EX-99.1 2 a15-11341_1ex99d1.htm EX-99.1

Exhibit 99.1

 

21ST CENTURY ONCOLOGY HOLDINGS, INC.

 

21st Century Oncology Contact:

Investor Contact:

Richard Lewis

The Ruth Group

SVP, CFO for U.S. Operations

Nick Laudico

239-931-7281

646-536-7030

richard.lewis@21co.com

nlaudico@theruthgroup.com

 

 

 

Courtney Dugan

 

646-536-7024

 

cdugan@theruthgroup.com

 

21ST CENTURY ONCOLOGY HOLDINGS INC. REPORTS FIRST QUARTER 2015 FINANCIAL RESULTS

 

First Quarter 2015 Highlights:

 

·                  Total pro forma revenues of $278.5  million, a 15.0% year-over-year increase

·                  Pro forma Adjusted EBITDA of $43.7 million, a 39.4% increase

·                  5th consecutive quarter of Pro Forma Adjusted EBITDA margin expansion — 15.7% of total pro forma revenues

·                  Cash generated from operating activities of $22.7 million during quarter

·                  Same store growth of 3.9% year-over-year, representing the 8th consecutive quarter of growth in same store freestanding treatments per day

·                  International cases increased 5.1% versus the same period in the prior year

·                  Key contributions from OnCure Holdings, Inc. (“Oncure”) and South Florida Radiation Oncology (“SFRO”)

 

Recent Developments:

 

·                  Completed $1.1 billion refinancing which extended maturities, lowered cash interest expense and via OnCure Holdings Tender Offer, redeemed 99.4% of 11.75% Senior Secured Notes

·                  Significant and accretive contributions from recent joint venture investments — Northwestern Cancer Clinic, LLC (“NWCC”, Washington) and The Maddock Center (“Maddock,” Rhode Island)

·                  Entered into additional affiliations with The University of Florida, UCLA, Jackson South, and Lourdes Health System

 

FORT MYERS, FL, May 12, 2015 — 21st Century Oncology Holdings, Inc. (“21C or the “Company”), the leading global, physician-led provider of integrated cancer care (“ICC”) services, announced today its financial results for the first quarter ended March 31, 2015.

 



 

Dr. Daniel Dosoretz, Founder, President and Chief Executive Officer, commented, “We are very pleased with our solid start to 2015. Results for the first quarter were strong, reflecting growth from existing operations as well as from contributions from recent acquisitions, both domestic and international. Same store treatment growth was 3.9% and same store freestanding revenue growth was 4.6%, both meeting the high side of guidance provided to investors during our refinancing.  Our continued focus on cost savings and synergies resulted in a fifth consecutive quarter of year-over-year Pro Forma Adjusted EBITDA (adjusted earnings before interest, taxes, depreciation, amortization, stock-based compensation and other non-cash and pro forma items) margin expansion. We remain focused on further EBITDA growth, expense management, generating positive free cash flow, and deleveraging.”

 

Dr. Dosoretz continued, “On April 30th, we completed a refinancing that restructured 21C’s balance sheet. 21C’s three Notes issuances due in 2017, including the OnCure 11.75% Senior Secured Notes, were refinanced with a $610 million, Term Loan due 2022 and $360 million of 11% Senior Unsecured Notes due 2023.  Additionally, we replaced our $100 million unfunded revolving credit facility with a new $125 million unfunded Revolver, thereby providing us with additional liquidity and investment capacity.”

 

Dr. Dosoretz concluded, “Our management team continues to capitalize on attractive opportunities to leverage 21C’s ICC model and competitive strengths, completing two notable joint ventures in the quarter — NWCC and the purchase of Maddock in Rhode Island. NWCC expanded our footprint into a new region of the Northwest U.S. where we believe our model will be well embraced, and Maddock provided an additional geographically-convenient location for our Rhode Island joint venture. Additionally, during the quarter we entered into new hospital partnerships with the University of Florida, UCLA, Jackson South in Miami, and Lourdes Health System. While each arrangement is unique, these new partnerships result in enhanced treatment options for our patients. The positive results of this quarter, optimism for increasing contributions from our joint venture activity, continued organic growth, strong performance from OnCure and SFRO, and growth from our international operations enables 21C to re-confirm its full year 2015 Total Pro Forma Adjusted EBITDA guidance of between $182 million to $190 million.”

 

First Quarter 2015 Results

 

Total pro forma revenues for the first quarter of 2015 were $278.5 million, compared to total pro forma revenues of $242.2 million in the same quarter of 2014, driven primarily by same store growth.

 

Domestic same store treatments per day increased 3.9% in the first quarter of 2015 while same store freestanding revenues increased 4.6%. The growth was primarily driven by the continued expansion of our physician network and strong growth in our key markets. Domestic same store therapy revenue per treatment increased 1.5% in the first quarter of 2015.

 

Total Relative Value Units (RVUs) per day increased by 13.0% in the first quarter versus the same period of the prior year due to the effect of acquisitions, same store treatment growth and service mix. On a same store basis, RVUs increased 7.7% versus the same period last year as a result of same store growth and service mix. Pro Forma Adjusted EBITDA in the first quarter of 2015 was $43.7 million, or 15.7% of total revenues, up 39.4% compared to $31.3 million, or 12.9% of total pro forma revenues, in the first quarter of 2014. A reconciliation of net loss

 



 

attributable to 21C, determined in accordance with generally accepted accounting principles to Pro Forma Adjusted EBITDA and total revenues, determined in accordance with generally accepted accounting principles, to total pro forma revenues for the quarters ended March 31, 2015 and 2014 is included in the attached supplemental financial information.

 

Income tax expense in the first quarter of 2015 was $2.7 million, compared to an income tax expense of $2.1 million in the first quarter of 2014. The net loss for the first quarter of 2015 was $12.9 million, compared to a net loss of $29.2 million in the first quarter of 2014.

 

Recent Developments

 

On January 2, 2015, 21C entered into a joint venture with NWCC, whereby 21C acquired an 80% interest in a radiation oncology practice in the Tri-Cities Market of Washington State, expanding 21C’s geographical footprint into the Northwestern U.S., one of the fastest growing regions in the country. On January 6, 2015, a majority-owned 21C joint venture with hospital partners Charter Care and Care New England acquired Maddock, a single radiation oncology center located in Rhode Island. This acquisition expands 21C’s footprint in the state and provides an additional convenient treatment location for its patients. The NWCC and Maddock acquisitions increased the number of radiation treatment centers by two and increased the number 21C radiation oncology physicians by three.

 

During the first quarter, 21C entered into new hospital partnerships with the University of Florida, UCLA, Jackson South, and Lourdes Health System.

 

Financing Developments

 

On April 30, 2015, 21C closed and funded a $610 million Senior Secured Term Loan (the “Term Loan”) and $360 million of 11.0% Senior Unsecured Notes due 2023 at an issue price of 100.0% (the “Notes” and together the “Offerings”). 21C used the net proceeds from the Offerings, together with cash on hand, to repay its $90.0 million term loan facility due 2016, to redeem its 97/8% Senior Subordinated Notes due 2017, its 87/8% Senior Secured Second Lien Notes due 2017, and to repurchase 99.4% of the OnCure 11¾ Senior Secured Notes due 2017 which were refinanced subject to a tender offer, and to pay related fees and expenses. Simultaneously, 21C replaced its existing $100 million unfunded Revolving Credit Facility with a new $125 million, 5-year unfunded Revolving Credit Facility.

 

For additional details regarding these financings, please review the Company’s 8-K filed May 4, 2015 with the Securities and Exchange Commission.

 

Conference Call

 

The Company will host a conference call on Wednesday, May 13, 2015 at 3:00 p.m. Eastern Time, during which management will discuss its financial results in further detail. The dial-in numbers are (877) 407-9039 for domestic callers and (201) 689-8470 for international callers.  In addition, a telephonic replay of the call will be available until May 27, 2015.  The replay dial-in numbers are (877) 870-5176 for domestic callers and (858) 384-5517 for international callers.  Please use the conference ID number 13608002 to access the replay.

 



 

A live webcast and webcast replay of the call will also be available from the Events section on the corporate web site at www.21co.com.

 

About 21st Century Oncology Holdings, Inc.

 

21st Century Oncology Holdings, Inc. is the largest global, physician led provider of integrated cancer care services. The Company offers a comprehensive range of cancer treatment services, focused on delivering academic quality, cost-effective patient care in personal and convenient settings. As of March 31, 2015, the Company operated 182 treatment centers, including 147 centers located in 17 U.S. states and 35 centers located in six countries in Latin America.  (Source: 21st Century Oncology Holdings, Inc.)

 

Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended.  Statements preceded by, followed by or that otherwise include the words “believes”, “expects”, “anticipates”, “intends”, “projects”, “estimates”, “plans”, “may increase”, “forecast” and similar expressions or future or conditional verbs such as “will”, “should”, “would”, “may” and “could” are generally forward-looking in nature and not historical facts. Forward-looking statements are based on management’s current expectations or beliefs about the Company’s future plans, expectations and objectives, including, but not limited to, the Company’s expected financial results and estimates for 2015 and the effects of the CMS’s Final Rule for the 2015 Physician Fee Schedule on its results.  These forward-looking statements are not historical facts and are subject to risks and uncertainties that could cause the actual results to differ materially from those projected in these forward-looking statements including, but not limited to reductions in Medicare reimbursement, healthcare reform, decreases in payments by managed care organizations and other commercial payers  and other risk factors that may be described from time to time in the Company’s filings with the Securities and Exchange Commission.  Readers of this release are cautioned not to place undue reliance on forward-looking statements contained herein, which speak only as of the date stated, or if no date is stated, as of the date of this press release. The Company undertakes no obligation to publicly update or revise the forward-looking statements contained herein to reflect changed events or circumstances after the date of this release, unless required by law.

 



 

21ST CENTURY ONCOLOGY HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

(unaudited)

 

 

 

March 31,

 

December 31,

 

 

 

2015

 

2014

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

78,184

 

$

99,167

 

Restricted cash

 

7,865

 

7,051

 

Accounts receivable, net

 

153,619

 

137,807

 

Prepaid expenses

 

9,115

 

8,728

 

Inventories

 

4,355

 

4,526

 

Deferred income taxes

 

193

 

227

 

Other

 

7,821

 

7,457

 

Total current assets

 

261,152

 

264,963

 

 

 

 

 

 

 

Equity investments in joint ventures

 

1,615

 

1,646

 

Property and equipment, net

 

268,630

 

270,757

 

Real estate subject to finance obligation

 

10,849

 

22,552

 

Goodwill

 

492,868

 

469,596

 

Intangible assets, net

 

81,253

 

81,680

 

Other assets

 

35,040

 

35,530

 

Total assets

 

$

1,151,407

 

$

1,146,724

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

65,207

 

$

57,635

 

Accrued expenses

 

102,308

 

82,609

 

Income taxes payable

 

3,792

 

2,114

 

Current portion of long-term debt

 

25,088

 

26,350

 

Current portion of finance obligation

 

257

 

433

 

Other current liabilities

 

20,787

 

19,687

 

Total current liabilities

 

217,439

 

188,828

 

Long-term debt, less current portion

 

935,664

 

940,771

 

Finance obligation, less current portion

 

11,490

 

23,610

 

Embedded derivative features of Series A convertible redeemable preferred stock

 

17,185

 

15,843

 

Other long-term liabilities

 

53,340

 

51,079

 

Deferred income taxes

 

4,002

 

4,480

 

Total liabilities

 

1,239,120

 

1,224,611

 

 

 

 

 

 

 

Series A convertible redeemable preferred stock, $0.001 par value, $1,000 stated value, 3,500,000 authorized, 385,000 issued and outstanding at March 31, 2015 and December 31, 2014

 

353,388

 

328,926

 

Noncontrolling interests - redeemable

 

55,078

 

49,797

 

 

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

Common stock, $0.01 par value, 1,000,000 shares authorized 1,028 shares issued and outstanding at March 31, 2015 and December 31, 2014

 

 

 

Additional paid-in capital

 

601,162

 

626,001

 

Retained deficit

 

(1,082,729

)

(1,067,487

)

Accumulated other comprehensive loss, net of tax

 

(40,882

)

(38,690

)

Total 21st Century Oncology Holdings, Inc. shareholder’s deficit

 

(522,449

)

(480,176

)

Noncontrolling interests - nonredeemable

 

26,270

 

23,566

 

Total deficit

 

(496,179

)

(456,610

)

Total liabilities and equity

 

$

1,151,407

 

$

1,146,724

 

 



 

21ST CENTURY ONCOLOGY HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands)

(unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2015

 

2014

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

Net patient service revenue

 

$

256,757

 

$

213,908

 

Management fees

 

15,870

 

16,597

 

Other revenue

 

5,856

 

2,892

 

Total revenues

 

278,483

 

233,397

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

Salaries and benefits

 

146,959

 

125,909

 

Medical supplies

 

26,291

 

21,734

 

Facility rent expenses

 

16,875

 

15,495

 

Other operating expenses

 

14,924

 

14,381

 

General and administrative expenses

 

28,910

 

30,114

 

Depreciation and amortization

 

22,569

 

20,722

 

Provision for doubtful accounts

 

4,468

 

4,296

 

Interest expense, net

 

25,687

 

27,527

 

Loss on sale leaseback transaction

 

 

135

 

Fair value adjustment of earn-out liability

 

460

 

199

 

Fair value adjustment of embedded derivative

 

1,342

 

 

Loss on foreign currency transactions

 

242

 

28

 

Gain on foreign currency derivative contracts

 

 

(4

)

Total expenses

 

288,727

 

260,536

 

 

 

 

 

 

 

Loss before income taxes

 

(10,244

)

(27,139

)

Income tax expense

 

2,690

 

2,106

 

 

 

 

 

 

 

Net loss

 

(12,934

)

(29,245

)

 

 

 

 

 

 

Net income attributable to noncontrolling interests- redeemable and non-redeemable

 

(2,308

)

(936

)

 

 

 

 

 

 

Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder

 

(15,242

)

(30,181

)

 

 

 

 

 

 

Other comprehensive loss:

 

 

 

 

 

Unrealized loss on foreign currency translation

 

(2,435

)

(9,856

)

 

 

 

 

 

 

Comprehensive loss:

 

(15,369

)

(39,101

)

Comprehensive income attributable to noncontrolling interests- redeemable and non-redeemable

 

(2,065

)

(117

)

Comprehensive loss attributable to 21st Century Oncology Holdings, Inc. shareholder

 

$

(17,434

)

$

(39,218

)

 



 

21ST CENTURY ONCOLOGY HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2015

 

2014

 

Cash flows from operating activities

 

 

 

 

 

Net loss

 

$

(12,934

)

$

(29,245

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

Depreciation

 

19,324

 

16,737

 

Amortization

 

3,245

 

3,985

 

Deferred rent expense

 

219

 

(139

)

Deferred income taxes

 

(437

)

44

 

Stock-based compensation

 

1

 

35

 

Provision for doubtful accounts

 

4,468

 

4,296

 

(Gain) loss on the sale/disposal of property and equipment

 

(324

)

15

 

Loss on sale leaseback transaction

 

 

135

 

Loss (gain) on foreign currency transactions

 

145

 

(49

)

Gain on foreign currency derivative contracts

 

 

(4

)

Fair value adjustment of earn-out liability

 

460

 

199

 

Fair value adjustment of embedded derivative

 

1,342

 

 

Amortization of debt discount

 

446

 

572

 

Amortization of loan costs

 

1,455

 

1,493

 

Equity interest in net (earnings) loss of joint ventures

 

(24

)

38

 

Distribution received from unconsolidated joint ventures

 

53

 

54

 

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable and other current assets

 

(22,421

)

(22,621

)

Income taxes payable

 

1,720

 

1,402

 

Inventories

 

183

 

(389

)

Prepaid expenses

 

550

 

572

 

Accounts payable and other current liabilities

 

4,057

 

3,861

 

Accrued deferred compensation

 

393

 

40

 

Accrued expenses / other current liabilities

 

20,818

 

18,664

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

 

22,739

 

(305

)

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

Purchase of property and equipment

 

(12,265

)

(19,063

)

Acquisition of medical practices

 

(25,965

)

(49,319

)

Restricted cash associated with medical practice acquisitions

 

(814

)

(10,312

)

Proceeds from the sale of property and equipment

 

1,103

 

73

 

Loans to employees

 

(45

)

(294

)

Contribution of capital to joint venture entities

 

 

(315

)

Purchase of noncontrolling interest - non-redeemable

 

(1,233

)

 

Premiums on life insurance policies

 

(321

)

(5

)

Change in other assets and other liabilities

 

(62

)

208

 

 

 

 

 

 

 

Net cash used in investing activities

 

(39,602

)

(79,027

)

 



 

21ST CENTURY ONCOLOGY HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2015

 

2014

 

Cash flows from financing activities

 

 

 

 

 

Proceeds from issuance of debt

 

2,863

 

98,059

 

Principal repayments of debt

 

(9,902

)

(23,579

)

Repayments of finance obligation

 

(84

)

(61

)

Proceeds from issuance of noncontrolling interest

 

743

 

1,250

 

Proceeds from noncontrolling interest holders - redeemable and non-redeemable

 

3,230

 

229

 

Cash distributions to noncontrolling interest holders - redeemable and non-redeemable

 

(964

)

(45

)

Payments of costs for equity securities offering

 

 

(698

)

Payments of loan costs

 

 

(967

)

 

 

 

 

 

 

Net cash (used in) provided by financing activities

 

(4,114

)

74,188

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

(6

)

(32

)

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

(20,983

)

(5,176

)

Cash and cash equivalents, beginning of period

 

99,167

 

17,462

 

 

 

 

 

 

 

Cash and cash equivalents, end of period

 

$

78,184

 

$

12,286

 

 

 

 

 

 

 

Supplemental disclosure of noncash investing and financing activities

 

 

 

 

 

Finance obligation related to real estate projects

 

$

3

 

$

300

 

Derecognition of finance obligation related to real estate projects

 

$

12,215

 

$

4,119

 

Capital lease obligations related to the purchase of equipment

 

$

 

$

4,460

 

Medical equipment and service contract component related to the acquisition of medical equipment through accounts payable

 

$

4,586

 

$

5,935

 

Issuance of notes payable relating to the acquisition of medical practices

 

$

 

$

2,000

 

Liability relating to the escrow debt and purchase price of medical practices

 

$

 

$

11,687

 

Capital lease obligations related to the acquisition of medical practices

 

$

 

$

42,914

 

Earn-out accrual related to the acquisition of medical practices

 

$

1,258

 

$

1,003

 

Assumed debt obligations related to the acquisition of medical practices

 

$

290

 

$

 

Amounts payable to sellers in the purchase of a medical practice

 

$

 

$

390

 

Costs incurred for professional fees relating to issuance of equity securities

 

$

 

$

261

 

Accrued dividends on Series A convertible preferred stock

 

$

22,483

 

$

 

Accretion of redemption value on Series A convertible preferred stock

 

$

1,979

 

$

 

Change in additional paid-in capital from sale/purchase interest in subsidiaries

 

$

378

 

$

 

 



 

21ST CENTURY ONCOLOGY HOLDINGS, INC.

Supplemental Financial Information (Unaudited)

Reconciliation of Total Pro-forma Revenue and Pro-forma Adjusted EBITDA to Net Loss Attributable

to 21st Century Oncology Holdings, Inc. Shareholder

 

 

 

Three Months Ended

 

 

 

March 31,

 

(in thousands):

 

2015

 

2014

 

Total revenues

 

$

278,483

 

$

233,397

 

Pro-forma full period effect of acquisitions (a) 

 

 

8,819

 

Total pro-forma revenues

 

$

278,483

 

$

242,216

 

 

 

 

 

 

 

Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder

 

$

(15,242

)

$

(30,181

)

Income tax expense

 

2,690

 

2,106

 

Interest expense, net

 

25,687

 

27,527

 

Depreciation and amortization

 

22,569

 

20,722

 

Loss on sale leaseback transaction

 

 

135

 

Fair value adjustment of earn-out liability

 

460

 

199

 

Fair value adjustment of embedded derivative

 

1,342

 

 

Gain on foreign currency derivative contracts

 

 

(4

)

Net income attributable to noncontrolling interests, net of cash distributions

 

1,344

 

891

 

Management fees (b) 

 

484

 

170

 

Non-cash expenses (c) 

 

1,065

 

723

 

Sale-lease back adjustments (d) 

 

(449

)

(303

)

Acquisition-related costs (e) 

 

1,310

 

4,491

 

Other expenses (f) 

 

483

 

1,828

 

Litigation settlement (g) 

 

1,941

 

757

 

Tradename / rebranding initiative (h) 

 

 

342

 

Expenses associated with idle / closed treatment facilities (i) 

 

 

1,201

 

Pro-forma full period effect of acquisition EBITDA (a) 

 

 

742

 

 

 

 

 

 

 

Pro-forma Adjusted EBITDA (1) 

 

$

43,684

 

$

31,346

 

 

 

 

 

 

 

Pro-forma Adjusted EBITDA as a percentage of total pro-forma revenues

 

15.7

%

12.9

%

 


(1) Pro-forma Adjusted EBITDA is defined as income (loss) before interest expense (net of interest income), income taxes, depreciation and amortization, net income attributable to noncontrolling interests, net of cash distributions, gain on the sale of an interest in a joint venture, loss on sale leaseback transaction, early extinguishment of debt, fair value adjustment of earn-out liability, fair value adjustment of embedded derivative, impairment loss, foreign currency derivative contract loss (gain), management fees accrued to our sponsor, non-cash expenses including costs relating to stock compensation, amortization of straight-line rent and amortization of capital expenditures relating to repairs and maintenance, non-cash equipment rent, sale-lease back adjustments, acquisition-related costs, other expenses including loss on sale of assets, severance payments related to termination of employee staff reductions, tail premiums on termed physicians, franchise taxes, costs relating to consulting services on Medicare reimbursement, litigation settlements with physicians, costs associated with tradename and rebranding initiatives, expenses associated with idle / closed radiation therapy treatment facilities and pro-forma full period effect of acquisition EBITDA.

 

(a) Pro-forma amounts related to adjustments to total revenues and Pro-forma Adjusted EBITDA to reflect the full period effect of our acquisitions and Value Added Services contracts completed during 2015 and 2014.  The adjustments reflect the impact to our total revenues and Pro-forma Adjusted EBITDA as if the acquisitions and Value Added Services contracts had occurred at the beginning of the year.

 

(b) Management fees are fees accrued to our sponsor, Vestar Capital Partners.

 

(c) Non-cash expenses including costs relating to stock compensation, amortization of straight-line rent, amortization of capital expenditures relating to warranty arrangements amortized to repairs and maintenance and non-cash equipment rent.

 

(d) Sale-lease back adjustments relates to the adjustment of benefit derived from the classification of operating leases as finance obligations reflecting a reclassification of interest expense and depreciation and amortization expense as rent expense.

 

(e) Acquisition related costs associated with ASC 805, “Business Combinations”, including professional fees, corporate development, integration and due diligence costs relating to the acquisition of medical practices.

 



 

(f) Other expenses include loss on sale of assets, severance payments related to termination of employee staff reductions, tail premiums paid on terminated physicians, franchise taxes and costs relating to consulting services on Medicare reimbursement.

 

(g) Litigation settlement relates to costs associated with the termination of physicians and loss contingency reserves related to the Medicare diagnostic testing matter.

 

(h) Expenses related to the costs associated with the Company’s tradename and rebranding initiatives.

 

(i) Expenses associated with idle / closed radiation therapy treatment facilities.

 

We believe the Pro-forma Adjusted EBITDA provides useful information about our financial performance to investors, lenders, financial analysts and rating agencies since these groups have historically used EBITDA-related measures in the healthcare industry, along with other measures, to estimate the value of a company, to make informed investment decisions, to evaluate a company’s leverage capacity and its ability to meet its debt service requirements.  Pro-forma Adjusted EBITDA eliminates the uneven effect of non-cash depreciation of tangibles assets and amortization of intangible assets, much of which results from acquisitions accounted for under the purchase method of accounting.  Pro-forma Adjusted EBITDA is also used by us to measure individual performance for incentive compensation purposes and as an analytical indicator for purposes of allocating resources to our operating business and assessing their performance, both internally and relative to our peers, as well as to evaluate the performance of our operating management teams, and for purposes in the calculation of debt covenants and related disclosures.

 

Pro-forma Adjusted EBITDA is not intended as a substitute for net income (loss) attributable to 21st Century Oncology Holdings, Inc.

shareholder, operating cash flows or other cash flow data determined in accordance with accounting principles generally accepted in the United States. Due to varying methods of calculation, Pro-forma Adjusted EBITDA as presented may not be comparable to similarly titled measures of other companies.

 



 

21ST CENTURY ONCOLOGY HOLDINGS, INC.

KEY OPERATING STATISTICS

(unaudited)

 

 

 

Three Months Ended

 

 

 

 

 

March 31,

 

%

 

United States

 

2015

 

2014

 

Change

 

 

 

 

 

 

 

 

 

Number of treatment days

 

63

 

63

 

 

 

 

 

 

 

 

 

 

 

Total RVUs - freestanding centers

 

4,287,889

 

3,793,809

 

13.0

%

 

 

 

 

 

 

 

 

RVUs per day - freestanding centers

 

68,062

 

60,219

 

13.0

%

 

 

 

 

 

 

 

 

Percentage change in RVUs per day - freestanding centers - same store basis

 

7.7

%

0.8

%

 

 

 

 

 

 

 

 

 

 

Total treatments - freestanding centers

 

211,086

 

191,993

 

9.9

%

 

 

 

 

 

 

 

 

Treatments per day - freestanding centers

 

3,351

 

3,048

 

9.9

%

 

 

 

 

 

 

 

 

Percentage change in revenue per treatment - freestanding centers - same store basis

 

0.6

%

3.2

%

 

 

 

 

 

 

 

 

 

 

Percentage change in treatments per day - freestanding centers - same store basis

 

3.9

%

3.4

%

 

 

 

 

 

 

 

 

 

 

Percentage change in freestanding revenues - same store basis

 

4.6

%

6.8

%

 

 

 

 

 

 

 

 

 

 

Total radiation oncology cases completed *

 

7,863

 

7,629

 

3.1

%

 

 

 

 

 

 

 

 

Revenue per radiation oncology case

 

$

17,862

 

$

18,258

 

 

 

 

 

 

 

 

 

 

 

Radiation therapy centers - freestanding (global)

 

171

 

173

 

-1.2

%

Radiation therapy centers - professional / other (global)

 

11

 

12

 

-8.3

%

 

 

 

 

 

 

 

 

Total radiation therapy centers

 

182

 

185

 

-1.6

%

 

 

 

 

 

 

 

 

Days sales outstanding at quarter end

 

36

 

35

 

 

 

 

 

 

 

 

 

 

 

Net patient service revenue (global) - professional services only (in thousands)

 

$

86,709

 

$

70,859

 

 

 

 

 

 

 

 

 

 

 

Net patient service revenue (global) - excluding physician practice expense (in thousands)

 

$

278,261

 

$

235,547

 

 

 

 


*       Total cases completed represents a count of patients that have completed their course of treatment. Total case counts are based on legacy and acquired clinical systems.

 

 

 

Three Months Ended

 

 

 

 

 

March 31,

 

%

 

International

 

2015

 

2014

 

Change

 

 

 

 

 

 

 

 

 

Total number of new cases

 

4,501

 

4,281

 

5.1

%

 

 

 

 

 

 

 

 

Revenue per radiation oncology case

 

$

6,509

 

$

4,946