EX-99.1 2 g10694exv99w1.htm EX-99.1 PRESS RELEASE DATED NOVEMBER 14, 2007 EX-99.1
 

Exhibit 99.1
(AMERICAN HOMEPATIENT LOGO)
             
Contact:
  Joseph F. Furlong
President and CEO
(615) 221-8884 		  or   Stephen L. Clanton
Executive VP & CFO
(615) 221-8884
Primary Contact
          For Immediate Release
AMERICAN HOMEPATIENT REPORTS FINANCIAL RESULTS FOR
THE THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2007
 
BRENTWOOD, Tenn. (November 14, 2007) — American HomePatient, Inc. (OTCBB: AHOM), one of the nation’s largest home health care providers, today announced its financial results for the third quarter and nine months ended September 30, 2007.
Revenues for the third quarter of 2007 were $71.3 million compared to $80.4 million for the third quarter of 2006, representing a decrease of $9.1 million, or 11.3%. Revenues for the nine months ended September 30, 2007 were $221.6 million compared to $238.7 million for the same period in 2006, representing a decrease of $17.1 million, or 7.2%. A significant portion of the revenue decrease for the third quarter and nine months is due to a decrease in revenues associated with non-focus product lines, such as durable medical equipment and infusion therapy. Also contributing to the decrease in revenues was the effect of Company initiatives implemented in late 2006 to improve patient co-pay collections and provide appropriate service levels to patients. The Company believes most of the revenue lost as a result of these initiatives was unprofitable. The Company’s revenue was also negatively affected in the current year by temporary disruptions in certain sales and marketing processes during the Company’s recent implementation of various operational initiatives, which have resulted in improved operating efficiencies and reduced costs. In addition, Medicare reimbursement reductions implemented in 2007 associated with the Deficit Reduction Act of 2005 resulted in a decrease in revenues of $0.8 million and $1.6 million for the three months and nine months ended September 30, 2007, respectively.

 

 

Operating expenses declined in the third quarter of 2007 compared to the third quarter of 2006 by approximately $2.5 million, or 6.8%. Operating expenses for the nine months ended September 30, 2007 compared to the same period in 2006 declined by $9.6 million, or 8.4%. These decreases are primarily the result of improved operating efficiencies and the resulting reduced costs.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) is a non-GAAP financial measurement that is calculated as net income excluding interest, taxes, depreciation and amortization. Adjusted EBITDA (EBITDA excluding discontinued operations and certain one-time charges discussed below) for the third quarter of 2007 was $13.1 million compared to $12.8 million for the third quarter of 2006, representing an increase of 2.3%. For the first nine months of 2007, adjusted EBITDA was $39.0 million compared to $34.5 million for the same period in 2006, representing an increase of 13.0%. The improvement in adjusted EBITDA in the current year is primarily the result of improved operating efficiencies.
Net income for the third quarter of 2007 was $0.1 million, or $0.01 per diluted share, compared to a net loss of $(1.0) million, or $(0.06) per diluted share, for the third quarter of 2006. Net loss for the nine months ended September 30, 2007 was $(5.2) million, or $(0.29) per diluted share, compared to a net loss of $(4.0) million, or $(0.23) per diluted share, for the same period of 2006. The comparison of net loss for the nine months of 2007 compared to the same period of 2006 was negatively affected by expenses associated with a change of control and positively affected by the recognition of discontinued operations. Also affecting the comparison of net loss in the current year to the prior year was the recording of non-cash income tax expense of $2.4 million related to a deferred tax liability associated with indefinite-lived intangible assets. Excluding these items, the Company would have had net income of $0.6 million, or $0.04 per diluted share for the nine months ended September 30, 2007. The increase in net income compared to the prior year is related primarily to the previously mentioned operational improvements.
Effective April 1, 2007, the Company sold the assets of its home nursing business located in Tallahassee, Florida to Amedisys Home Health, Inc. of Florida. The Company recorded a gain of $3.0 million for the nine months ended September 30, 2007 associated with the sale. With

 

 

this sale, the Company has exited its home nursing line of business, and therefore the financial results of the home nursing business and the gain on the sale have been reflected in discontinued operations in the Company’s financial statements for 2007 and 2006.
American HomePatient, Inc. is one of the nation’s largest home health care providers with operations in 33 states. Its product and service offerings include respiratory services, infusion therapy, parenteral and enteral nutrition, and medical equipment for patients in their home. American HomePatient, Inc.’s common stock is currently traded in the over-the-counter market or, on application by broker-dealers, in the NASD’s Electronic Bulletin Board under the symbol AHOM or AHOM.OB.
American HomePatient, Inc. prepares its financial statements in accordance with U.S. generally accepted accounting principles (GAAP). American HomePatient, Inc. also provides information related to non-GAAP financial measurements such as EBITDA and adjusted EBITDA, and from time to time, other non-GAAP financial measurements that adjust for certain items outside of the ordinary course of its business. To enable interested parties to reconcile non-GAAP measures to the Company’s GAAP financial statements, the Company clearly defines EBITDA and adjusted EBITDA and quantifies all other adjustments to GAAP measurements (see Schedule B). The Company provides EBITDA information, a widely used non-GAAP financial measurement, as a performance measure to assist in analyzing the Company’s operations and in comparing the Company to its competitors. The Company provides other non-GAAP financial measurements that adjust for certain items outside of the ordinary course of business in order to assist in comparing the Company’s current operating performance to its historical performance. These adjustments typically reflect non-recurring items but sometimes reflect items, such as dispositions of assets and restructuring charges that are not technically non-recurring but are outside of the ordinary course of operations. Investors should note that such measures may not be comparable to similarly titled measures used by other companies, and investors are encouraged to use this information only in connection with the information contained in the Company’s GAAP financial statements.
Certain statements made in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management’s current expectations and include known and unknown risks, uncertainties and other factors, many of which the Company is unable to predict or control,

 

 

that may cause the Company’s actual results or performance to materially differ from any future results or performance expressed or implied by such forward-looking statements. These statements involve risks and uncertainties, including, without limitation, risks and uncertainties regarding current and future reimbursement rates, as well as reimbursement reductions and the Company’s ability to mitigate the impact of the reductions. These risks and uncertainties are in addition to risks, uncertainties, and other factors detailed from time to time in the Company’s filings with the Securities and Exchange Commission. The Company cautions investors that any forward-looking statements made by the Company are not necessarily indicative of future performance. The Company is not responsible for updating the information contained in this press release beyond the published date, or for changes made to this document by wire services or Internet services.

 

 

     
American HomePatient, Inc.
Summary Financial Data
(In thousands, except per share data) 		  Schedule A
                                 
    Three Months Ended September 30,     Nine Months Ended September 30,  
    2007     2006     2007     2006  
    (unaudited)     (unaudited)  
Revenues, net
   $ 71,291     $ 80,419     $ 221,558     $ 238,673  
Cost of sales and related services
     15,834       20,777       55,072       61,397  
Cost of rentals and other revenues, including rental equipment depreciation
     10,301       12,777       31,372       34,312  
Operating expenses
     34,896       37,423       104,347       113,975  
Bad debt expense
     2,341       2,533       6,914       8,065  
General and administrative expenses
     4,586       4,396       13,976       13,040  
Depreciation, excluding rental equipment, and amortization
     842       915       2,375       2,769  
Interest expense, net
     4,014       4,297       12,073       12,988  
Other income, net
     (476 )     (349 )     (1,528 )     (477 )
Change of control (income) expense
     (1,012 )     —       5,577       —  
Earnings from unconsolidated joint ventures
     (1,368 )     (1,203 )     (4,214 )     (3,811 )
 
                        
 
                                
Income (loss) from continuing operations before reorganization items and income taxes
     1,333       (1,147 )     (4,406 )     (3,585 )
 
                                
Reorganization items
     —       33       —       284  
 
                                
 
                        
Income (loss) from continuing operations before income taxes
     1,333       (1,180 )     (4,406 )     (3,869 )
 
                                
Provision for income taxes
     1,229       87       2,901       261  
 
                                
 
                        
Net income (loss) from continuing operations
     104       (1,267 )     (7,307 )     (4,130 )
 
                        
 
                                
Discontinued operations:
                                
Income from discontinued operations, including gain on disposal
     24       228       2,130       161  
 
                                
 
                        
Net income (loss)
   $ 128     $ (1,039 )   $ (5,177 )   $ (3,969 )
 
                        
 
                                
Basic income (loss) per common share — Continuing operations
   $ 0.01     $ (0.07 )   $ (0.41 )   $ (0.24 )
Basic income per common share — Discontinued operations
     —       0.01       0.12       0.01  
 
                        
Basic income (loss) per common share
   $ 0.01     $ (0.06 )   $ (0.29 )   $ (0.23 )
 
                        
 
                                
Diluted income (loss) per common share — Continuing operations
   $ 0.01     $ (0.07 )   $ (0.41 )   $ (0.24 )
Diluted income per common share — Discontinued operations
     —       0.01       0.12       0.01  
 
                        
Diluted income (loss) per common share
   $ 0.01     $ (0.06 )   $ (0.29 )   $ (0.23 )
 
                        
                 
    September 30,     December 31,  
    2007     2006  
    (unaudited)  
Cash and cash equivalents
   $ 22,155     $ 6,786  
Restricted cash
     250       650  
Net patient receivables
     43,669       53,711  
Other receivables
     626       603  
 
            
Total receivables
     44,295       54,314  
Net inventories
     10,836       12,288  
Other current assets
     11,247       4,430  
 
            
Total current assets
     88,783       78,468  
Property and equipment, net
     41,589       51,411  
Goodwill
     121,834       121,834  
Other assets
     22,780       24,958  
 
            
Total Assets
   $ 274,986     $ 276,671  
 
            
 
                
Accounts payable
   $ 17,560     $ 19,345  
Current portion of long-term debt and capital leases
     10,819       1,063  
Other current liabilities
     31,269       26,720  
 
            
Total current liabilities
     59,648       47,128  
 
                
Long-term debt and capital leases, less current portion
     238,234       250,194  
Deferred tax liability
     2,365       —  
Other noncurrent liabilities
     51       47  
 
            
Total liabilities
     300,298       297,369  
 
                
Minority interest
     509       618  
 
                
Total shareholders’ deficit
     (25,821 )     (21,316 )
 
            
Total Liabilities and Shareholders’ Deficit
   $ 274,986     $ 276,671  
 
            

 

 

     
American HomePatient, Inc.
Reconciliation of Non-GAAP Financial Measurements to GAAP Financial Statements
(In thousands) 		Schedule B
                                 
    Three Months Ended September 30,     Nine Months Ended September 30,  
    2007     2006     2007     2006  
    (unaudited)     (unaudited)  
Net income (loss)
   $ 128     $ (1,039 )   $ (5,177 )   $ (3,969 )
Add:
                                
Provision for income taxes
     1,229       87       2,901       261  
Interest expense, net
     4,014       4,297       12,073       12,988  
Rental equipment depreciation
     7,965       8,789       23,337       22,629  
Other depreciation and amortization
     842       915       2,375       2,769  
 
                        
Earnings before interest, taxes, depreciation, and amortization (EBITDA)
   $ 14,178     $ 13,049     $ 35,509     $ 34,678  
 
                        
Change of control (income) expense (Note A)
     (1,012 )     —       5,577       —  
Discontinued operations (Note B)
     (24 )     (228 )     (2,130 )     (161 )
     
Adjusted EBITDA
   $ 13,142     $ 12,821     $ 38,956     $ 34,517  
     
 
Note A: Change of control (income) expense should be excluded to determine adjusted EBITDA calculation, as the item is non-recurring.
Note B: Discontinued operations should be excluded to determine adjusted EBITDA, as the gain on disposal is non-recurring.