||||||||||||||||||||||||||||||||
Before | health/hospice | cancellation | Litigation | and | Other | As | ||||||||||||||||||||||||||||||||
charges | closings | and other | contingency | integration | transaction | Total | reported | |||||||||||||||||||||||||||||||
Income from continuing operations: | ||||||||||||||||||||||||||||||||||||||
Operating income (loss) (EBITDAR): | ||||||||||||||||||||||||||||||||||||||
Hospital division | $ | 131,532 | $ | (565 | ) | $ | - | $ | - | $ | - | $ | - | $ | (565 | ) | $ | 130,967 | ||||||||||||||||||||
Kindred at Home: | ||||||||||||||||||||||||||||||||||||||
Home health | 72,917 | (588 | ) | - | - | - | - | (588 | ) | 72,329 | ||||||||||||||||||||||||||||
Hospice | 27,887 | (1,649 | ) | - | - | - | - | (1,649 | ) | 26,238 | ||||||||||||||||||||||||||||
100,804 | (2,237 | ) | - | - | - | - | (2,237 | ) | 98,567 | |||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | ||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 44,531 | - | - | - | - | - | - | 44,531 | ||||||||||||||||||||||||||||||
RehabCare | 14,681 | - | - | - | - | - | - | 14,681 | ||||||||||||||||||||||||||||||
59,212 | - | - | - | - | - | - | 59,212 | |||||||||||||||||||||||||||||||
Nursing center division | 40,461 | - | (584 | ) | - | - | - | (584 | ) | 39,877 | ||||||||||||||||||||||||||||
Support center | (70,209 | ) | - | - | - | - | - | - | (70,209 | ) | ||||||||||||||||||||||||||||
Litigation contingency expense | - | - | - | (3,925 | ) | - | - | (3,925 | ) | (3,925 | ) | |||||||||||||||||||||||||||
Transaction costs | - | - | - | - | (4,342 | ) | (874 | ) | (5,216 | ) | (5,216 | ) | ||||||||||||||||||||||||||
Operating income (EBITDAR) | 261,800 | (2,802 | ) | (584 | ) | (3,925 | ) | (4,342 | ) | (874 | ) | (12,527 | ) | 249,273 | ||||||||||||||||||||||||
Rent | (95,528 | ) | (671 | ) | - | - | (203 | ) | - | (874 | ) | (96,402 | ) | |||||||||||||||||||||||||
EBITDA | 166,272 | (3,473 | ) | (584 | ) | (3,925 | ) | (4,545 | ) | (874 | ) | (13,401 | ) | 152,871 | ||||||||||||||||||||||||
Depreciation and amortization | (38,625 | ) | - | - | - | - | - | - | (38,625 | ) | ||||||||||||||||||||||||||||
Interest, net | (56,140 | ) | - | - | - | - | - | - | (56,140 | ) | ||||||||||||||||||||||||||||
Income from continuing operations before income taxes |
71,507 | (3,473 | ) | (584 | ) | (3,925 | ) | (4,545 | ) | (874 | ) | (13,401 | ) | 58,106 | ||||||||||||||||||||||||
Provision for income taxes | 25,721 | (368 | ) | (62 | ) | (416 | ) | (386 | ) | (93 | ) | (1,325 | ) | 24,396 | ||||||||||||||||||||||||
45,786 | $ | (3,105 | ) | $ | (522 | ) | $ | (3,509 | ) | $ | (4,159 | ) | $ | (781 | ) | $ | (12,076 | ) | 33,710 | |||||||||||||||||||
Noncontrolling interests | (11,735 | ) | (11,735 | ) | ||||||||||||||||||||||||||||||||||
Income attributable to Kindred | $ | 34,051 | $ | 21,975 | ||||||||||||||||||||||||||||||||||
Diluted earnings per common share | $ | 0.39 | $ | 0.25 | ||||||||||||||||||||||||||||||||||
Diluted shares used in computing earnings per common share |
86,402 | 86,402 | ||||||||||||||||||||||||||||||||||||
Three months ended June 30, 2014 | ||||||||||||||||||||||||||||||||||||||
Charges | ||||||||||||||||||||||||||||||||||||||
Severance | ||||||||||||||||||||||||||||||||||||||
Before | and other | Litigation | Debt | Gentiva | Other | As | ||||||||||||||||||||||||||||||||
charges | restructuring | contingency | refinancing | transaction | transaction | Total | reported | |||||||||||||||||||||||||||||||
Income (loss) from continuing operations: | ||||||||||||||||||||||||||||||||||||||
Operating income (loss) (EBITDAR): | ||||||||||||||||||||||||||||||||||||||
Hospital division | $ | 131,990 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 131,990 | ||||||||||||||||||||||
Kindred at Home: | ||||||||||||||||||||||||||||||||||||||
Home health | 5,769 | (721 | ) | - | - | - | - | (721 | ) | 5,048 | ||||||||||||||||||||||||||||
Hospice | 2,139 | (122 | ) | - | - | - | - | (122 | ) | 2,017 | ||||||||||||||||||||||||||||
7,908 | (843 | ) | - | - | - | - | (843 | ) | 7,065 | |||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | ||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 25,742 | (170 | ) | - | - | - | - | (170 | ) | 25,572 | ||||||||||||||||||||||||||||
RehabCare | 19,863 | (176 | ) | - | - | - | - | (176 | ) | 19,687 | ||||||||||||||||||||||||||||
45,605 | (346 | ) | - | - | - | - | (346 | ) | 45,259 | |||||||||||||||||||||||||||||
Nursing center division | 38,614 | (3,205 | ) | - | - | - | - | (3,205 | ) | 35,409 | ||||||||||||||||||||||||||||
Support center | (48,252 | ) | (556 | ) | - | - | - | - | (556 | ) | (48,808 | ) | ||||||||||||||||||||||||||
Litigation contingency expense | - | - | (4,600 | ) | - | - | - | (4,600 | ) | (4,600 | ) | |||||||||||||||||||||||||||
Transaction costs | - | - | - | - | (2,079 | ) | (2,417 | ) | (4,496 | ) | (4,496 | ) | ||||||||||||||||||||||||||
Operating income (EBITDAR) | 175,865 | (4,950 | ) | (4,600 | ) | - | (2,079 | ) | (2,417 | ) | (14,046 | ) | 161,819 | |||||||||||||||||||||||||
Rent | (77,452 | ) | (247 | ) | - | - | - | - | (247 | ) | (77,699 | ) | ||||||||||||||||||||||||||
EBITDA | 98,413 | (5,197 | ) | (4,600 | ) | - | (2,079 | ) | (2,417 | ) | (14,293 | ) | 84,120 | |||||||||||||||||||||||||
Depreciation and amortization | (39,172 | ) | - | - | - | - | - | - | (39,172 | ) | ||||||||||||||||||||||||||||
Interest, net | (21,438 | ) | - | - | (56,643 | ) | - | - | (56,643 | ) | (78,081 | ) | ||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes |
37,803 | (5,197 | ) | (4,600 | ) | (56,643 | ) | (2,079 | ) | (2,417 | ) | (70,936 | ) | (33,133 | ) | |||||||||||||||||||||||
Provision (benefit) for income taxes | 13,612 | (1,985 | ) | (1,757 | ) | (21,639 | ) | - | (914 | ) | (26,295 | ) | (12,683 | ) | ||||||||||||||||||||||||
24,191 | $ | (3,212 | ) | $ | (2,843 | ) | $ | (35,004 | ) | $ | (2,079 | ) | $ | (1,503 | ) | $ | (44,641 | ) | (20,450 | ) | ||||||||||||||||||
Noncontrolling interests | (4,828 | ) | (4,828 | ) | ||||||||||||||||||||||||||||||||||
Income (loss) attributable to Kindred | $ | 19,363 | $ | (25,278 | ) | |||||||||||||||||||||||||||||||||
Diluted earnings (loss) per common share | $ | 0.35 | $ | (0.47 | ) | |||||||||||||||||||||||||||||||||
Diluted shares used in computing earnings (loss) per common share |
53,792 | 53,714 | ||||||||||||||||||||||||||||||||||||
KINDRED HEALTHCARE, INC. | |||||||||||||||||||||||||||||||||||||||
Reconciliation of Non-GAAP Measurements to GAAP Results (Continued) | |||||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||||||||||||||||||||||
Three months ended December 31, 2014 | |||||||||||||||||||||||||||||||||||||||
Charges | |||||||||||||||||||||||||||||||||||||||
Severance | LTAC | Gentiva | |||||||||||||||||||||||||||||||||||||
Before | and other | criteria | pre-closing | Gentiva | Other | As | |||||||||||||||||||||||||||||||||
charges | restructuring | consulting | financing | transaction | transaction | Total | reported | ||||||||||||||||||||||||||||||||
Income (loss) from continuing operations: | |||||||||||||||||||||||||||||||||||||||
Operating income (loss) (EBITDAR): | |||||||||||||||||||||||||||||||||||||||
Hospital division | $ | 134,791 | $ | (318 | ) | $ | - | $ | - | $ | - | $ | - | $ | (318 | ) | $ | 134,473 | |||||||||||||||||||||
Kindred at Home: | |||||||||||||||||||||||||||||||||||||||
Home health | 7,398 | (828 | ) | - | - | - | - | (828 | ) | 6,570 | |||||||||||||||||||||||||||||
Hospice | 524 | (106 | ) | - | - | - | - | (106 | ) | 418 | |||||||||||||||||||||||||||||
7,922 | (934 | ) | - | - | - | - | (934 | ) | 6,988 | ||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | |||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 23,884 | - | - | - | - | - | - | 23,884 | |||||||||||||||||||||||||||||||
RehabCare | 16,029 | - | - | - | - | - | - | 16,029 | |||||||||||||||||||||||||||||||
39,913 | - | - | - | - | - | - | 39,913 | ||||||||||||||||||||||||||||||||
Nursing center division | 38,810 | (500 | ) | - | - | - | - | (500 | ) | 38,310 | |||||||||||||||||||||||||||||
Support center | (51,348 | ) | (10,193 | ) | (2,460 | ) | - | - | - | (12,653 | ) | (64,001 | ) | ||||||||||||||||||||||||||
Transaction costs | - | - | - | - | (5,545 | ) | (3,145 | ) | (8,690 | ) | (8,690 | ) | |||||||||||||||||||||||||||
Operating income (EBITDAR) | 170,088 | (11,945 | ) | (2,460 | ) | - | (5,545 | ) | (3,145 | ) | (23,095 | ) | 146,993 | ||||||||||||||||||||||||||
Rent | (79,167 | ) | - | - | - | - | - | - | (79,167 | ) | |||||||||||||||||||||||||||||
EBITDA | 90,921 | (11,945 | ) | (2,460 | ) | - | (5,545 | ) | (3,145 | ) | (23,095 | ) | 67,826 | ||||||||||||||||||||||||||
Depreciation and amortization | (38,558 | ) | - | - | - | - | - | - | (38,558 | ) | |||||||||||||||||||||||||||||
Interest, net | (21,857 | ) | - | - | (17,041 | ) | - | - | (17,041 | ) | (38,898 | ) | |||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes |
30,506 | (11,945 | ) | (2,460 | ) | (17,041 | ) | (5,545 | ) | (3,145 | ) | (40,136 | ) | (9,630 | ) | ||||||||||||||||||||||||
Provision (benefit) for income taxes | 8,471 | (4,251 | ) | (875 | ) | (5,975 | ) | (1,514 | ) | (683 | ) | (13,298 | ) | (4,827 | ) | ||||||||||||||||||||||||
22,035 | $ | (7,694 | ) | $ | (1,585 | ) | $ | (11,066 | ) | $ | (4,031 | ) | $ | (2,462 | ) | $ | (26,838 | ) | (4,803 | ) | |||||||||||||||||||
Noncontrolling interests | (5,143 | ) | (5,143 | ) | |||||||||||||||||||||||||||||||||||
Income (loss) attributable to Kindred | $ | 16,892 | $ | (9,946 | ) | ||||||||||||||||||||||||||||||||||
Diluted earnings (loss) per common share | $ | 0.26 | $ | (0.15 | ) | ||||||||||||||||||||||||||||||||||
Diluted shares used in computing earnings (loss) per common share |
63,163 | 65,135 | |||||||||||||||||||||||||||||||||||||
KINDRED HEALTHCARE, INC. | |||||||||||||||||||||||||
Reconciliation of Non-GAAP Measurements to GAAP Results (Continued) | |||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
The Company recognizes that operating cash flows and free cash flows excluding certain items, which the Company refers to as core operating cash flows and core free cash flows, are non-GAAP measurements and are not intended to replace the presentation of the Company's cash flows in accordance with GAAP. The Company believes that these non-GAAP measurements provide important information to investors related to the amount of discretionary cash flows that are available for other investing and financing activities. In addition, management uses operating cash flows and free cash flows excluding certain items in making decisions related to acquisitions, development capital expenditures, dividends, long-term debt repayments and other uses. | |||||||||||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||||
Reconciliation of net cash flows provided by operating activities to free cash flows: | |||||||||||||||||||||||||
Net cash flows provided by operating activities | $ | 132,290 | $ | 90,039 | $ | 93,067 | $ | 24,322 | |||||||||||||||||
Adjustments to remove certain payments (including payments made for discontinued operations) included in net cash flows provided by operating activities: |
|||||||||||||||||||||||||
Transaction, severance, retirement and retention | 5,251 | 5,836 | 102,100 | 15,390 | |||||||||||||||||||||
Ventas, Inc. lease termination fee | - | - | 40,000 | - | |||||||||||||||||||||
Capitalized lender fees related to debt refinancing | - | - | 28,012 | 19,125 | |||||||||||||||||||||
Other debt refinancing costs (expensed) | 13,438 | - | 40,439 | 40,373 | |||||||||||||||||||||
Other lease termination fees | - | - | 353 | - | |||||||||||||||||||||
Litigation | - | - | 16,575 | 25,850 | |||||||||||||||||||||
18,689 | 5,836 | 227,479 | 100,738 | ||||||||||||||||||||||
Net cash flows provided by operating activities excluding certain items before income tax benefit of certain payments |
150,979 | 95,875 | 320,546 | 125,060 | |||||||||||||||||||||
Benefit of reduced income tax payments resulting from certain payments | (22,541 | ) | (8,253 | ) | (56,295 | ) | (22,857 | ) | |||||||||||||||||
Net cash flows provided by operating activities excluding certain items (core operating cash flows) (a) |
128,438 | 87,622 | 264,251 | 102,203 | |||||||||||||||||||||
Less routine capital expenditures | (35,422 | ) | (21,263 | ) | (80,691 | ) | (67,425 | ) | |||||||||||||||||
Free cash flows excluding certain items (core free cash flows) | $ | 93,016 | $ | 66,359 | $ | 183,560 | $ | 34,778 | |||||||||||||||||
(a) |
Includes $29 million of federal income tax refunds received in the third quarter of 2015 and $26 million of federal income tax refunds for the nine months ended September 30, 2014. The Company made no federal income tax payments for the nine months ended September 30, 2015 or 2014. |
||||||||||||||||||||||||