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BEVERLY, Mass., May 10, 2012 (BUSINESS WIRE) -- American Renal Associates Holdings, Inc., and its subsidiary American Renal Holdings Inc. announced results today for the quarter ended March 31, 2012. Financial and operating highlights include:
-- Revenues -- Patient service operating revenues for the three months ended March 31, 2012 were $97.2 million as compared to $84.7 million for the same period in 2011.
-- Adjusted EBITDA(1) -- Adjusted EBITDA for the three months ended March 31, 2012 was $17.7 million. This compares to Adjusted EBITDA for the three months ended March 31, 2011 of $14.3 million.
-- Center Activity - As of March 31, 2012, we provided services at 112 outpatient dialysis centers serving 7,648 patients. During the first quarter of 2012, we acquired 1 center, opened 4 de novo centers and closed 1 center.
-- Volume - Total treatments for the first quarter of 2012 were 275,642 or 3,534 treatments per day, representing a per day increase of 11.9% over the first quarter of 2011. Non-acquired treatment growth was 10.9% in the first quarter.
American Renal Associates will hold a conference call to discuss its results for the first quarter ended March 31, 2012 today at 5:00 p.m. Eastern Time. The live call can be accessed by dialing either 1-877-407-8029 or 201-689-8029.
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on management's current expectations, the accuracy of which is necessarily subject to risks and uncertainties. These statements are not historical in nature and use words such as "anticipate", "estimate", "expect", "project", "intend", "forecast", "plan", "believe", and other words of similar meaning in connection with any discussion of future operating or financial performance. Many factors may cause actual results to differ materially from anticipated results including product developments, sales efforts, income tax matters, the outcomes of contingencies such as legal proceedings, and other economic, business, competitive and regulatory factors. We undertake no obligation to update our forward-looking statements.
_____________________________________________________________________________
(1) This press release includes Adjusted EBITDA and Adjusted EBITDA
including noncontrolling interests, all of which are not financial
measures defined by Generally Accepted Accounting Principles (GAAP).
See Reconciliation of Non-GAAP Financial Measures section at the end
of this press release for the definitions of these measures as well
as their reconciliations to net income.
About American Renal Associates
American Renal Associates Holdings, Inc. is the parent of American Renal Holdings Inc. and American Renal Associates LLC ("ARA") and is a leading owner and provider of outpatient kidney dialysis facilities operating facilities in partnership with nephrologists throughout the United States. The Company's unique operating philosophy merges physician autonomy, leading edge patient care and financial partnership between the nephrologists and ARA. Consequently, ARA has become one of the largest providers of outpatient kidney dialysis services in the nation with 112 owned facilities as of March 31, 2012 which are located in 19 states and the District of Columbia. For more information, visit
www.americanrenal.com .
American Renal Associates Holdings, Inc.
Consolidated Statements of Operations
(unaudited and in thousands)
Three Months Ended Three Months Ended
March 31, March 31,
2012 2011
---------------- ----------------
Patient service operating revenues $ 97,164 $ 84,668
Less: Provision for uncollectible accounts (887) (1,264)
------- --- ------ ----
Net patient service operating revenues 96,277 83,404
Operating expenses:
Patient care costs 58,079 54,280
General and administrative 10,431 10,388
Merger and transaction-related costs - 36
Depreciation and amortization 4,778 4,349
------- ------
Total operating expenses 73,288 69,053
------- ------
Operating Income 22,989 14,351
Interest expense, net (9,995) (7,041)
------- --- ------ ----
Income before income taxes 12,994 7,310
Income tax expense (benefit) 970 (95)
------- ------ ----
Net income 12,024 7,405
Less: Net income attributable to noncontrolling interests (10,629) (7,549)
------- --- ------ ----
Net income (loss) attributable to ARAH $ 1,395 $ (144)
====== ======= ====== ====== ====
American Renal Associates Holdings, Inc.
Condensed Consolidated Balance Sheets
(unaudited and in thousands)
March 31, December 31,
2012 2011
----------- -------------
Assets
Cash $ 41,727 $ 36,774
Patient accounts receivable, net 56,448 56,027
Income tax receivable 1,322 1,322
Inventories, prepaid expenses and other current assets 16,203 15,101
------- -------
Total current assets 115,700 109,224
Property and equipment, net 74,747 72,416
Deferred financing costs, net 4,737 4,962
Intangible assets, net 35,462 35,416
Other long-term assets 2,111 1,734
Goodwill 512,062 504,045
------- -------
Total assets $ 744,819 $ 727,797
==== ======= ====== =======
Liabilities and Equity
Current liabilities:
Accounts payable and accrued expenses $ 57,168 $ 52,682
Amount due to sellers 2,192 2,192
Current portion of long-term debt 2,738 2,662
Current portion of capital lease obligations 52 51
------- -------
Total current liabilities 62,150 57,587
Long-term debt, less current portion 395,870 391,084
Capital lease obligations, less current portion 98 111
Other long-term liabilities 3,129 3,362
Deferred tax liabilities 16,233 16,233
Noncontrolling interests subject to put provisions 48,219 47,492
Total equity 219,120 211,928
------- -------
Total liabilities & equity $ 744,819 $ 727,797
==== ======= ====== =======
American Renal Associates Holdings, Inc.
Supplemental Business Metrics
(unaudited)
Three Months Three Months Three Months
Ended Ended Ended
March 31, December 31, March 31,
2012 2011 2011
--------------- --------------- ---------------
Volume
Treatments 275,642 266,313 243,238
Number of treatment days 78 79 77
Treatments per day 3,534 3,371 3,159
Non-acquired growth year over year 10.9 % 11.3 % 14.3 %
Revenue
Patient service operating revenues (in thousands) $ 97,164 $ 93,106 $ 84,668
Patient service operating revenues per treatment $ 352.50 $ 349.61 $ 348.09
Per treatment (decrease) increase from previous quarter $ 2.89 $ (5.46) $ 4.14
Provision for uncollectible accounts
As a % of patient service operating revenues 0.9 % 0.7 % 1.5 %
Expenses
Patient care costs
Amount (in thousands) $ 58,079 $ 54,539 $ 54,280
As a % of patient service operating revenues 59.8 % 58.6 % 64.1 %
Per treatment $ 210.70 $ 204.79 $ 223.16
Per treatment increase (decrease) from previous quarter $ 5.91 $ (5.66) $ 3.91
General and administrative expenses
Amount (in thousands) $ 10,431 $ 9,908 $ 10,388
As a % of patient service operating revenues 10.7 % 10.6 % 12.3 %
Per treatment $ 37.84 $ 37.20 $ 42.71
Per treatment increase (decrease) from previous quarter $ 0.64 $ 0.03 $ 11.11
Adjusted EBITDA
Adjusted EBITDA including noncontrolling interests (in thousands) $ 28,301 $ 28,376 $ 21,875
Adjusted EBITDA (in thousands) $ 17,672 $ 18,032 $ 14,326
Accounts receivable DSO (days) 53 54 62
American Renal Associates Holdings, Inc.
Reconciliation of Non-GAAP Financial Measures:
(unaudited and in thousands)
To supplement our consolidated financial statements prepared in accordance with GAAP, we use the following measures defined as Non-GAAP measures by the SEC: Adjusted EBITDA (including noncontrolling interests) and Adjusted EBITDA. Adjusted EBITDA is defined as net income attributable to ARAH before income taxes, interest expense, depreciation and amortization, and we further adjust for other non-cash charges and non-recurring charges. We believe this information is useful for evaluating our business and understanding our operating performance in a manner similar to management. We believe Adjusted EBITDA is helpful in highlighting trends because Adjusted EBITDA excludes the results of decisions that are outside the control of operating management and can differ significantly from company to company depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and capital investments. In addition, we present Adjusted EBITDA because it is one of the components used in the calculations under the covenants contained in our revolving credit facility. Adjusted EBITDA is not a measure of operating performance computed in accordance with GAAP and should not be considered as a substitute for operating income, net income, cash flows from operations, or other statement of income or cash flow data prepared in conformity with GAAP, or as measures of profitability or liquidity. In addition, Adjusted EBITDA may not be comparable to similarly titled measures for other companies. Adjusted EBITDA may not be indicative of historical operating results, and we do not mean for it to be predictive of future results of operations or cash flows. Adjusted EBITDA has limitations as an analytical tool, and you should not consider this item in isolation, or as a substitute for an analysis of our results as reported under GAAP. Some of these limitations are that Adjusted EBITDA:
-- does not include interest expense--as we have borrowed money for general corporate purposes, interest expense is a necessary element of our costs and ability to generate profits and cash flows;
-- does not include depreciation and amortization--because construction and operation of our dialysis clinics requires significant capital expenditures, depreciation and amortization are a necessary element of our costs and ability to generate profits;
-- does not include stock-based compensation expense;
-- does not reflect changes in, or cash requirements for, our working capital needs; and
-- does not include certain income tax payments that represent a reduction in cash available to us.
The following table presents the reconciliation from net income to Adjusted EBITDA for the periods indicated:
Three Months Three Months Three Months
Ended Ended Ended
March 31, December 31, March 31,
2012 2011 2011
--------------- --------------- --------------
Reconciliation of Net income to
Adjusted EBITDA:
Net income $ 12,024 $ 10,728 $ 7,405
Interest expense, net 9,995 9,860 7,041
Income tax expense 970 2,588 (95)
Depreciation and amortization 4,778 4,643 4,349
Merger and transaction-related costs - 154 36
Stock-based compensation 220 230 2,968
Management fee 314 173 171
------- ------- ------
Adjusted EBITDA (including noncontrolling interests) $ 28,301 $ 28,376 $ 21,875
Less: Net income attributable to noncontrolling interests (10,629) (10,344) (7,549)
------- ---- ------- ---- ------ ----
Adjusted EBITDA $ 17,672 $ 18,032 $ 14,326
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American Renal Associates Holdings, Inc.
Supplemental Information
(unaudited and in thousands)
The following tables present our selected consolidating financial information, for American Renal Associates Holdings, Inc. (ARAH) and American Renal Holdings Inc. (ARH) which you should read in conjunction with our condensed consolidated financials.
For the Three Months Ended March 31 , 2012 For the Three Months Ended March 31, 2011
------------------------------------------------ ------------------------------------------------
ARAH ARH Total ARAH ARH Total
Interest expense, net ($4,126) ($5,869) ($9,995) ($1,291) ($5,750) ($7,041)
Income tax (benefit) expense (1,699) 2,669 970 (513) 418 (95)
As of March 31, 2012 As of December 31, 2011
------------------------------------------------ ------------------------------------------------
ARAH ARH Total ARAH ARH Total
Assets
Cash $ 4,638 $ 37,089 $ 41,727 $ 4,638 $ 32,136 $ 36,774
Deferred financing costs, net 576 4,161 4,737 611 4,351 4,962
Liabilities
Current portion of long-term debt - 2,738 2,738 - 2,662 2,662
Long-term debt, less current portion 145,934 249,936 395,870 141,844 249,240 391,084
SOURCE: American Renal Associates Holdings, Inc.
American Renal Associates Holdings, Inc.
Jonathan Wilcox, 978-922-3080 ext. 385
Chief Financial Officer
Copyright Business Wire 2012
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