ATLANTA, May 10 /PRNewswire-FirstCall/ -- Mariner Health Care, Inc. ("Mariner") (BULLETIN BOARD: MHCA) today announced net income for the 2004 first quarter of $6.2 million as compared to $2.8 million for the comparable 2003 period. Revenues decreased 3.4% to $408.8 million from $423.2 million for the same period last year, primarily due to facilities divested during the three months ended December 31, 2003. For facilities operated at March 31, 2004, revenues increased 8.7% to $408.3 million from $375.7 million for the three months ended March 31, 2003. Mariner achieved a significant 44.4% improvement in Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, and certain divestiture related items) to $25.6 million for the first quarter ended March 31, 2004 as compared to $17.7 million for the same period in 2003. For a detailed derivation of Adjusted EBITDA, please refer to the Adjusted EBITDA Reconciliation Schedule attached hereto.
Mariner also continued to improve its higher acuity patient mix during the first quarter of 2004. For facilities operated at March 31, 2004, average skilled census increased 4.4% over the comparable previous year first quarter, resulting in a $4.2 million increase in revenues. As a percentage of total revenues, same facility Medicare revenues continued to grow, increasing to 33.3% for the first quarter of 2004 from 31.7% for the first quarter of 2003 as a result of the October 2003 rate change for skilled nursing facilities and census increases. Same facility Medicare revenues associated with Mariner's skilled nursing and long-term acute care hospital segments accounted for 26.8% and 6.5% of total revenues, respectively, for the first quarter of 2004 compared to 25.3% and 6.4% of total revenues, respectively for the first quarter of 2003.
"I am pleased with our continued progress during the first quarter," said C. Christian Winkle, Chief Executive Officer. "Profitability of both our skilled nursing facility and long-term acute care hospital groups continued to show improvement during the quarter. For the first quarter of 2004, our Adjusted EBITDA margin improved to 6.3% from 4.2% from the same period last year. This improvement reflects the success of our operational strategies including continued focus on increasing our higher acuity patient base, as well as our successful transition to the new prospective payment system for long-term acute care hospitals."
About Mariner Health Care
Mariner is headquartered in Atlanta, Georgia. At first quarter-end 2004 certain of its subsidiaries and affiliates owned and/or operated 262 skilled nursing and assisted living facilities as well as 11 long-term acute care hospitals representing approximately 31,700 beds across the country.
Certain statements in this press release may constitute "forward-looking" statements as defined in Section 27A of the Securities Act of 1933 (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), the Private Securities Litigation Reform Act of 1995 (the "PSLRA"), or in releases made by the Securities and Exchange Commission, all as may be amended from time to time. Statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of the PSLRA. Any such forward-looking statements reflect our beliefs and assumptions and are based on information currently available to us. Forward-looking statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These cautionary statements are being made pursuant to the Securities Act, the Exchange Act and the PSLRA with the intention of obtaining the benefits of the "safe harbor" provisions of such laws. Mariner cautions investors that any forward-looking statements we make are not guarantees or indicative of future performance. For additional information regarding factors that may cause our results of operations to differ materially from those presented herein, please see "Risk Factors" contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2003.
You can identify forward-looking statements as those that are not historical in nature, particularly those that use terminology such as "may," "will," "should," "expect," "anticipate," "contemplate," "estimate," "believe," "plan," "project," "predict," "potential" or "continue," or the negative of these, or similar terms.
Any subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth or referred to above, as well as the risk factors contained in our Annual Report for the year ended December 31, 2003 on Form 10-K. Except as required by law, we disclaim any obligation to update such statements or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.
MARINER HEALTH CARE, INC. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS DATA AND SUPPLEMENTAL FINANCIAL INFORMATION (in thousands, except percentages and per share amounts) (unaudited) First Quarter First Quarter Ended Ended March 31, March 31, 2004 2003 Statement of Operations Data: Net revenue $408,808 $423,156 Costs and expenses: Operating expenses: Wage and related costs 235,123 254,735 Supplies 23,288 24,794 Insurance 16,041 20,540 Provision for bad debt 3,020 4,377 Rent expense 8,260 8,810 Other 71,128 71,730 Total operating expenses 356,860 384,986 General and administrative expenses 26,374 22,733 Depreciation and amortization 9,705 8,593 Total costs and expenses 392,939 416,312 Operating income 15,869 6,844 Other income (expenses) Interest expense (9,218) (8,213) Interest income 751 828 Other 27 (50) Income (loss) from continuing operations before taxes 7,429 (591) Income tax provision (benefit) 893 (238) Income (loss) from continuing operations 6,536 (353) Discontinued operations (Loss) gain on sale of discontinued operations, net of tax (79) 3,600 Loss from discontinued operations, net of tax (228) (479) Net income $ 6,229 $ 2,768 Earnings (loss) per share - basic: Income (loss) from continuing operations $0.33 $ (0.02) (Loss) gain on sale from discontinued operations (0.01) 0.18 Loss from discontinued operations (0.01) (0.02) Net income per share $0.31 $0.14 Weighted average common shares outstanding - basic 20,008 20,000 Earnings (loss) per share - diluted: Income (loss) from continuing operations $0.32 $ (0.02) (Loss) gain on sale from discontinued operations (0.01) 0.18 (Loss) from discontinued operations (0.01) (0.02) Net income per share $0.30 $0.14 Weighted average common shares outstanding - diluted 20,452 20,000 Operating statistics: Sources of revenue: Medicaid 45.8% 47.4% Medicare 35.6% 34.0% Private and other 18.6% 18.6% EBITDA $25,294 $18,508 Adjusted EBITDA $25,601 $17,732 MARINER HEALTH CARE, INC. CONDENSED CONSOLIDATED BALANCE SHEET AND OTHER DATA (in thousands, except other data) March 31, December 31, 2004 2003 (unaudited) ASSETS Current assets Cash and cash equivalents $20,262 $41,934 Receivables, net of allowance for doubtful accounts 248,488 234,098 Prepaid expenses and other current assets 23,466 25,396 Total current assets 292,216 301,428 Property and equipment, net 541,253 544,356 Reorganization value in excess of amounts allocable to identifiable assets 192,771 192,771 Goodwill, net 6,797 6,797 Restricted investments 19,764 19,300 Other assets 36,576 43,082 Total assets $ 1,089,377 $ 1,107,734 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current maturities of long-term debt $ 9,478 $ 9,663 Accounts payable 49,603 69,914 Accrued compensation and benefits 68,543 69,330 Accrued insurance obligations 60,000 54,315 Other current liabilities 56,241 42,202 Total current liabilities 243,865 245,424 Long-term debt, net of current maturities 375,803 379,973 Long-term insurance reserves 178,654 191,124 Other liabilities 25,217 31,741 Minority interest 3,324 3,319 Total liabilities 826,863 851,581 Stockholders' equity 262,514 256,153 Total liabilities and stockholders' equity $ 1,089,377 $ 1,107,734 Other data (skilled nursing facilities and assisted living facilities): Number of facilities (end of period): Owned 184 184 Leased 75 76 Managed 3 4 262 264 Number of beds (end of period): Owned 22,244 22,262 Leased 8,596 8,686 Managed 276 541 31,116 31,489 MARINER HEALTH CARE, INC. SUPPLEMENTAL FINANCIAL INFORMATION (in thousands) (unaudited) ADJUSTED EBITDA RECONCILIATION SCHEDULE First Quarter First Quarter Ended Ended March 31, March 31, 2004 2003 Net income $ 6,229 $ 2,768 Add back: Provision (benefit) for income taxes 893 (238) Interest expense 9,218 8,213 Interest income (751) (828) Depreciation and amortization 9,705 8,593 EBITDA 25,294 18,508 Adjustments: Loss (gain) on sale of discontinued operations, net of tax 79 (3,600) Loss from discontinued operations, net of tax 228 479 Loss from operations of divested facilities (a) - 2,345 Adjusted EBITDA $25,601 $17,732 (a) This amount relates to loss from operations on facilities that did not qualify for discontinued operations. EBITDA (which we calculate as net income before taxes, interest expense, interest income, and depreciation and amortization) and Adjusted EBITDA (which we calculate as EBITDA excluding (loss) gain on sale of discontinued operations, net of tax, loss from discontinued operations, net of tax and loss from operations of divested facilities) are non-GAAP financial measures. For purposes of Regulation G ("Regulation G") promulgated by the Securities and Exchange Commission, a non-GAAP financial measure is a numerical measure of a registrant's historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable financial measure calculated and presented in accordance with GAAP in the statement of operations, statement of stockholders' equity, balance sheet or statement of cash flows (or equivalent statements) of the registrant; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable financial measure so calculated and presented. Pursuant to the requirements of Regulation G, we have provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measure, which we believe is net (loss) income. Management believes that the presentation of EBITDA and Adjusted EBITDA provide useful information to investors regarding our results of operations because (i) they are useful for trending, analyzing and benchmarking the performance and value of our business, and (ii) Adjusted EBITDA is the means used to calculate compliance with certain ratios appearing in our senior credit facility and the indenture governing our outstanding senior subordinated notes. EBITDA and Adjusted EBITDA should be considered in addition to, not as substitutes for, or superior to, GAAP financial measures or as indicators of operating performance. MARINER HEALTH CARE, INC. SUPPLEMENTAL FINANCIAL INFORMATION (AS REPORTED - UNAUDITED) First Quarter First Quarter Ended Ended March 31, March 31, 2004 2003 NET REVENUE (in thousands): Skilled Nursing Services Medicaid $186,635 $198,367 Medicare - Part A 109,244 110,298 Private & other 79,611 84,735 Subtotal 375,490 393,400 LTAC 33,245 29,324 Other 73 432 Total $408,808 $423,156 PATIENT DAYS (in thousands): Skilled Nursing Services Medicaid 1,583 1,747 Medicare - Part A 336 373 Private & other 440 509 Total 2,359 2,629 PER DIEM RATE (including ancillaries): Skilled Nursing Services Medicaid $117.93 $113.52 Medicare - Part A 325.30 295.32 Private & other 181.09 166.50 Total (a) $159.24 $149.59 Occupancy - Skilled Nursing Services 85.0% 85.5% (a) Weighted average rates. For all periods presented, amounts have been adjusted to exclude discontinued operations. MARINER HEALTH CARE, INC. SUPPLEMENTAL FINANCIAL INFORMATION (SAME FACILITY OPERATIONS - UNAUDITED) First Quarter First Quarter Ended Ended March 31, March 31, 2004 2003 NET REVENUE (in thousands): Skilled Nursing Services Medicaid $186,243 $175,433 Medicare - Part A 109,244 95,019 Private & other 79,514 75,493 Subtotal 375,001 345,945 LTAC 33,245 29,324 Other 73 432 Total $408,319 $375,701 PATIENT DAYS (in thousands): Skilled Nursing Services Medicaid 1,583 1,588 Medicare - Part A 336 322 Private & other 439 457 Total 2,358 2,367 PER DIEM RATE (including ancillaries): Skilled Nursing Services Medicaid $117.68 $110.48 Medicare - Part A 325.30 295.41 Private & other 181.04 165.10 Total (a) $159.06 $146.16 Occupancy - Skilled Nursing Services 85.0% 85.6% (a) Weighted average rates. Contact: Mariner Health Care, Inc. Boyd Gentry Senior Vice President and Treasurer 678-443-6872
Mariner Health Care, Inc.CONTACT: Boyd Gentry, Senior Vice President and Treasurer of MarinerHealth Care, Inc., +1-678-443-6872
Web site: http://www.marinerhealth.com/