SCOTTSDALE, Ariz., Aug. 8 /PRNewswire-FirstCall/ -- VistaCare, Inc. , a leading provider of hospice services in the United States, today reported results for the fiscal third quarter ended June 30, 2005. Net patient revenue for the quarter was $57.5 million, a 19.5% increase from $48.1 million reported in the year ago comparable period. Net income for the quarter was $0.9 million, or $0.06 per diluted share compared with a net loss for the quarter ended June 30, 2004 of $1.8 million or a loss of $0.11 per diluted share.
For the nine-month period ended June 30, 2005, net patient revenue increased 10.4% to $171.5 million from $155.3 million for the nine-month period ended June 30, 2004. Year-to-date net income was $2.8 million, or $0.17 per diluted share, compared with net income of $6.7 million, or $0.39 per diluted share for the same period of last year.
VistaCare’s patient admissions for the fiscal third quarter of 2005 increased 18% to 4,428 from the comparable period one year ago and were down 4% from 4,601 for the fiscal second quarter of 2005. VistaCare’s average daily census (ADC) for the fiscal third quarter of 2005 was 5,387, a 3% increase from 5,216 for the three-month period ended June 30, 2004, and a 0.5% increase from 5,358 for the fiscal second quarter 2005. Patient discharges for the fiscal third quarter rose 20.7% to 4,273 compared with 3,540 for the quarter ended June 30, 2004.
“While our ADC growth remains slower than expected, several positive operating trends continued to emerge during our fiscal third quarter,” commented Richard R. Slager, Chairman and Chief Executive Officer. “We continued to generate strong year-over-year admission growth while implementing strategies to balance the length of stay at each individual site. Hospital referral admissions grew 21.9% from the year ago period and our median length of stay increased to 31 days from 28 days for the quarter ended March 31, 2005 reflective of our recent emphasis on longer length of stay patients at non-Cap affected sites.
“We expanded our investments in the program and personnel strategies designed to position VistaCare for long-term growth and profitability,” continued Mr. Slager. “We now expect to finish fiscal year 2005 with 14 new programs compared with our original forecast of between 10 and 12. In addition to the recently announced Inpatient Unit (IPU) being developed at the Wesley Woods Center of Emory Healthcare in Atlanta Georgia, we are planning to address increased interest from our hospital partners by committing to the development of two to three additional IPUs in other markets before the end of the fiscal year. These program investments, coupled with our ongoing investments in our Hospital Liaison and Director of Professional Relations field teams, further improve our potential for admissions and average daily census growth, as well as reduce our exposure to Medicare Cap. These strategies have proven successful despite their short-term impact on our profitability that we believe will lessen substantially as we enter fiscal 2006,” added Mr. Slager.
“While we generated year-over-year admissions growth during the fiscal third quarter, on a sequential basis, admissions declined approximately 4%,” said David W. Elliot, President and Chief Operating Officer. “During the quarter, we implemented extensive training for 260 members of our field team. This training was focused on the need for a majority of the VistaCare programs, which do not have immediate potential of Cap exposure, to re-direct their marketing efforts at longer length-of-stay referral sources to drive ADC growth. While this “out-of-field” training had a short-term impact on our admissions growth, this effort has begun to immediately show results as evidenced by two key requirements for our ADC growth, a 6% decline in patient discharges during the quarter as well as an increased median length of stay.
“Looking ahead to the remainder of fiscal 2005, and into fiscal 2006, we will continue our efforts to better balance length of stay at individual sites, focus on further enhancing the productivity of our marketing force, and execute our IPU and new site development strategies. We believe that the combination of these strategies, and their resulting costs, along with other current operating trends will result in a breakeven fiscal fourth quarter, but position us well for fiscal 2006. It is important to note that during the fiscal fourth quarter, we anticipate being notified by our fiscal intermediary of Medicare Cap adjustments from prior fiscal years that could have positive or negative impact on fourth quarter earnings.
The results for the fiscal third quarter of 2005 included a charge for Medicare Cap exposure of $1.5 million, bringing the Company’s year-to-date accrual for Medicare Cap exposure to $4.5 million. For the full fiscal year ending September 30, 2005, the Company now forecasts an accrual for Medicare Cap of approximately $6.0 million, which includes the $1.1million 2002 Cap reassessment.
The Company had several large cash disbursements in the fiscal third quarter resulting in negative cash flow of $4.7 million for the period and ended the quarter with $58.7 million in cash and short-term investments.
“Although the fiscal third quarter financial results were not as positive as we had expected, and our outlook for the full year’s profitability has been diminished by the expansion of our program development investments, the long-term trends are positive and reflective of our 2005 goal to expand our regional market presence, grow admissions and minimize our current and future Cap exposure,” continued Mr. Slager. “These trends, combined with our immediate and ongoing efforts to minimize the operating expense impact of our program development effort, bode well for the future.”
Conference Call
VistaCare will host a conference call and webcast on Monday, August 8, 2005 at 5:00 p.m. Eastern Time to discuss VistaCare’s fiscal third quarter results and recent corporate developments. The dial in number for the conference call is 800-218-0204 for domestic participants and 303-262-2140 for international participants.
A taped replay of the conference call will also be available beginning approximately one hour after the call’s conclusion. The replay will remain available through Midnight Eastern Time on Monday, August 15, 2005 and can be accessed by dialing 800-405-2236 for domestic callers and 303-590-3000 for international callers, using pass code 11035203#. To access the live webcast of the call, go to VistaCare’s website at www.vistacare.com and click on Investor Relations. An archived webcast will also be available on VistaCare’s website.
About VistaCare
VistaCare is a leading provider of hospice services in the United States. Through interdisciplinary teams of physicians, nurses, home healthcare aides, social workers, spiritual and other counselors and volunteers, VistaCare provides care primarily designed to reduce pain and enhance the quality of life of terminally ill patients, most commonly in the patient’s home or other residence of choice.
Forward-Looking Statements:
Certain statements contained in this press release and the accompanying tables, including statements with respect to VistaCare’s anticipated growth in net patient revenue, organic patient census and diluted earnings per share, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “hope,” “anticipate,” “plan,” “expectations,” “forecast,” “goal,” “targeted” and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. VistaCare does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These statements are based on current expectations and assumptions and involve various risks and uncertainties, which could cause VistaCare’s actual results to differ from those expressed in such forward- looking statements. These risks and uncertainties arise from, among other things, possible changes in regulations governing the hospice care industry, periodic changes in reimbursement levels and procedures under Medicare and Medicaid programs, difficulties predicting patient length of stay and estimating potential Medicare reimbursement obligations, patient discharge rate, challenges inherent in VistaCare’s growth strategy, the current shortage of qualified nurses and other healthcare professionals, VistaCare’s dependence on patient referral sources, and other factors detailed under the caption “Factors that May Affect Future Results” or “Risk Factors” in VistaCare’s most recent report on form 10-Q or 10-K and its other filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on such forward-looking statements and there are no assurances that the matters contained in such statements will be achieved.
Company Contact: Rick Slager Chief Executive Officer 480-648-4545 ir@vistacare.com Investor Contacts: Douglas Sherk, Jennifer Beugelmans EVC Group 415-896-6820 dsherk@evcgroup.com Media Contact: Steve DiMattia EVC Group 415-896-6820 sdimattia@evcgroup.com VISTACARE, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share information) June 30, September 30, 2005 2004 (unaudited) ASSETS Current assets: Cash and cash equivalents $14,978 $28,687 Short-term investments 43,699 33,165 Patient accounts receivable (net of allowance for denials of $2,146 and $2,905 at June 30, 2005 and September 30, 2004, respectively) 17,995 17,495 Patient accounts receivable-room & board (net of allowance for denials of $1,248 and $2,980 at June 30, 2005 and September 30, 2004, respectively) 5,833 8,789 Prepaid expenses 3,498 3,404 Tax receivable 2,457 3,014 Deferred tax assets 6,728 10,676 Total current assets 95,188 105,230 Fixed assets, net 5,493 5,379 Goodwill 20,852 20,564 Other assets 6,600 6,619 Total assets $128,133 $137,792 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $406 $1,367 Accrued expenses 36,036 45,117 Current portion of capital lease obligations -- 5 Total current liabilities 36,442 46,489 Deferred tax liability-non-current -- 3,776 Stockholders’ equity: Class A Common Stock, $0.01 par value; authorized 33,000,000 shares; 16,360,926 and 16,209,282 shares issued and outstanding at June 30, 2005 and September 30, 2004, respectively. 164 162 Additional paid-in capital 107,890 107,084 Deferred compensation (638) (1,175) Accumulated deficit (15,725) (18,544) Total stockholders’ equity 91,691 87,527 Total liabilities and stockholders’ equity $128,133 $137,792 VISTACARE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) Three Months Ended Nine Months Ended June 30, June 30, 2005 2004 2005 2004 Operating activities Net income (loss) $980 $(1,751) $2,819 $6,688 Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: Depreciation and amortization 1,056 955 3,474 2,771 Amortization of deferred compensation related to stock options and grants 80 76 225 248 Deferred income tax expense (benefit) 335 76 172 (1,009) Loss on disposal of assets 109 -- 346 -- Changes in operating assets and liabilities: Patient accounts receivable, net (2,531) 4,592 (4,980) 5,714 Prepaid expenses and other (59) (4,730) 462 (4,495) Accounts payable and accrued expenses (2,695) 11,986 (2,605) 13,472 Net cash (used in) provided by operating activities (2,725) 11,204 (87) 23,389 Investing activities Purchases of equipment (508) (551) (1,765) (2,234) Short-term investments purchased (240) (56,339) (23,014) (162,996) Short-term investments sold -- 56,252 12,480 162,779 Internally developed software expenditures (134) (279) (752) (777) Acquisition (300) -- (300) -- Other assets (1,062) (63) (1,384) (823) Net cash used in investing activities (2,244) (980) (14,735) (4,051) Financing activities Net payments on long-term debt -- -- (5) (23) Proceeds from issuance of common stock from exercise of stock options and employee stock purchase plan 257 131 1,118 2,872 Net cash provided by financing activities 257 131 1,113 2,849 Net (decrease) increase in cash (4,712) 10,355 (13,709) 22,187 Cash and cash equivalents, beginning of period 19,690 23,204 28,687 11,372 Cash and cash equivalents, end of period $14,978 $33,559 $14,978 $33,559 Cash and short-term investments end of period $58,677 $66,585 $58,677 $66,585 VISTACARE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except per share information) Three Months Ended Nine Months Ended June 30, June 30, 2005 2004 2005 2004 Net patient revenue $57,476 $48,069 $171,547 $155,282 Operating expenses: Patient care expenses 36,113 33,202 106,546 96,559 Sales, general and administrative expenses (exclusive of stock-based compensation charges reported below) 18,946 16,565 57,157 46,100 Depreciation and amortization 1,056 955 3,474 2,771 Stock-based compensation 80 76 225 248 Total operating expenses 56,195 50,798 167,402 145,678 Operating income (loss) 1,281 (2,729) 4,145 9,604 Non-operating income (expense): Interest income 374 113 849 307 Interest expense 7 (19) -- (59) Other expense (176) (11) (480) (44) Total non-operating income 205 83 369 204 Net income (loss) before income taxes 1,486 (2,646) 4,514 9,808 Income tax expense (benefit) 506 (895) 1,695 3,120 Net income (loss) $980 $(1,751) $2,819 $6,688 Net income (loss) per common share: Basic net income (loss) per common share $0.06 $(0.11) $0.17 $0.42 Diluted net income (loss) per common share $0.06 $(0.11) $0.17 $0.39 Weighted average shares outstanding: Basic 16,362 16,167 16,299 16,013 Diluted 16,909 16,167 16,899 17,222
VistaCare, Inc.
CONTACT: Rick Slager, Chief Executive Officer of VistaCare,+1-480-648-4545, or ir@vistacare.com; or investors, Douglas Sherk,dsherk@evcgroup.com, or Jennifer Beugelmans, +1-415-896-6820, or media,Steve DiMattia, +1-415-896-6820, or sdimattia@evcgroup.com, all of EVCGroup, for VistaCare
Web site: http://www.vistacare.com/
