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| 8-K - FORM 8-K - LINCARE HOLDINGS INC | d8k.htm |
Exhibit 99.1
Lincare Holdings Inc. Announces Second Quarter and First Half 2011 Financial Results
Press Release Source: Lincare Holdings Inc. On Monday July 18, 2011, 4:30 pm
CLEARWATER, Fla., July 18, 2011 (GLOBE NEWSWIRE) — Lincare Holdings Inc. (Nasdaq:LNCR - News) today announced financial results for the three and six months ended June 30, 2011.
For the quarter ended June 30, 2011, net revenues were $449.0 million, a 7.3% increase over net revenues of $418.4 million for the second quarter of 2010. The Company estimates that the 7.3% increase in net revenues in the second quarter of 2011 was comprised of approximately 12.3% internal and acquisition growth offset by approximately 5.0% negative impact from $21.0 million of Medicare payment changes during the second quarter of 2011. The Medicare payment changes impacting the quarter include reductions in average payment rates for respiratory medications, the impact of new Medicare payment rates in the nine markets affected by the competitive bidding program, and the ongoing effect of Medicare oxygen customers reaching the 36-month rental payment cap. Net income for the quarter ended June 30, 2011, was $42.8 million, a 7.9% decrease compared with net income of $46.4 million for the second quarter of 2010. Diluted earnings per share were $0.45 for the quarter ended June 30, 2011, a 4.3% decrease compared with diluted earnings per share of $0.47 for the comparable prior year period.
Net revenues for the six months ended June 30, 2011, were $880.6 million, a 6.3% increase over net revenues of $828.4 million for the comparable period in 2010. The Company estimates that the 6.3% increase in net revenues in the first six months of 2011 was comprised of approximately 10.9% internal and acquisition growth offset by approximately 4.6% negative impact from $37.7 million of Medicare payment changes impacting the first six months of this year. Net income for the six months ended June 30, 2011, was $89.1 million, a 1.0% decrease compared with net income of $90.1 million for the first half of 2010. Diluted earnings per share were $0.94 for the six months ended June 30, 2011, a 2.0% increase over diluted earnings per share of $0.92 for the comparable period last year.
John P. Byrnes, Lincare’s Chief Executive Officer, said, “We made steady progress in the first half of 2011 in executing certain new strategic initiatives that will provide future expansion for our business. As described in our first quarter earnings release, we purchased a specialty pharmacy provider in February of this year and are pleased with the integration of that acquisition. We are seeing strong market demand for our anti-coagulation testing business, and are pleased to announce that we now have approximately 10,000 customers using this service. We have also completed acquisitions of companies that are contracted to provide home oxygen services in seven of nine competitive bidding markets and positive airway pressure therapy in eight of nine markets. We are awaiting final approval by the Centers for Medicare and Medicaid Services (CMS) of the assignment of those contracts.”
Lincare added 13 new operating centers in the second quarter derived from internal expansion. The total number of Lincare locations expanded to 1,106 as of June 30, 2011.
In addition to the ongoing effects of the Medicare payment changes in 2011, the Company incurred higher costs and expenses in the second quarter of 2011 compared with the first three months of this year. These include higher costs of goods sold of $18.1 million attributed to increases in specialty pharmacy drug volumes and other non-rental items, such as inhalation drugs and CPAP supplies, and increases in certain operating and other expenses attributable in part to the expansion of new strategic business lines.
Lincare generated $131.8 million of cash from operating activities during the first six months of 2011 and invested $57.7 million in net capital expenditures and $73.0 million in business acquisitions. The Company repurchased 1.7 million shares of its common stock for $50.0 million, with all repurchases occurring in the first quarter of 2011.
Common shares outstanding at June 30, 2011 were 94,773,075. As of June 30, 2011, total long term obligations, including current installments, were $532.8 million and cash and investments were $122.1 million.
Lincare, headquartered in Clearwater, Florida, is one of the nation’s largest providers of respiratory therapy and other services to patients in the home. The Company provides services and equipment to more than 790,000 customers in 48 states.
Statements in this release concerning future results, performance or expectations are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. All forward-looking statements included in this document are based upon information available to Lincare as of the date hereof and Lincare assumes no obligation to update any such forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause Lincare’s actual results, levels of activity, performance or achievements to be materially different from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statements. In some cases, forward-looking statements that involve risks and uncertainties contain terminology such as “may,” “will,” “should,” “could,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or variations of these terms or other comparable terminology.
Key factors that have an impact on Lincare’s ability to attain any estimates contained in this release include potential reductions in reimbursement rates by government and other third party payors, changes in reimbursement policies, the demand for Lincare’s products and services, the availability of appropriate acquisition candidates and Lincare’s ability to successfully complete and integrate acquisitions, efficient operation of Lincare’s existing and future operating facilities, regulation and/or regulatory action affecting Lincare or its business, economic and competitive conditions, access to borrowed and/or equity capital on favorable terms and other risks described in the filings of Lincare with the Securities and Exchange Commission.
In developing its forward-looking statements, Lincare has made certain assumptions relating to reimbursement rates and policies, internal growth and acquisitions and the outcome of various legal and regulatory proceedings. If the assumptions used by Lincare differ materially from what actually occurs, then actual results could vary significantly from the performance projected in the forward-looking statements. Lincare is under no duty to update any of the forward-looking statements after the date of this release.
LINCARE HOLDINGS INC. AND SUBSIDIARIES
Financial Summary
(In thousands, except share and per share data)
(Unaudited)
| For the three months ended |
||||||||
| June 30, 2011 |
June 30, 2010 |
|||||||
| Net revenues |
$ | 449,033 | $ | 418,366 | ||||
| Cost and expenses: |
||||||||
| Costs of goods and services |
142,300 | 113,589 | ||||||
| Operating expenses |
102,189 | 99,673 | ||||||
| Selling, general and administrative expenses |
85,495 | 84,280 | ||||||
| Bad debt expense |
8,981 | 6,275 | ||||||
| Depreciation and amortization expense |
29,987 | 29,397 | ||||||
| Operating income |
80,081 | 85,152 | ||||||
| Interest expense, net |
9,148 | 8,874 | ||||||
| Income before income taxes |
70,933 | 76,278 | ||||||
| Income taxes |
28,168 | 29,863 | ||||||
| Net income |
$ | 42,765 | $ | 46,415 | ||||
| Basic earnings per common share |
$ | 0.46 | $ | 0.48 | ||||
| Diluted earnings per common share |
$ | 0.45 | $ | 0.47 | ||||
| Dividends declared per common share |
$ | 0.20 | $ | 0.20 | ||||
| Weighted average number of common shares outstanding |
92,096,018 | 96,080,021 | ||||||
| Weighted average number of common shares and common share equivalents outstanding |
94,988,981 | 98,676,500 | ||||||
| For the six months ended | ||||||||
| June 30, 2011 |
June 30, 2010 |
|||||||
| Net revenues |
$ | 880,600 | $ | 828,406 | ||||
| Cost and expenses: |
||||||||
| Costs of goods and services |
266,509 | 224,515 | ||||||
| Operating expenses |
204,096 | 198,200 | ||||||
| Selling, general and administrative expenses |
168,374 | 168,331 | ||||||
| Bad debt expense |
17,612 | 12,426 | ||||||
| Depreciation and amortization expense |
59,304 | 58,923 | ||||||
| Operating income |
164,705 | 166,011 | ||||||
| Interest expense, net |
18,203 | 17,715 | ||||||
| Income before income taxes |
146,502 | 148,296 | ||||||
| Income taxes |
57,360 | 58,245 | ||||||
| Net income |
$ | 89,142 | $ | 90,051 | ||||
| Basic earnings per common share |
$ | 0.96 | $ | 0.94 | ||||
| Diluted earnings per common share |
$ | 0.94 | $ | 0.92 | ||||
| Dividends declared per common share |
$ | 0.40 | $ | 0.20 | ||||
| Weighted average number of common shares outstanding |
92,534,565 | 95,896,262 | ||||||
| Weighted average number of common shares and common share equivalents outstanding |
95,290,690 | 98,165,238 | ||||||
LINCARE HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
| June 30, 2011 |
December 31, 2010 |
|||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 82,146 | $ | 164,203 | ||||
| Short-term investments |
40,000 | 40,000 | ||||||
| Restricted cash |
0 | 345 | ||||||
| Accounts receivable, net |
233,409 | 186,001 | ||||||
| Income tax receivable |
2,460 | 9,443 | ||||||
| Inventories |
15,388 | 13,276 | ||||||
| Prepaid and other current assets |
7,499 | 3,542 | ||||||
| Deferred income taxes |
24,842 | 26,488 | ||||||
| Total current assets |
405,744 | 443,298 | ||||||
| Property and equipment, net |
337,036 | 338,778 | ||||||
| Goodwill and Other Assets |
1,368,388 | 1,265,755 | ||||||
| Total assets |
$ | 2,111,168 | $ | 2,047,831 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
||||||||
| Current installments of long-term obligations |
$ | 21,230 | $ | 619 | ||||
| Accounts payable |
56,728 | 64,078 | ||||||
| Accrued expenses: |
||||||||
| Compensation and benefits |
31,815 | 39,500 | ||||||
| Liability insurance |
16,316 | 19,052 | ||||||
| Other current liabilities |
54,361 | 51,501 | ||||||
| Total current liabilities |
180,450 | 174,750 | ||||||
| Long-term obligations, excluding current installments |
511,564 | 494,271 | ||||||
| Deferred income taxes and other taxes |
404,305 | 381,061 | ||||||
| Total liabilities |
1,096,319 | 1,050,082 | ||||||
| Commitments and contingencies |
||||||||
| Stockholders’ equity: |
||||||||
| Common stock |
948 | 963 | ||||||
| Additional paid-in capital |
696,342 | 681,988 | ||||||
| Retained earnings |
317,559 | 314,798 | ||||||
| Total stockholders’ equity |
1,014,849 | 997,749 | ||||||
| Total liabilities and stockholders’ equity |
$ | 2,111,168 | $ | 2,047,831 | ||||
Contact:
Paul G. Gabos
(727) 530-7700