Attached files

file filename
8-K - 8-K - 21st Century Oncology Holdings, Inc.a13-23738_18k.htm

Exhibit 99.1

 

 

RADIATION THERAPY SERVICES HOLDINGS, INC.

 

Contact:

Bryan J. Carey

Chief Financial Officer

239-931-7285

BCarey@rtsx.com

 

Investors:

Nick Laudico

The Ruth Group

646-536-7030

NLaudico@theruthgroup.com

 

RADIATION THERAPY SERVICES REPORTS

THIRD QUARTER 2013 FINANCIAL RESULTS

 

Third Quarter 2013 Highlights:

 

·                  Total revenues of $181.0 million, up 8.1% year-over-year

·                  Same-market treatments per day increased 6.4%, including recent  acquisitions complimented by expansion of ICC model and Physician Liaison program which resulted in organic treatments per day growth of 3.7%

·                  International revenues of $24.6 million, up 19.1% year-over-year

·                  Pro Forma Adjusted EBITDA of $23.2 million

 

Recent Business Highlights:

 

·                  Completed the acquisition of OnCure Holdings, Inc. (“Oncure”) in October, adding significant scale and opportunity for cost synergies and revenue growth

·                  Received $50 million in additional term commitments utilized for the acquisition of Oncure and to further support other growth initiatives

·                  Signed contract extending relationship with Northern Westchester Hospital for an additional 8 years

·                  Entered value added services agreement with Mercy Medical Center, part of Dignity Health, to provide oncology services to the hospital in strategic Redding, California market

·                  Closed acquisition of Tijuana, Mexico facility; on schedule to re-launch with advanced technologies by 1Q 2014

 

FORT MYERS, FL, November 6, 2013 — Radiation Therapy Services Holdings, Inc (“Radiation Therapy” or “the Company”), a leading operator of radiation therapy centers, announced today its financial results for the third quarter ended September 30, 2013.

 

Dr. Daniel Dosoretz, President and Chief Executive Officer, commented, “The third quarter results reflect the strength of our model and the revenue and EBITDA growth our strategy is designed to achieve.  It is a direct result of our organic growth initiatives such as our Physician Liaison and ICC programs along the upside these programs provide to same-market acquisitions and joint ventures. We are extremely pleased with this performance, especially in the face of the approximately 9% CMS RVU cuts for 2013. From a volume perspective, domestic same-market treatments per day, which include same market acquisitions, grew by 6.4% year-over-year, with organic treatments per day increasing 3.7%. Additionally, our International business has

 



 

performed incredibly well in the quarter, producing 19.1% year-over-year revenue growth driven by use of more sophisticated treatment modalities and we believe is positioned for a strong 2014.

 

He continued, “We are especially pleased to have closed the acquisition of Oncure which is a transformational event for the Company and the largest acquisition in our history. We believe Oncure provides a key component to accelerating our long term growth initiatives. The purchase results in a substantial increase in scale by adding 25% more locations, excellent physician resources, strengthened leadership position in existing markets and a significant presence in new markets, where we intend to quickly take steps to expand via our integrated cancer care model.

 

Dr. Dosoretz concluded, “We believe we are approaching 2014 with significant momentum, driven by growth in census and a strong business model. We believe our evolution over the past decade into a global, physician—led provider of integrated cancer care services positions us well for continued and sustainable long-term growth. We have also proven that our model is efficient and capable of driving value in a healthcare environment that demands the highest quality care at a predictable and affordable cost. Now more than ever, we have the strategy, integrated model, resources and leadership to accelerate our growth into 2014 and beyond.”

 

Third Quarter 2013 Results

 

Total revenues for the third quarter of 2013 were $181.0 million, compared to $167.5 million in revenues in the same quarter of 2012, an increase of 8.1%. The increase in revenue was principally due to increased domestic census, accretive joint ventures and acquisitions, one more treatment day than in the third quarter of 2012 and international revenue growth, offset by lower reimbursement rates.

 

Domestic total treatments per day increased 6.4% in the third quarter of 2013, which includes treatment volume from our same market acquisition of Premiere/SIU. This was driven by expansion of our integrated cancer care model, growth in total treatments and increased referrals through the Company’s physician liaison program. Domestic same practice therapy revenue per treatment decreased 4.2% from the third quarter of 2012, primarily due to reductions in the CMS reimbursement rates, partially offset by improvements in treatment mix and managed care pricing. Total RVUs per day at same practice domestic freestanding centers decreased 1.9% in the third quarter versus the same period of the prior year due to reductions in the reimbursement rates.

 

Adjusted earnings before interest, taxes, depreciation, amortization, stock-based compensation and other non-cash and pro forma items (“Pro Forma Adjusted EBITDA”) in the third quarter of 2013 was $23.2 million, or 12.8% of total pro forma revenues, compared to $22.6 million, or 13.5% of total pro forma revenues, in the third quarter of 2012. Pro Forma Adjusted EBITDA margins declined in the current quarter versus the prior year period primarily due to reductions in the Medicare reimbursement rate, the growth in establishing integrated cancer care practices, and investments made in key personnel. A reconciliation of net loss attributable to Radiation Therapy Services Holdings, Inc., 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 September 30, 2013 and 2012 is included in the attached supplemental financial information.

 



 

Income tax expense in the third quarter of 2013 was $1.7 million, compared to the same income tax expense in the third quarter of 2012.  The net loss for the third quarter of 2013 was $25.1 million, compared to a net loss of $90.5 million in the third quarter of 2012.

 

Recent Developments

 

In October, the Company completed the acquisition of Oncure for approximately $125.0 million, including $42.5 million in cash and up to $82.5 million in assumed debt ($7.5 million of this assumed debt is subject to escrow conditions and will be released assuming certain Oncure centers achieve a minimum level of EBITDA). This transformative event is the largest acquisition in the Company’s history and increases the number of radiation centers by over 25%. The strategic addition is expected to provide operating synergies, broaden the Company’s ability to provide integrated cancer care across a larger spectrum and offer significant revenue upside potential.

 

In August, Radiation Therapy amended its $140 million revolving credit facility creating additional capacity to execute its long term growth strategy. The amendment reduces the overall revolving loan to $100 million. An additional $50 million was combined with the $40 million balance of revolving credit facility into a newly formed $90 million term loan. The additional term loan commitments were used to fund the acquisition of Oncure. The revolver and term loan each have a maturity date of October 15, 2016.

 

In July, Radiation Therapy signed a contract to extend its relationship with Northern Westchester Hospital in Westchester County, NY for an additional 8 years. As a result the Company will continue to provide advanced technical and administrative services to the hospital, continuing its longstanding partnership to serve patients in the region.

 

In September, the Company signed a value added services agreement with Mercy Medical Center in Redding, CA, part of Dignity Health, to provide oncology services. This agreement adds to Radiation Therapy’s presence in the strategic market of California, where the Company also recently expanded operations through its acquisition of Oncure.

 

The Company’s plan to upgrade its newly acquired Tijuana, Mexico facility by installing advanced radiation oncology technology is moving forward as planned. The Company anticipates opening the center during the first quarter of 2014.

 

Conference Call

 

Management will host a conference call on Thursday, November 7, 2013 at 11:00 a.m. ET to discuss its financial results. 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 November 21, 2013.  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 13572587 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.rtsx.com.

 



 

About Radiation Therapy Services Holdings, Inc.

 

Radiation Therapy Services 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. The Company operates 166 treatment centers, including 133 centers located in 16 U.S. states. The Company also operates 33 centers located in six countries in Latin America. The Company holds market leading positions in most of its domestic local markets and abroad.

 

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 2013 and the effects of the CMS’s Final Rule for the 2014Physician 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.

 



 

RADIATION THERAPY SERVICES HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

 

 

 

September 30,

 

December 31,

 

 

 

2013

 

2012

 

 

 

(unaudited)

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

32,469

 

$

15,410

 

Restricted cash

 

5,002

 

 

Accounts receivable, net

 

97,337

 

86,869

 

Prepaid expenses

 

7,898

 

6,043

 

Inventories

 

4,647

 

3,897

 

Deferred income taxes

 

981

 

540

 

Other

 

8,445

 

7,429

 

Total current assets

 

156,779

 

120,188

 

 

 

 

 

 

 

Equity investments in joint ventures

 

684

 

575

 

Property and equipment, net

 

217,575

 

221,050

 

Real estate subject to finance obligation

 

20,704

 

16,204

 

Goodwill

 

503,908

 

485,859

 

Intangible assets, net

 

30,816

 

35,044

 

Other assets

 

38,097

 

43,381

 

Total assets

 

$

968,563

 

$

922,301

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

38,030

 

$

27,538

 

Accrued expenses

 

63,974

 

46,401

 

Income taxes payable

 

2,769

 

2,951

 

Current portion of long-term debt

 

12,333

 

11,065

 

Current portion of finance obligation

 

298

 

287

 

Other current liabilities

 

5,014

 

7,684

 

Total current liabilities

 

122,418

 

95,926

 

Long-term debt, less current portion

 

837,810

 

751,303

 

Finance obligation, less current portion

 

22,089

 

16,905

 

Other long-term liabilities

 

25,007

 

22,130

 

Deferred income taxes

 

5,055

 

6,202

 

Total liabilities

 

1,012,379

 

892,466

 

 

 

 

 

 

 

Noncontrolling interests - redeemable

 

15,933

 

11,368

 

 

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

Common stock, $0.01 par value, 1,028 shares authorized, issued and outstanding

 

 

 

Additional paid-in capital

 

650,680

 

651,907

 

Retained deficit

 

(703,312

)

(638,023

)

Accumulated other comprehensive loss, net of tax

 

(20,432

)

(11,464

)

Total Radiation Therapy Services Holdings, Inc. shareholder’s (deficit) equity

 

(73,064

)

2,420

 

Noncontrolling interests - nonredeemable

 

13,315

 

16,047

 

Total (deficit) equity

 

(59,749

)

18,467

 

Total liabilities and equity

 

$

968,563

 

$

922,301

 

 



 

RADIATION THERAPY SERVICES HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands)

(unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Net patient service revenue

 

$

178,655

 

$

165,385

 

$

526,475

 

$

519,432

 

Other revenue

 

2,385

 

2,131

 

6,651

 

5,783

 

Total revenues

 

181,040

 

167,516

 

533,126

 

525,215

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

Salaries and benefits

 

98,032

 

87,190

 

293,972

 

276,199

 

Medical supplies

 

15,917

 

15,686

 

46,166

 

47,785

 

Facility rent expenses

 

11,427

 

10,119

 

32,285

 

29,634

 

Other operating expenses

 

11,882

 

10,001

 

33,155

 

28,663

 

General and administrative expenses

 

24,936

 

19,076

 

68,832

 

60,059

 

Depreciation and amortization

 

16,059

 

16,697

 

46,550

 

48,140

 

Provision for doubtful accounts

 

3,767

 

5,425

 

8,857

 

15,286

 

Interest expense, net

 

21,952

 

20,027

 

62,369

 

57,182

 

Gain on the sale of an interest in a joint venture

 

 

 

(1,460

)

 

Early extinguishment of debt

 

 

 

 

4,473

 

Fair value adjustment of earn-out liability

 

 

1,261

 

 

1,261

 

Impairment loss

 

 

69,946

 

 

69,946

 

Loss on foreign currency transactions

 

364

 

140

 

1,166

 

234

 

Loss on foreign currency derivative contracts

 

67

 

786

 

309

 

1,006

 

Total expenses

 

204,403

 

256,354

 

592,201

 

639,868

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

(23,363

)

(88,838

)

(59,075

)

(114,653

)

Income tax expense

 

1,699

 

1,705

 

4,849

 

3,254

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

(25,062

)

(90,543

)

(63,924

)

(117,907

)

 

 

 

 

 

 

 

 

 

 

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

 

(347

)

(842

)

(1,365

)

(3,231

)

 

 

 

 

 

 

 

 

 

 

Net loss attributable to Radiation Therapy Services Holdings, Inc. shareholder

 

(25,409

)

(91,385

)

(65,289

)

(121,138

)

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

Unrealized loss on derivative interest rate swap agreements

 

 

 

 

(333

)

Unrealized loss on foreign currency translation

 

(4,228

)

(2,109

)

(9,817

)

(5,129

)

Other comprehensive loss

 

(4,228

)

(2,109

)

(9,817

)

(5,462

)

 

 

 

 

 

 

 

 

 

 

Comprehensive loss:

 

(29,290

)

(92,652

)

(73,741

)

(123,369

)

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

 

(25

)

(717

)

(516

)

(2,797

)

Comprehensive loss attributable to Radiation Therapy Services Holdings, Inc. shareholder

 

$

(29,315

)

$

(93,369

)

$

(74,257

)

$

(126,166

)

 



 

RADIATION THERAPY SERVICES HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2013

 

2012

 

Cash flows from operating activities

 

 

 

 

 

Net loss

 

$

(63,924

)

$

(117,907

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

Depreciation

 

40,062

 

39,310

 

Amortization

 

6,488

 

8,830

 

Deferred rent expense

 

636

 

895

 

Deferred income taxes

 

(1,989

)

(1,095

)

Stock-based compensation

 

481

 

3,221

 

Provision for doubtful accounts

 

8,857

 

15,286

 

Loss on the sale/disposal of property and equipment

 

212

 

8

 

Gain on the sale of an interest in a joint venture

 

(1,460

)

 

Amortization of termination of interest rate swap

 

 

958

 

Write-off of loan costs

 

 

525

 

Early extinguishment of debt

 

 

4,473

 

Termination of derivative interest rate swap agreements

 

 

(972

)

Impairment loss

 

 

69,946

 

Loss on foreign currency transactions

 

137

 

17

 

Loss on foreign currency derivative contracts

 

309

 

1,006

 

Amortization of debt discount

 

703

 

608

 

Amortization of loan costs

 

4,128

 

4,065

 

Equity interest in net loss of joint ventures

 

425

 

681

 

Distribution received from unconsolidated joint ventures

 

 

9

 

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable and other current assets

 

(25,578

)

(18,852

)

Income taxes payable

 

343

 

(2,541

)

Inventories

 

(591

)

(156

)

Prepaid expenses

 

194

 

632

 

Accounts payable and other current liabilities

 

12,591

 

(4,069

)

Accrued deferred compensation

 

1,019

 

1,009

 

Accrued expenses / other current liabilities

 

19,519

 

17,229

 

 

 

 

 

 

 

Net cash provided by operating activities

 

2,562

 

23,116

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

Purchase of property and equipment

 

(25,109

)

(24,179

)

Acquisition of medical practices

 

(24,250

)

(24,057

)

Purchase of noncontrolling interest - non-redeemable

 

(1,509

)

 

Restricted cash associated with initial deposit in the potential acquisition of medical practices

 

(5,002

)

 

Proceeds from the sale of property and equipment

 

64

 

2,988

 

Loans to employees

 

(559

)

(81

)

Contribution of capital to joint venture entities

 

(542

)

(497

)

Proceeds from the sale of equity interest in a joint venture

 

1,460

 

 

Payment of foreign currency derivative contracts

 

(171

)

(543

)

Premiums on life insurance policies

 

(901

)

(963

)

Change in other assets and other liabilities

 

(53

)

115

 

 

 

 

 

 

 

Net cash used in investing activities

 

(56,572

)

(47,217

)

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

Proceeds from issuance of debt

 

207,650

 

435,663

 

Principal repayments of debt

 

(133,917

)

(376,087

)

Repayments of finance obligation

 

(142

)

(81

)

Proceeds from noncontrolling interest holders - redeemable and non-redeemable

 

765

 

 

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

 

(1,896

)

(3,196

)

Payments of loan costs

 

(1,359

)

(14,437

)

 

 

 

 

 

 

Net cash provided by financing activities

 

71,101

 

41,862

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

(32

)

(4

)

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

17,059

 

17,757

 

Cash and cash equivalents, beginning of period

 

15,410

 

10,177

 

 

 

 

 

 

 

Cash and cash equivalents, end of period

 

$

32,469

 

$

27,934

 

 

 

 

 

 

 

Supplemental disclosure of noncash transactions

 

 

 

 

 

Finance obligation related to real estate projects

 

$

5,337

 

$

2,068

 

Capital lease obligations related to the purchase of equipment

 

$

79

 

$

5,618

 

Noncash dividend declared to noncontrolling interest

 

$

140

 

$

231

 

Noncash deconsolidation of noncontrolling interest

 

$

9

 

$

 

Property and equipment related to the North Broward Hospital District license agreement

 

$

 

$

4,260

 

Capital lease obligations related to the acquisition of medical practices

 

$

8,748

 

$

5,746

 

Seller financing promissory note related to the acquisition of medical practices

 

$

2,097

 

$

 

Seller liability payable related to the acquisition of a medical practice

 

$

400

 

$

 

Noncash contribution of capital by noncontrolling interest holders

 

$

4,235

 

$

 

Termination of prepaid services by noncontrolling interest holder

 

$

2,551

 

$

 

Issuance of notes payable relating to the earn-out liability in the acquisition of Medical Developers

 

$

2,679

 

$

 

Issuance of equity LLC units relating to the earn-out liability in the acquisition of Medical Developers

 

$

705

 

$

 

 


 


 

RADIATION THERAPY SERVICES HOLDINGS, INC.

Supplemental Financial Information (Unaudited)

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

to Radiation Therapy Services Holdings, Inc. Shareholder

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

(in thousands): 

 

2013

 

2012

 

2013

 

2012

 

Total revenues

 

$

181,040

 

$

167,516

 

$

533,126

 

$

525,215

 

Pro-forma full period effect of acquisitions (a) 

 

114

 

 

35,288

 

8,178

 

Total pro-forma revenues

 

$

181,154

 

$

167,516

 

$

568,414

 

$

533,393

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to Radiation Therapy Services Holdings, Inc. shareholder

 

$

(25,409

)

$

(91,385

)

$

(65,289

)

$

(121,138

)

Income tax expense

 

1,699

 

1,705

 

4,849

 

3,254

 

Interest expense, net

 

21,952

 

20,027

 

62,369

 

57,182

 

Depreciation and amortization

 

16,059

 

16,697

 

46,550

 

48,140

 

Gain on the sale of an interest in a joint venture

 

 

 

(1,460

)

 

Early extinguishment of debt

 

 

 

 

4,473

 

Fair value adjustment of earn-out liability

 

 

1,261

 

 

1,261

 

Impairment loss

 

 

69,946

 

 

69,946

 

Loss on foreign currency derivative contracts

 

67

 

786

 

309

 

1,006

 

Management fees (b) 

 

225

 

244

 

706

 

785

 

Non-cash expenses (c) 

 

1,039

 

715

 

3,189

 

4,640

 

Sale-lease back adjustments (d) 

 

(357

)

(248

)

(1,017

)

(737

)

Acquisition-related costs (e) 

 

3,498

 

571

 

7,302

 

2,316

 

Other expenses (f) 

 

1,942

 

644

 

4,297

 

1,538

 

Litigation settlement (g) 

 

338

 

952

 

1,858

 

2,053

 

Costs associated with the provision for income taxes (h) 

 

 

 

 

532

 

Tradename / rebranding initiative (i) 

 

370

 

206

 

711

 

523

 

Expenses associated with idle / closed treatment facilities (j) 

 

1,152

 

494

 

2,130

 

1,972

 

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

 

639

 

 

8,303

 

3,686

 

Pro-forma Adjusted EBITDA (1) 

 

$

23,214

 

$

22,615

 

$

74,807

 

$

81,432

 

 

 

 

 

 

 

 

 

 

 

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

 

12.8

%

13.5

%

13.2

%

15.3

%

 



 


(1) Pro-forma Adjusted EBITDA is defined as income (loss) before interest expense (net of interest income), income taxes, depreciation and amortization, gain on the sale of an interest in a joint venture, early extinguishment of debt, fair value adjustment of earn-out liability, 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, expenses associated with the provision for income taxes, 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 2013 and 2012. 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 during 2012 and 2013.

 

(h) Expenses related to the costs associated with process improvements in the provision for income taxes.

 

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

 

(j) 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 Radiation Therapy Services 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.

 



 

RADIATION THERAPY SERVICES HOLDINGS, INC.

KEY OPERATING STATISTICS

(unaudited)

 

 

 

Three Months Ended

 

 

 

Nine Months Ended

 

 

 

 

 

September 30,

 

%

 

September 30,

 

%

 

Domestic U.S.

 

2013

 

2012

 

Change

 

2013

 

2012

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of treatment days

 

64

 

63

 

1.6

%

191

 

191

 

0.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total RVU’s - freestanding centers

 

2,767,016

 

2,775,821

 

(0.3

)%

8,313,913

 

8,677,857

 

(4.2

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RVU’s per day - freestanding centers

 

43,235

 

44,061

 

(1.9

)%

43,528

 

45,434

 

(4.2

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage change in RVU’s per day - freestanding centers - same market basis

 

(1.9

)%

(5.0

)%

 

 

(4.8

)%

(5.1

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total treatments - freestanding centers

 

128,765

 

119,167

 

8.1

%

386,574

 

372,488

 

3.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Treatments per day - freestanding centers

 

2,012

 

1,892

 

6.4

%

2,024

 

1,950

 

3.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

(4.2

)%

(3.0

)%

 

 

(5.9

)%

(3.1

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

6.4

%

3.6

%

 

 

3.2

%

3.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of regions at period end (global)

 

9

 

9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of local markets at period end

 

28

 

28

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Treatment centers - freestanding (global)

 

127

 

121

 

5.0

%

 

 

 

 

 

 

Treatment centers - hospital / other groups (global)

 

5

 

5

 

0.0

%

 

 

 

 

 

 

 

 

132

 

126

 

4.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Days sales outstanding at quarter end

 

35

 

39

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage change in freestanding revenues — same market basis

 

3.5

%

(1.1

)%

 

 

(2.9

)%

(0.5

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

54,338

 

$

48,239

 

 

 

$

159,816

 

$

150,066

 

 

 

 

 

 

Three Months Ended

 

 

 

Nine Months Ended

 

 

 

 

 

September 30,

 

%

 

September 30,

 

%

 

International

 

2013

 

2012

 

Change

 

2013

 

2012

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of new cases

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2-D cases

 

931

 

1,153

 

 

 

2,868

 

3,603

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3-D cases

 

2,855

 

2,262

 

 

 

7,639

 

6,589

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IMRT / IGRT cases

 

590

 

346

 

 

 

1,396

 

1,125

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

4,376

 

3,761

 

16.4

%

11,903

 

11,317

 

5.2

%

 

###