FOOTHILL RANCH, Calif., May 14 /PRNewswire/ -- Skilled Healthcare Group, Inc. today announced significantly improved results for its first quarter ended March 31, 2004.
EBITDA (earnings before interest, taxes, depreciation and amortization), which management believes is an important measure to assess operational performance, increased to $15.0 million in the first quarter of 2004 from $10.4 million in the first quarter 2003. EBITDA as a percentage of net revenues was 14.9 percent in the current first quarter, compared with 12.2 percent in the first quarter 2003. During the quarter ended March 31, 2004, debt was reduced by $10.8 million, and cash flow from operations equaled $11.3 million.
Net income for the first quarter of 2004 rose to $3.5 million from $386,000 in the first quarter a year ago. Results for the current first quarter reflected $445,000 of reorganization expenses incurred with the company's emergence from bankruptcy, reduced from $2.4 million in the 2003 first quarter.
Net revenue increased to $100.7 million from $85.1 million in first quarter of 2003. The company attributed the higher revenues and earnings to a 2.5 percent increase in average occupancy during the quarter, increased Medicare rates, and acquisitions in the second half of 2003 of five nursing care facilities in Northern California.
"Our first quarter results are a strong start to the new year and strengthen our confidence for continued improvement," said Boyd Hendrickson, chief executive officer. "Operationally, each of our three segments -- skilled nursing, therapy and pharmacy subsidiaries -- showed good revenue growth as well as improved services and profitability over the prior year.
"We are excited about the opportunities ahead for Skilled Healthcare in our growing markets," Hendrickson added. "Our enthusiasm is backed by the depth and experience of our management team, the quality of our facilities, the standard of service and care we provide to patients, and the strong relations we are building in our communities."
About Skilled Healthcare Group
Skilled Healthcare Group, through its facility operations subsidiaries, is a leading operator of long-term care facilities and a provider of a full continuum of post-acute care services, with a strategic emphasis on sub-acute specialty medical care. Headquartered in Foothill Ranch, California, the company's subsidiaries collectively employ approximately 7,150 employees who serve approximately 5,700 residents daily in facilities throughout California and Texas, including 49 skilled nursing and five assisted living facilities. In addition to long-term care, the company's rehabilitation subsidiaries provide a variety of high-quality ancillary services such as physical, occupational and speech therapy. Additionally, the company's pharmacy subsidiary operates three institutional pharmacies (one as a joint venture) that serve acute care hospitals as well as skilled nursing facilities and assisted living facilities.
Safe Harbor: Securities Litigation Reform Act of 1995
This news release may contain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements, including statements made by Boyd Hendrickson relative to future performance, are subject to and involve known and unknown risks and uncertainties that may cause the company's actual results in future periods to differ materially from forecasted results. These risks and uncertainties include: national and local economic conditions, including their effect on the availability and cost of labor, utilities and materials; the effect of government regulations and changes in regulations governing the healthcare industry, including the company's compliance with such regulations; changes in Medicare and Medicaid payment levels and methodologies and the application of such methodologies by the government and its fiscal intermediaries; liabilities and other claims asserted against the company, including patient care liabilities, and increases in the reserves for patient care liabilities; the ability to predict future reserves related to patient care liabilities; the ability to reduce overhead costs, obtain pricing concessions from suppliers, improve the effectiveness of the company's fundamental business processes and develop new sources of profitable revenue; the ability to execute the company's strategic growth initiatives; the ability to attract and retain qualified personnel; the availability and terms of capital to fund acquisitions and capital improvements; the ability to negotiate and complete agreements with the company's lenders; the competitive environment in which the company operates; the ability to maintain and increase census levels; and demographic changes. More detailed information about these factors is contained in the company's filings with Securities and Exchange Commission, including the company's quarterly report on Form 10-Q for the quarter ended March 31, 2004. Skilled Healthcare Group assumes no obligation to update these forward-looking statements.
For further information, please contact: Boyd Hendrickson, Chief Executive Officer of Skilled Healthcare Group, +1-949-282-5800; or Cecilia A. Wilkinson or Angie Yang of PondelWilkinson Inc., +1-323-866-6060, for Skilled Healthcare Group.
SKILLED HEALTHCARE GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands) ASSETS March 31, 2004 December 31, 2003 Current assets: (Unaudited) Cash and cash equivalents $-- $2,670 Accounts receivable 42,423 42,592 Other current assets 14,550 15,277 Total current assets 56,973 60,539 Property and equipment, net 157,241 157,580 Other assets 44,206 42,722 Total assets $258,420 $260,841 LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) Current liabilities 67,040 69,806 Long-term debt and capital leases 211,914 218,430 Other long-term liabilities 55,960 52,566 Total liabilities 334,914 340,802 Total shareholders' equity (deficit) (76,494) (79,961) Total liabilities and shareholders' equity $258,420 $260,841 SKILLED HEALTHCARE GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands) (Unaudited) Three Months Ended March 31, 2004 2003 Net revenues $100,729 $85,101 Expenses: Salaries and benefits 52,680 45,797 Supplies 13,041 13,086 Purchased services 8,695 6,012 Provision for doubtful accounts 998 1,034 Other expenses 8,335 7,090 Rent 1,970 1,708 Depreciation and amortization 2,072 2,480 Interest expense, net of interest income (includes interest expense of $0.8 million related to the mandatorily redeemable preferred stock in 2004) 7,329 5,104 Total expense before reorganization expenses 95,120 82,311 Income from continuing operations 5,609 2,790 Other income and expenses: Change in fair value of interest rate hedge 703 -- Reorganization expenses 445 2,404 Total other income and expenses 1,148 2,404 Income before income taxes 4,461 386 Provision for income taxes 1,004 -- Net income $3,457 $386 SKILLED HEALTHCARE GROUP, INC. SELECTED DATA (Unaudited) Three Months Ended Three Months Ended March 31, 2004 March 31, 2003 Occupancy 83.6% 82.0% Revenue allocation: Private and other 24% 23% Medicare 36% 34% Medicaid 40% 43% Quality mix 60% 57% Per diems: Private and other (excluding assisted living) $159.91 $144.74 Medicare $348.15 $322.84 Medicaid $107.65 $104.46 Number of facilities: Skilled nursing facilities 48 43 Assisted living facilities 5 5 Managed skilled nursing facilities 1 0 Total 54 48 Number of beds: Skilled nursing facilities 6,337 5,888 Assisted living facilities 700 700 Managed skilled nursing facilities 150 0 Total 7,187 6,588 Cash Flows Cash flow from operations (in millions) $11.3 $8.0 Capital expenditures (in millions): $1.4 $0.9 SKILLED HEALTHCARE GROUP, INC. RECONCILIATION OF NET INCOME TO EBITDA (Dollars in thousands) (Unaudited) Three Months Ended Three Months Ended March 31, 2004 March 31, 2003 Net revenue $100,729 $85,101 Net income $3,457 $386 Provision for income tax 1,004 0 Reorganization expenses 445 2,404 Change in fair value of interest rate hedge 703 0 Income from continuing operations $5,609 $2,709 Interest expense, net of interest income 7,329 5,104 Depreciation and amortization 2,072 2,480 EBITDA $15,010 $10,374
Skilled Healthcare GroupCONTACT: Boyd Hendrickson, Chief Executive Officer of Skilled HealthcareGroup, +1-949-282-5800; or Cecilia A. Wilkinson or Angie Yang ofPondelWilkinson Inc., +1-323-866-6060, for Skilled Healthcare Group
