LAKE FOREST, Calif., July 30 /PRNewswire-FirstCall/ -- Apria Healthcare Group Inc. , the nation’s leading home healthcare company, today announced its financial results for the quarter ended June 30, 2004. Revenues were $359.6 million, a 5% increase over revenues of $343.3 million for the second quarter of 2003. Net income for the second quarter was $29.1 million or $.57 per share (diluted) compared to $29.4 million or $.53 per share for the second quarter of 2003. Revenues and net income in 2004 have been driven by growth in Apria’s respiratory therapy product line which, compared to the prior year second quarter, grew 6.8%. The company’s overall revenue growth rate was impacted by $17.5 million or 5% due to the 2004 Medicare respiratory medication reimbursement cuts and the company’s decision not to renew the Gentiva CareCentrix Inc. business.
Earnings before interest, taxes, depreciation and amortization (EBITDA) was $89.0 million for the second quarter of 2004 compared to $85.8 million for the second quarter of 2003. EBITDA is presented as a supplemental performance measure and is not meant to be considered as an alternative to net income or cash flows from operating activities or any other measure calculated in accordance with generally accepted accounting principles. Further, EBITDA may not be comparable to similarly titled measures used by other companies. A table reconciling EBITDA to net income is presented at the bottom of the condensed consolidated statements of income included in this release.
Days sales outstanding were 53 days for the second quarter of 2004, up one day from the prior year quarter. The increase can be attributed to the recent acquisition activity and the resulting delays that we experience as we convert patients onto our systems and apply for provider numbers. Operating cash flows for the six months ended June 30, 2004 were $137.8 million, compared to $135.6 million for the same period last year.
“We continue to be pleased with our financial results,” said Lawrence M. Higby, Apria’s Chief Executive Officer. “The second quarter results reflect our ability to overcome adverse issues such as the 2004 Medicare reimbursement cuts and the phasing out of the Gentiva CareCentrix Inc. business. We continue to manage our expenses through a number of productivity initiatives. Selling, distribution and administrative costs were reduced to 54.1% of sales in the second quarter from 54.6% in the prior year quarter. Further, our consistently strong operating cash flows afford us the ability to pursue growth, both internally and through acquisitions.”
“During the second quarter of 2004, we closed an unprecedented number of acquisitions. We purchased 14 businesses for approximately $67 million. Along with the 7 businesses we purchased for approximately $42 million in the first quarter, we’re well on our way to achieving our revised full year target of $130 million. For 2004, we expect revenue to grow in the 5-6 percent range due to the expansion of our respiratory business and recent acquisitions. Earnings per share should grow in the 7 to 9 percent range for the year, consistent with our prior forecast.”
Apria provides home respiratory therapy, home infusion therapy and home medical equipment through approximately 455 branches serving patients in 50 states. With more than $1.4 billion in annual revenues, it is the nation’s leading homecare company.
This release may contain statements regarding anticipated future developments that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Results may differ materially as a result of the risk factors included in the company’s filings with the Securities and Exchange Commission and other factors over which the company has no control.
For further information please contact: Lawrence M. Higby, Chief Executive Officer, +1-949-639-4960, or Amin I. Khalifa, Chief Financial Officer, +1-949-639-4990, both of Apria Healthcare Group Inc.
APRIA HEALTHCARE GROUP INC. CONDENSED CONSOLIDATED BALANCE SHEETS June 30, December 31, (dollars in thousands) 2004 2003 (unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $58,006 $160,553 Accounts receivable, net of allowance for doubtful accounts 213,736 196,413 Inventories, net 34,740 29,089 Other current assets 42,021 43,280 TOTAL CURRENT ASSETS 348,503 429,335 PATIENT SERVICE EQUIPMENT, NET 229,656 209,551 PROPERTY, EQUIPMENT & IMPROVEMENTS, NET 49,637 50,192 OTHER ASSETS, NET 445,539 354,357 TOTAL ASSETS $1,073,335 $1,043,435 LIABILITIES & STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable and accrued liabilities $171,999 $158,574 Current portion of long-term debt 31,177 31,522 TOTAL CURRENT LIABILITIES 203,176 190,096 LONG-TERM DEBT, net of current portion 454,348 469,241 OTHER NON-CURRENT LIABILITIES 29,766 18,150 TOTAL LIABILITIES 687,290 677,487 STOCKHOLDERS’ EQUITY 386,045 365,948 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $1,073,335 $1,043,435 APRIA HEALTHCARE GROUP INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) Three Months Ended Six Months Ended (dollars in thousands, June 30, June 30, except per share data) 2004 2003 2004 2003 Respiratory therapy $246,691 $231,054 $489,077 $455,268 Infusion therapy 60,424 61,031 119,112 119,834 Home medical equipment/other 52,447 51,199 102,254 103,251 NET REVENUES 359,562 343,284 710,443 678,353 GROSS PROFIT 260,642 251,444 512,602 494,352 Provision for doubtful accounts 12,811 12,915 26,280 25,716 Selling, distribution and administrative expenses 194,537 187,515 381,877 368,487 Amortization of intangible assets 1,509 715 2,785 1,411 OPERATING INCOME 51,785 50,299 101,660 98,738 Interest expense, net 4,954 2,860 9,909 6,341 INCOME BEFORE TAXES 46,831 47,439 91,751 92,397 Income tax expense 17,772 18,027 34,845 35,159 NET INCOME $29,059 $29,412 $56,906 $57,238 Income per common share - assuming dilution $0.57 $0.53 $1.12 $1.03 Weighted average number of common shares outstanding 50,675 55,453 50,758 55,423 Reconciliation - EBITDA: Reported net income $29,059 $29,412 $56,906 $57,238 Add back: Interest expense, net 4,954 2,860 9,909 6,341 Add back: Income tax expense 17,772 18,027 34,845 35,159 Add back: Depreciation 35,728 34,742 70,476 65,994 Add back: Amortization of intangible assets 1,509 715 2,785 1,411 EBITDA $89,022 $85,756 $174,921 $166,143 APRIA HEALTHCARE GROUP INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) Six Months Ended June 30, (dollars in thousands) 2004 2003 OPERATING ACTIVITIES Net income $56,906 $57,238 Items included in net income not requiring cash: Provision for doubtful accounts 26,280 25,716 Depreciation and amortization 73,261 67,405 Deferred income taxes and other 13,537 10,828 Changes in operating assets and liabilities, exclusive of effects of acquisitions (32,186) (25,597) NET CASH PROVIDED BY OPERATING ACTIVITIES 137,798 135,590 INVESTING ACTIVITIES Purchases of patient service equipment and property, equipment and improvements, exclusive of effects of acquisitions (77,801) (81,072) Proceeds from disposition of assets 79 349 Cash paid for acquisitions, including payments of deferred consideration (100,052) (42,522) NET CASH USED IN INVESTING ACTIVITIES (177,774) (123,245) FINANCING ACTIVITIES Net payments on debt (16,767) (7,738) Capitalized debt issuance costs (37) -- Outstanding checks included in accounts payable (4,353) (4,206) Repurchases of common stock, net (41,414) (2,351) NET CASH USED IN FINANCING ACTIVITIES (62,571) (14,295) NET DECREASE IN CASH AND CASH EQUIVALENTS (102,547) (1,950) Cash and cash equivalents at beginning of year 160,553 26,383 CASH AND CASH EQUIVALENTS AT END OF PERIOD $58,006 $24,433
Apria Healthcare Group Inc.
CONTACT: Lawrence M. Higby, Chief Executive Officer, +1-949-639-4960, orAmin I. Khalifa, Chief Financial Officer, +1-949-639-4990, both of ApriaHealthcare Group Inc.
Web site: http://www.apria.com/
