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Article Excerpt
-- $0.66 Earnings Per Diluted Share from Continuing Operations
-- PA and NJ Provider Tax Benefits Recognized
-- Convertible Note Offering Completed; Cash Redeployed to Purchase Portion of 8% Notes
KENNETT SQUARE, Pa., May 2 /PRNewswire-FirstCall/ -- Genesis HealthCare Corporation ("GHC") today announced income from continuing operations of $13.6 million, or $0.66 per diluted share, and net income of $13.5 million, or $0.65 per diluted share, for the quarter ended March 31, 2005, up from income from continuing operations of $6.2 million, or $0.31 per diluted share, and net income of $5.6 million, or $0.28 per diluted share, in the comparable period in the prior year.
Income from continuing operations was $24.0 million, or $1.16 per diluted share, and net income was $24.3 million, or $1.18 per diluted share, for the six months ended March 31, 2005, up from pro forma income from continuing operations of $12.4 million, or $0.62 per diluted share, and pro forma net income of $10.4 million, or $0.52 per diluted share, in the comparable period in the prior year. Pro forma results in the prior year period assume the December 1, 2003 spin-off of GHC from NeighborCare, Inc. occurred on October 1, 2003. (See attached pro forma financial information on page 13).
Revenue for the quarter and six months ended March 31, 2005 grew 20.0% to $454.6 million from $378.7 million and 14.6% to $853.6 million from $745.0 million, respectively, principally due to the impact of the provider assessments described below.
EBITDA for the quarter ended March 31, 2005 grew 41.1% to $40.5 million, up from $28.7 million of EBITDA for the comparable period in the prior year. (See attached reconciliation on page 8). EBITDA in the quarter ended March 31, 2005 benefited from the provider assessments described below and was reduced by $4.3 million, or $0.12 per diluted share, for charges related to the early extinguishment of debt. EBITDA in the quarter ended March 31, 2004 was reduced by $0.7 million, or $0.02 per diluted share, also for charges related to the early extinguishment of debt.
EBITDA for the six months ended March 31, 2005 grew 28.8% to $74.4 million, up from $57.8 million of EBITDA for the comparable period in the prior year. (See attached reconciliation on page 8). EBITDA in the six months ended March 31, 2005 also benefited from the provider assessments described below and was reduced by $4.8 million, or $0.14 per diluted share, for charges related to the early extinguishment of debt. EBITDA in the six months ended March 31, 2004 was reduced by $0.8 million, or $0.03 per diluted share, also for charges related to the early extinguishment of debt.
In the quarter ended March 31, 2005, GHC recognized the net benefit of Pennsylvania and New Jersey provider tax assessments. Provider assessments generate additional matching funds to state Medicaid programs. These plans usually take the form of a bed tax imposed uniformly across classes of providers within the state. In turn, the state utilizes the additional federal matching funds generated by the tax to pay increased reimbursement rates to providers for serving Medicaid patients. The Pennsylvania assessment is retroactive 21 months to July 1, 2003, and cumulatively through March 31, 2005 resulted in revenue of $42.0 million, EBITDA of $6.1 million and net income of $3.7 million, or $0.18 per diluted share. The New Jersey assessment is retroactive nine months to July 1, 2004, and cumulatively through March 31, 2005 resulted in revenue of $12.8 million, EBITDA of $3.0 million and net income of $1.8 million, or $0.09 per diluted share. The following table details the periods to which the benefits relate:
Pennsylvania Provider Tax Assessment Six Three months months Fiscal ended ended 2004 & March 31, March 31, ($ in Millions except EPS) Total Prior 2005 2005 Revenue $42.0 $30.9 $11.0 $5.6 Expense 35.8 25.5 10.3 5.2 EBITDA 6.1 5.4 0.7 0.4 Pre Tax Income 6.1 5.4 0.7 0.4 Net Income 3.7 3.3 0.4 0.2 EPS $0.18 $0.16 $0.02 $0.01 New Jersey Provider Tax Assessment Six Three months months Fiscal ended ended 2004 & March 31, March 31, ($ in Millions except EPS) Total Prior 2005 2005 Revenue $12.8 $4.3 $8.5 $4.1 Expense 9.8 3.3 6.5 3.2 EBITDA 3.0 1.0 2.0 1.0 Pre Tax Income 3.0 1.0 2.0 1.0 Net Income 1.8 0.6 1.2 0.6 EPS $0.09 $0.03 $0.06 $0.03 Note: Tables...
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