CLEARWATER, Fla., Feb. 7 /PRNewswire-FirstCall/ -- Lincare Holdings Inc. , a leading provider of oxygen and other respiratory therapy services delivered to patients in the home, today announced financial results for the year ended December 31, 2004.
Revenues for the year ended December 31, 2004, were $1.269 billion, an 11% increase over revenues of $1.147 billion for the comparable period in 2003. The 11% increase in revenues was comprised of 7% internal growth and 4% acquisition growth. The Medicare reimbursement reductions for respiratory medications that were effective on January 1, 2004 reduced total revenues in the year by $54.2 million. Net income for the year ended December 31, 2004, was $273.4 million compared to net income of $232.1 million for the prior year.
The Company adopted the provisions of Emerging Issues Task Force (EITF) 04-8, “The Effect of Contingently Convertible Debt on Diluted Earnings per Share,” effective for reporting periods ending after December 15, 2004. The Company has outstanding $275.0 million of 3.00% Convertible Senior Debentures issued in June of 2003, with a conversion price of $53.33 and a contingent conversion trigger of $64.00. EITF 04-8 requires that the dilutive effect of contingently convertible debt instruments be reflected in diluted earnings per share by application of the if-converted method regardless of whether the market price trigger or other contingent features have been met. Prior period earnings per share amounts presented for comparative purposes have been restated to conform with EITF 04-8. Accordingly, the Company’s diluted earnings per share after applying the if-converted method were $2.60 for the year ended December 31, 2004, an increase of 19% over the $2.19 restated diluted earnings per share for the comparable period last year.
For the quarter ended December 31, 2004, revenues were $324.2 million, a 7% increase over revenues of $302.8 million for the fourth quarter of 2003. The 7% increase in revenues was comprised of 5% internal growth and 2% acquisition growth. Medicare reimbursement reductions for respiratory medications that took effect in 2004 reduced total revenues in the quarter by $14.3 million. Net income for the quarter ended December 31, 2004, was $72.7 million compared to net income of $62.0 million for the fourth quarter of 2003. Diluted earnings per share after applying the if-converted method were $0.68 for the quarter ended December 31, 2004, an increase of 15% over the $0.59 restated diluted earnings per share for the comparable period last year.
John P. Byrnes, Lincare’s Chief Executive Officer, said, “We are pleased with Lincare’s operating and financial performance in 2004. Our efforts to reduce costs and control operating expenses enabled us to achieve record earnings and cash flows notwithstanding Medicare reimbursement reductions totaling in excess of $50 million. Excluding the effects of the Medicare price cuts, we achieved internal revenue growth of approximately 12% in 2004. We remained active in opening denovo locations in new and contiguous geographic markets and complemented our growth with acquisitions of local and regional competitors.”
Lincare added 77 new operating centers in 2004, bringing the total number of Lincare locations to 804. The Company added 25 new operating centers through the acquisition of 26 companies with annual revenues of approximately $49.0 million and added an additional 52 locations through internal expansion.
Mr. Byrnes added, “Our financial position is strong and we are well positioned to absorb the significant Medicare reimbursement reductions to oxygen and inhalation drugs scheduled to take effect in 2005. Lincare generated $418.9 million of cash from operating activities during 2004 and investments of cash included $89.7 million in capital expenditures and $83.0 million in business acquisition expenditures. At December 31, 2004, cash and cash equivalents totaled $225.8 million and long-term obligations, including current maturities of bank debt, were $320.3 million.
Lincare, headquartered in Clearwater, Florida, is one of the nation’s largest providers of oxygen and other respiratory therapy services to patients in the home. The Company provides services and equipment to over 530,000 customers in 47 states.
Statements in this release concerning future results, performance or expectations are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. All forward-looking statements included in this document are based upon information available to Lincare as of the date hereof and Lincare assumes no obligation to update any such forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause Lincare’s actual results, levels of activity, performance or achievements to be materially different from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statements. In some cases, forward-looking statements that involve risks and uncertainties contain terminology such as “may,” “will,” “should,” “could,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or variations of these terms or other comparable terminology.
Key factors that have an impact on Lincare’s ability to attain any estimates contained in this release include potential reductions in reimbursement rates by government and third party payors, changes in reimbursement policies, the demand for Lincare’s products and services, the availability of appropriate acquisition candidates and Lincare’s ability to successfully complete and integrate acquisitions, efficient operations of Lincare’s existing and future operating facilities, regulation and/or regulatory action affecting Lincare or its business, economic and competitive conditions, access to borrowed and/or equity capital on favorable terms and other risks described in the filings of Lincare with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2003.
In developing its forward-looking statements, Lincare has made certain assumptions relating to reimbursement rates and policies, internal growth and acquisitions and the outcome of various legal and regulatory proceedings. If the assumptions used by Lincare differ materially from what actually occurs, then actual results could vary significantly from the performance projected in the forward-looking statements. Lincare is under no duty to update any of the forward-looking statements after the date of this release.
LINCARE HOLDINGS INC. Financial Summary (Unaudited) (In thousands, except share and per share data) For the three months ended December 31, December 31, 2004 2003 Net revenues $324,241 $302,783 Costs and expenses: Costs of goods and services 47,335 45,995 Operating expenses 65,669 64,832 Selling, general and administrative expenses 63,274 62,290 Bad debt expense 4,864 4,541 Depreciation expense 21,593 20,348 Amortization expense 396 379 Operating income 121,110 104,398 Interest and other expense 2,521 4,947 Income before income taxes 118,589 99,451 Income taxes 45,881 37,495 Net income $72,708 $61,956 Basic earnings per common share $0.72 $0.63 Diluted earnings per common share $0.68 $0.59 Weighted average number of common shares outstanding 100,513,512 98,524,102 Weighted average number of common shares and common share equivalents outstanding 108,242,761 106,750,944 For the twelve months ended December 31, December 31, 2004 2003 Net revenues $1,268,531 $1,147,356 Costs and expenses: Costs of goods and services 184,398 171,658 Operating expenses 264,447 253,341 Selling, general and administrative expenses 257,019 239,656 Bad debt expense 19,028 17,210 Depreciation expense 86,615 75,007 Amortization expense 1,537 1,587 Operating income 455,487 388,897 Interest and other expense 15,084 17,633 Income before income taxes 440,403 371,264 Income taxes 166,975 139,153 Net income $273,428 $232,111 Basic earnings per common share $2.74 $2.28 Diluted earnings per common share $2.60 $2.19 Weighted average number of common shares outstanding 99,700,964 101,670,579 Weighted average number of common shares and common share equivalents outstanding 107,230,200 107,413,750 LINCARE HOLDINGS INC. Selected Balance Sheet Data (Unaudited) (In thousands) December 31, December 31, 2004 2003 Cash $225,789 $9,815 Accounts Receivable, Net 137,891 151,194 Current Assets 377,855 187,090 Total Assets 1,724,521 1,431,660 Current Liabilities 130,262 147,157 Long Term Obligations, including Current Maturities of Bank Debt 320,293 370,817 Stockholders’ Equity 1,168,478 848,247
Lincare Holdings Inc.
CONTACT: Paul G. Gabos, Lincare Holdings Inc., +1-727-530-7700
Web site: http://www.lincare.com/
