Gentiva® Health Services Reports Fourth Quarter and Full-Year 2013 Results

04 Mar, 2014, 07:00 ET from Gentiva Health Services, Inc.

ATLANTA, March 4, 2014 /PRNewswire/ -- Gentiva Health Services, Inc. (NASDAQ: GTIV), one of the largest providers of home health, hospice and community care services in the United States, today reported fourth quarter and full-year 2013 results. 

Gentiva acquired Harden Healthcare Holdings, Inc. ("Harden") on October 18, 2013.  The Company's fourth quarter and full-year 2013 results included Harden's financial results from its acquisition date. 

Additionally, during the fourth quarter of 2013, the Company announced a corporate restructuring initiative, referred to as "One Gentiva", to better align its home health, hospice and community care businesses under a common regional management structure and streamline the Company's management organization to meet reimbursement challenges.  The corporate restructuring resulted in the closure of 46 branches during the fourth quarter of 2013.  Additionally, the Company consolidated 31 overlapping branches as part of the integration of the Harden acquisition.  

Full-year 2013 financial highlights include:

  • Total net revenues of $1.73 billion.
  • Loss attributable to Gentiva shareholders per diluted share of $18.75,  including the impact of charges associated with the Company's One Gentiva initiative and the Harden acquisition, and an impairment of the Company's goodwill and other long-lived assets.
  • Adjusted income attributable to Gentiva shareholders per diluted share of $0.42.
  • Adjusted EBITDA of $135.0 million.

Fourth quarter 2013 financial highlights include: 

  • Total net revenues of $486.1 million, an increase of 14% compared to $425.0 million for the quarter ended December 31, 2012.  Net revenues included home health episodic revenues of $225.9 million, an increase of 8% compared to $209.8 million in the 2012 fourth quarter.  Hospice revenues were $180.8 million, a decrease of 3% compared to $187.3 million in the 2012 fourth quarter.  Community Care revenues were $45.6 million from the Harden acquisition date through year-end 2013.
  • Net loss attributable to Gentiva shareholders of $401.9 million, or $11.46 per diluted share, compared to net income of $8.6 million, or $0.28 per diluted share, for the fourth quarter of 2012.  During the  fourth quarter of 2013, the Company recorded non-cash impairment charges of $386.1 million based on an impairment of the Company's goodwill and other long-lived assets that was performed during the quarter.
  • Adjusted loss attributable to Gentiva shareholders of $4.9 million, compared with income of $9.7 million in the comparable 2012 period. On a diluted per share basis, adjusted loss attributable to Gentiva shareholders was $0.14 for the fourth quarter of 2013 as compared to adjusted income attributable to Gentiva shareholders of  $0.31 for the fourth quarter of 2012.
  • Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) was $21.6 million in the fourth quarter of 2013 as compared to $44.2 million in the fourth quarter of 2012.  Adjusted EBITDA as a percentage of net revenues was 4.4% in the fourth quarter of 2013 versus 10.4% in the prior year period. 

Adjusted (loss) income attributable to Gentiva shareholders and Adjusted EBITDA exclude charges related to restructuring, legal settlements, acquisition and integration activities, losses on closed locations and other special items.

Highlights for the full-year 2013 include: 

  • Total net revenues of $1.73 billion, an increase of 1% compared to $1.71 billion for the prior year period. Net revenues included home health episodic revenues of $846.9 million, an increase of 2% as compared to $834.2 million in the comparable 2012 period.  Hospice revenues were $715.2 million, a decrease of 6% compared to $764.8 million in the comparable 2012 period.  Community Care revenues were $45.6 million from the Harden acquisition date through year-end 2013.
  • Net loss attributable to Gentiva shareholders of $599.0 million, or $18.75 per diluted share, compared to net income of $26.8 million, or $0.87 per diluted share, in the prior year period. For the full-year 2013, the Company recorded non-cash impairment charges of $610.4 million based on impairment of the Company's goodwill and other long-lived assets. 
  • Adjusted income attributable to Gentiva shareholders of $13.8 million, compared with $37.7 million in the 2012 period. On a diluted per share basis, adjusted income attributable to Gentiva shareholders was $0.42 for 2013 as compared with $1.23 in the corresponding period of 2012. 
  • Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) was $135.0 million as compared to $180.5 million in the 2012 period.  Adjusted EBITDA as a percentage of net revenues was 7.8% versus 10.5% in the prior year period.

Cash Flow and Balance Sheet Highlights

During the fourth quarter of 2013, Gentiva entered into a new $925 million senior secured credit facility as part of the Harden transaction.  The Company used the new credit facility and available cash to fund the cash portion of the Harden purchase price during the fourth quarter of 2013. 

At December 31, 2013, the Company reported cash and cash equivalents of $87.0 million, down from $183.3 million at September 30, 2013.  Total outstanding debt was $1.18 billion as of December 31, 2013, compared to $910.2 million at September 30, 2013. Total Company days sales outstanding, or DSO's, was 49 days at December 31, 2013, down from 50 days at September 30, 2013.

For the fourth quarter of 2013, net cash provided by operating activities was $18.5 million, compared to  $51.3 million in the prior year period.  Free cash flow was $13.7 million for the fourth quarter of 2013, compared to $48.8 million in the prior year period.  

Full-year 2013 free cash flow was $18.0 million.  Free cash flow is calculated as net cash provided by operating activities less capital expenditures.

Full-Year 2014 Outlook Comments

For 2014, Gentiva expects full-year net revenues to be in the range of $1.9 billion to $2.1 billion and adjusted income attributable to Gentiva shareholders to be in the range of $0.85 to $1.15 on a diluted per share basis.

Gentiva's 2014 outlook includes the full-year impact of its Harden acquisition and the final 2014 Medicare  home health and hospice reimbursement rates issued by the Centers for Medicare and Medicaid Services (CMS).  The 2014 outlook excludes any ongoing losses from closed locations as the operations are wound down.

Non-GAAP Financial Measures

The information provided in this press release includes certain non-GAAP financial measures as defined under Securities and Exchange Commission (SEC) rules. In accordance with SEC rules, the Company has provided, in the supplemental information and the footnotes to the tables, a reconciliation of those historical measures to the most directly comparable GAAP measures.

A reconciliation of adjusted income attributable to Gentiva shareholders to net income, the most directly comparable GAAP measure, is not accessible on a forward-looking basis without unreasonable effort due to the inherent difficulties in predicting the costs of restructuring, legal settlements and merger and acquisition activities, the results of discontinued operations and the impact of any future acquisitions or divestitures, which can fluctuate significantly and may have a significant impact on net income.

Conference Call and Webcast Details

The Company will comment further on its fourth quarter and full-year 2013 results during its conference call and live webcast to be held today, Tuesday, March 4, 2014 at 9:00 a.m. Eastern Time. To participate in the call from the United States, Canada or an international location, dial (973) 935-2408 and reference call #71298142. The webcast is an audio-only, one-way event. Webcast listeners who wish to ask questions must participate in the conference call. Log onto http://investors.gentiva.com/events.cfm to hear the webcast. A replay of the call will be available on March 4 and will remain available continuously through March 11. To listen to a replay of the call from the United States, Canada or international locations dial (800) 585-8367 or (404) 537-3406 and enter the following PIN at the prompt: 71298142. Visit http://investors.gentiva.com/events.cfm to access the webcast archive. This press release is accessible at http://investors.gentiva.com/releases.cfm and a transcript of the conference call will be posted on the Company's website.

About Gentiva Health Services, Inc.

Gentiva Health Services, Inc. is one of the nation's largest providers of home health, hospice and community care services, delivering innovative, high quality care to patients across the United States. Gentiva is a single source for skilled nursing; physical, occupational, speech and neurorehabilitation services; hospice services; social work; nutrition; disease management education; help with daily living activities; and other therapies and services. GTIV-G

(unaudited tables and notes follow)

 

Gentiva Health Services, Inc. and Subsidiaries

Condensed Consolidated Financial Statements and Supplemental Information

(Unaudited)

(in 000's, except per share data)

4th Quarter

Fiscal Year

2013

2012

2013

2012

Condensed Statements of Comprehensive (Loss) Income

Net revenues

$

486,137

$

425,017

$

1,726,644

$

1,712,804

Cost of services sold

281,182

229,254

942,180

908,741

Gross profit

204,955

195,763

784,464

804,063

Selling, general and administrative expenses

(219,082)

(156,924)

(701,716)

(655,766)

Goodwill, intangibles and other long-lived asset impairment

(386,116)

(610,436)

(19,132)

Gain on sale of businesses

2,567

8,014

Interest income

638

650

2,704

2,661

Interest expense and other

(44,239)

(23,546)

(113,088)

(92,608)

(Loss) income before income taxes and equity in net loss of

CareCentrix

(443,844)

18,510

(638,072)

47,232

Income tax benefit (expense)

42,022

(6,373)

39,565

(17,251)

Equity in net loss of CareCentrix

(3,307)

(2,301)

Net (loss) income

(401,822)

8,830

(598,507)

27,680

Less: Net income attributable to noncontrolling interests

(62)

(260)

(487)

(884)

Net (loss) income attributable to Gentiva shareholders

$

(401,884)

$

8,570

$

(598,994)

$

26,796

Total comprehensive (loss) income

$

(401,822)

$

8,830

$

(598,507)

$

27,680

Earnings per Share

Net (loss) income attributable to Gentiva shareholders:

   Basic

$

(11.46)

$

0.28

$

(18.75)

$

0.88

   Diluted

$

(11.46)

$

0.28

$

(18.75)

$

0.87

Weighted average shares outstanding:

   Basic

35,054

30,548

31,954

30,509

   Diluted

35,054

30,891

31,954

30,687

 

 

(in 000's)

Condensed Balance Sheets

ASSETS

Dec 31, 2013

Dec 31, 2012

Cash and cash equivalents

$

86,957

$

207,052

Accounts receivable, net (A)

289,905

251,080

Deferred tax assets

28,153

12,263

Prepaid expenses and other current assets

64,746

45,632

Total current assets

469,761

516,027

Notes receivable from CareCentrix

28,471

28,471

Fixed assets, net

49,375

41,414

Intangible assets, net

256,282

193,613

Goodwill

390,081

656,364

Other assets

68,647

75,045

Total assets

$

1,262,617

$

1,510,934

LIABILITIES AND EQUITY

Current portion of long-term debt

$

45,325

$

25,000

Accounts payable

15,659

13,445

Payroll and related taxes

64,857

45,357

Deferred revenue

43,864

37,444

Medicare liabilities

23,894

27,122

Obligations under insurance programs

82,634

56,536

Accrued nursing home costs

22,219

18,428

Other accrued expenses

77,018

66,567

Total current liabilities

375,470

289,899

Long-term debt

1,124,432

910,182

Deferred tax liabilities, net

9,825

42,165

Other liabilities

53,084

33,988

Total equity

(300,194)

234,700

Total liabilities and equity

$

1,262,617

$

1,510,934

Common shares outstanding

36,375

30,748

(A) Accounts receivable, net included an allowance for doubtful accounts of $10.7 million and $8.8 million at December 31, 2013 and December 31, 2012, respectively.

 

 

(in 000's)

Fiscal Year

Condensed Statements of Cash Flows

2013

2012

OPERATING ACTIVITIES:

Net (loss) income

$

(598,507)

$

27,680

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

Depreciation and amortization

20,110

26,580

Amortization of debt issuance costs

14,715

13,761

Write-off of debt issuance costs

16,085

Provision for doubtful accounts

6,730

4,066

Equity-based compensation expense

8,210

7,645

Windfall tax benefits associated with equity-based compensation

(119)

(88)

Goodwill, intangibles and other long-lived asset impairment

610,436

19,132

Gain on sale of businesses, net

(8,014)

Equity in net loss of CareCentrix

2,301

Deferred income tax (benefit) expense

(36,660)

23,513

Changes in assets and liabilities, net of effects from acquisitions and dispositions:

Accounts receivable

910

34,882

Prepaid expenses and other current assets

(17,966)

(15,447)

Current liabilities

7,163

(15,979)

Other, net

5,998

5,936

Net cash provided by operating activities

37,105

125,968

INVESTING ACTIVITIES:

Purchase of fixed assets

(19,075)

(11,779)

Proceeds from sale of businesses, net of cash transferred

508

9,220

Proceeds from the sale of assets

203

Acquisition of businesses, net of cash acquired

(359,435)

(22,335)

Net cash used in investing activities

(377,799)

(24,894)

FINANCING ACTIVITIES:

Proceeds from issuance of common stock

3,231

3,980

Windfall tax benefits associated with equity-based compensation

119

88

Proceeds from issuance of debt

817,525

Borrowings under revolving credit facility

27,000

Payment of contingent consideration accrued at acquisition date

(1,675)

Repayment of long-term debt

(610,182)

(52,943)

Repurchase of common stock

(4,974)

Debt issuance costs

(15,187)

(4,125)

Minority interest capital contribution

1,600

Distribution to minority interests

(750)

(825)

Other

(1,082)

(135)

Net cash provided by (used in) financing activities

220,599

(58,934)

Net change in cash and cash equivalents

(120,095)

42,140

Cash and cash equivalents at beginning of period

207,052

164,912

Cash and cash equivalents at end of period

$

86,957

$

207,052

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Interest paid

$

75,880

$

78,783

Income taxes paid

$

1,057

$

4,375

Fiscal Year

A reconciliation of Free cash flow to Net cash provided by operating activities follows:

2013

2012

Net cash provided by operating activities

$

37,105

$

125,968

Less: Purchase of fixed assets

(19,075)

(11,779)

Free cash flow

$

18,030

$

114,189

 

 

(in 000's)

Supplemental Information

4th Quarter

Fiscal Year

2013

2012

2013

2012

Segment Information (2)

Net revenues

Home Health

$

259,707

$

237,698

$

965,848

$

948,019

Hospice

180,824

187,319

715,190

764,785

Community Care

45,606

45,606

Total net revenues

$

486,137

$

425,017

$

1,726,644

$

1,712,804

Operating contribution (4)

Home Health

$

21,782

$

30,918

$

113,809

$

125,445

Hospice

2,587

30,707

78,810

133,133

Community Care

6,385

6,385

Total operating contribution

30,754

61,625

199,004

258,578

Corporate administrative expenses

(38,703)

(17,580)

(96,146)

(83,700)

Goodwill, intangibles and other long-lived asset impairment (5)

(386,116)

(610,436)

(19,132)

Depreciation and amortization

(6,178)

(5,206)

(20,110)

(26,581)

Gain on sale of businesses (6)

2,567

8,014

Interest expense and other, net (7)

(43,601)

(22,896)

(110,384)

(89,947)

(Loss) income before income taxes and equity in net loss of

CareCentrix

$

(443,844)

$

18,510

$

(638,072)

$

47,232

Home Health operating contribution margin %

8.4%

13.0%

11.8%

13.2%

Hospice operating contribution margin %

1.4%

16.4%

11.0%

17.4%

Community Care operating contribution margin %

14.0%

—%

14.0%

—%

4th Quarter

Fiscal Year

Net Revenues by Major Payer Source:

2013

2012

2013

2012

Medicare

Home Health

$

209,647

$

187,291

$

787,333

$

749,042

Hospice

169,104

176,524

667,901

715,514

Total Medicare

378,751

363,815

1,455,234

1,464,556

Medicaid and local government

62,242

17,551

116,607

74,424

Commercial insurance and other:

Paid at episodic rates

16,235

22,472

59,557

85,200

Other

28,909

21,179

95,246

88,624

Total commercial insurance and other

45,144

43,651

154,803

173,824

Total net revenues

$

486,137

$

425,017

$

1,726,644

$

1,712,804

4th Quarter

Fiscal Year

A reconciliation of Adjusted EBITDA to Net (loss) income attributable

to Gentiva shareholders follows:

2013

2012

2013

2012

Adjusted EBITDA (3)

$

21,571

$

44,246

$

134,962

$

180,548

Cost savings, restructuring, legal settlement and acquisition and integration costs (4)

(24,955)

(201)

(27,539)

(5,670)

Impact of closed locations

(4,565)

(4,565)

Goodwill, intangibles and other long-lived asset impairment (5)

(386,116)

(610,436)

(19,132)

Gain on sale of businesses (6)

2,567

8,014

EBITDA (4)

(394,065)

46,612

(507,578)

163,760

Depreciation and amortization

(6,178)

(5,206)

(20,110)

(26,581)

Interest expense and other, net (7)

(43,601)

(22,896)

(110,384)

(89,947)

(Loss) income before income taxes and equity in net loss of CareCentrix

(443,844)

18,510

(638,072)

47,232

Income tax benefit (expense) (8)

42,022

(6,373)

39,565

(17,251)

Equity in net loss of CareCentrix

(3,307)

(2,301)

Net (loss) income

(401,822)

8,830

(598,507)

27,680

Less: Net income attributable to noncontrolling interests

(62)

(260)

(487)

(884)

Net (loss) income attributable to Gentiva shareholders

$

(401,884)

$

8,570

$

(598,994)

$

26,796

 

 

A reconciliation of Adjusted (loss) income attributable to Gentiva shareholders to Net (loss) income (all items presented are net of tax): (3)

4th Quarter

Fiscal Year

2013

2012

2013

2012

Adjusted (loss) income attributable to Gentiva shareholders

$

(4,901)

$

9,686

$

13,757

$

37,679

Cost savings, restructuring, legal settlement and acquisition and

integration costs (4)

(16,277)

(139)

(17,847)

(3,385)

Goodwill, intangibles and other long-lived asset impairment (5)

(366,453)

(580,651)

(11,352)

Impact of closed locations

(2,442)

(2,442)

Gain on sale of businesses (6)

1,516

4,765

Write-off of prepaid debt issuance costs

(11,811)

(11,811)

Equity in net loss of CareCentrix

(3,307)

(2,301)

Tax valuation allowance on OIG legal settlement

814

1,390

(Loss) income attributable to Gentiva shareholders

(401,884)

8,570

(598,994)

26,796

Add back: Net income attributable to noncontrolling interests

62

260

487

884

Net (loss) income

$

(401,822)

$

8,830

$

(598,507)

$

27,680

Adjusted (loss) income attributable to Gentiva shareholders

per diluted share

$

(0.14)

$

0.31

$

0.42

$

1.23

Cost savings, restructuring, legal settlement and acquisition and

integration costs (4)

(0.46)

(0.56)

(0.11)

Goodwill, intangibles and other long-lived asset impairment (5)

(10.45)

(18.17)

(0.37)

Impact of closed locations

(0.07)

(0.07)

Gain on sale of businesses (6)

0.05

0.16

Write-off of prepaid debt issuance costs

(0.34)

(0.37)

Equity in net loss of CareCentrix

(0.11)

(0.08)

Tax valuation allowance on OIG legal settlement

0.03

0.04

(Loss) income attributable to Gentiva shareholders per

diluted share

(11.46)

0.28

(18.75)

0.87

Add back: Net income attributable to noncontrolling interests

0.01

0.02

0.03

Net (loss) income per diluted share

$

(11.46)

$

0.29

$

(18.73)

$

0.90

Operating Metrics

4th Quarter

Fiscal Year

2013

2012

2013

2012

Home Health

Episodic admissions

52,300

49,300

199,000

198,000

Total episodes

79,300

71,900

293,200

287,800

Episodes per admission

1.52

1.46

1.47

1.45

Revenue per episode

$

2,850

$

2,920

$

2,890

$

2,900

Hospice

Admissions

13,000

12,600

50,500

51,500

Average daily census

13,500

13,200

12,900

13,600

Patient days (in thousands)

1,243

1,213

4,711

4,959

Revenue per patient day (a)

$

145

$

155

$

152

$

154

Length of stay at discharge (in days)

107

105

100

96

Services by patient type:

Routine

98%

98%

98%

98%

General Inpatient & Other

2%

2%

2%

2%

Community Care

Billed hours (in thousands)

3,600

3,600

Revenue per hour

$

13

$

$

13

$

(a) Revenue per patient day for Q4, 2013, includes approximately $6.9 million of hospice billing revenue adjustments. Excluding this adjustment, the revenue per patient day would be $151.

 

 

Notes:

1.

The comparability between reporting periods has been affected by the following items:

a.

The Company completed several acquisitions, including the Harden transaction on October 18, 2013, and closed a significant number of branch operations, affecting the reporting periods presented. As a result of these activities, the Company's net revenues comparisons were positively impacted for both the fourth quarter and full-year 2013 by approximately $91 million as compared to the corresponding periods of 2012.

2.

The Company's senior management evaluates performance and allocates resources based on operating contributions of the operating segments, which exclude corporate expenses, depreciation, amortization, interest income, and interest expense and other, but includes revenue and all other costs directly attributable to the specific segment. 

3.

Adjusted EBITDA, a non-GAAP financial measure, is defined as income before interest expense and other (net of interest income), income taxes, depreciation and amortization and excluding charges relating to (i) cost savings, restructuring, legal settlements, and acquisition and integration activities, (ii) EBITDA impact of closed locations, (iii) goodwill, intangibles and other long-lived asset impairment and (iv) gain on sale of businesses. Management uses Adjusted EBITDA to evaluate overall performance and compare current operating results with other companies in the healthcare industry. Adjusted EBITDA should not be considered in isolation or as a substitute for income from continuing operations, net income, operating income or cash flow statement data determined in accordance with accounting principles generally accepted in the United States. Since Adjusted EBITDA is not a measure of financial performance under accounting principles generally accepted in the United States and is susceptible to varying calculations, it may not be comparable to similarly titled measures in other companies.

Adjusted income attributable to Gentiva shareholders is defined as Adjusted EBITDA attributable to Gentiva shareholders, excluding (i) tax reserves relating to the OIG settlement, (ii) equity in net loss of CareCentrix and (iii) write-off of prepaid debt issuance costs.

4.

Operating contribution and EBITDA included charges relating to cost savings initiatives, legal settlements and acquisition and integration activities of $25.0 million and $27.5 million for the fourth quarter and full year 2013, respectively. For the fourth quarter and full year 2012, the Company recorded charges of $0.2 million and $5.7 million, respectively.

For the fourth quarter and full year 2013, the Company recorded charges associated with cost savings initiatives of $8.5 million and $8.7 million, respectively. For the fourth quarter and full year 2013, acquisition and integration activities of $16.5 million and $18.8 million, respectively, primarily related to the Company's acquisition of Harden. These costs consisted of legal, accounting and other professional fees and expenses.

For the fourth quarter and full year 2012, the Company recorded charges associated with cost savings initiatives of $0.2 million and $1.7 million, respectively. For the full year 2012, the Company recorded legal settlement reserves of $5.0 million, associated with the tentative settlement of the Wilkie wage and hour lawsuit, partially offset by a reduction in cost savings charges of $1.0 million, primarily relating to favorable lease settlements associated with the Company's branch closures.

These charges were reflected as follows for segment reporting purposes (dollars in millions):

 

4th Quarter

Fiscal Year

2013

2012

2013

2012

Home Health

$

3.2

$

$

3.3

$

5.6

Hospice

7.6

0.3

8.2

0.4

Community Care

Corporate expenses

14.2

(0.1)

16.0

(0.3)

Total

$

25.0

$

0.2

$

27.5

$

5.7

 

5.

During the full year 2013, the Company recorded non-cash charges of $610.4 million related to goodwill, intangibles and other long-lived assets. The Company performed its annual impairment test as of December 31, 2013 for its Home Health, Hospice and Community Care reporting units. Based on this assessment, for the year ended December 31, 2013, the Company recorded a non-cash impairment charge associated with its Hospice reporting unit of approximately $386.1 million.

At March 31, 2013, the Company performed an interim impairment test of its Hospice reporting unit due to lower than expected average daily census and higher than expected discharge rates during the quarter. Based on the results of the interim impairment test, the Company recorded a non-cash impairment charge relating to goodwill of approximately $220.8 million. As part of that analysis, the Company reviewed the valuation of its owned real estate utilized in the Hospice business. The analysis indicated that two of the Company's hospice inpatient units had estimated fair values lower than their carrying values and, as such, the Company recorded a non-cash impairment charge of approximately $1.9 million.

In addition, the Company conducted an evaluation of the various systems used to support its field operations. In connection with that review, the Company made a strategic decision to replace its business intelligence software platform and, as such, recorded a non-cash impairment charge, related to developed software, of approximately $1.6 million.

During the third quarter of 2012, the Company initiated an effort to re-brand all of its branch operations under the single Gentiva name. In connection with this re-branding effort, the Company recorded a $19.1 million non-cash write-off of existing trade name balances for the year 2012.

6.

During the fourth quarter of 2012, the Company completed the sale of its Phoenix area hospice operations to Banner Health, an Arizona non-profit corporation, pursuant to an asset purchase agreement for cash consideration of $3.5 million.

During the second quarter of 2012, the Company completed the sale of eight home health branches and four hospice branches in Louisiana, pursuant to an asset purchase agreement, for total consideration of approximately $6.4 million. The Company received proceeds of approximately $5.9 million for the full year 2012 and established a receivable of approximately $0.5 million, which the Company received during the second quarter of 2013. 

Effective May 31, 2012, the Company completed the sale of its Gentiva consulting business to MP Healthcare Partners, LLC pursuant to an asset purchase agreement, for cash consideration of approximately $0.3 million.

In connection with the sales, the Company recorded a gain on sale of businesses of approximately $2.6 million and $8.0 million for the fourth quarter and full year 2012, respectively.

7.

Interest expense and other for the year 2013 and 2012 included charges of approximately $19.1 million and $0.5 million, respectively, relating to the write-off of deferred debt issuance costs and fees associated with the Company entering a new credit agreement, dated October 18, 2013 and for the 2012 period, write-off of deferred debt issuance costs related to Amendment No. 3 to the Company's former credit agreement.

8.

The Company's effective tax rate was a tax benefit of 9.5% and 6.2% for the fourth quarter and full year 2013, respectively, as compared to a tax provision of 34.4% and 36.5% for the fourth quarter and full year 2012, respectively. The Company's effective tax rate for adjusted income from continuing operations was a tax provision of 41.0% and 41.3% for the fourth quarter and full year 2013, respectively, as compared to 38.4% and 39.8% for the fourth quarter and full year 2013, respectively.

 

Forward-Looking Statements

Certain statements contained in this news release, including, without limitation, statements containing the words "believes," "anticipates," "intends," "expects," "assumes," "trends" and similar expressions, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based upon the Company's current plans, expectations and projections about future events. However, such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These factors include, among others, the following: economic and business conditions; demographic changes; changes in, or failure to comply with, existing governmental regulations; the impact on our Company of healthcare reform legislation and its implementation through governmental regulations; legislative proposals for healthcare reform; changes in Medicare, Medicaid and commercial payer reimbursement levels; the outcome of any inquiries into the Company's operations and business practices by governmental authorities; compliance with any corporate integrity agreement affecting the Company's operations; effects of competition in the markets in which the Company operates; liability and other claims asserted against the Company; ability to attract and retain qualified personnel; ability to access capital markets; availability and terms of capital; loss of significant contracts or reduction in revenues associated with major payer sources; ability of customers to pay for services; business disruption due to severe weather conditions, natural disasters, pandemic outbreaks, terrorist acts or cyber-attacks; availability, effectiveness, stability and security of the Company's information technology systems; ability to successfully integrate the operations of acquisitions the Company may make and achieve expected synergies and operational efficiencies within expected time-frames; ability to maintain compliance with its financial covenants under the Company's credit agreement; effect on liquidity of the Company's debt service requirements; and changes in estimates and judgments associated with critical accounting policies and estimates. For a detailed discussion of certain of these and other factors that could cause actual results to differ from those contained in this news release, please refer to the Company's various filings with the Securities and Exchange Commission, including the "Risk Factors" section contained in the Company's annual report on Form 10-K for the year ended December 31, 2012.

 

Financial and Investor Contact:

Eric Slusser

770-951-6101

eric.slusser@gentiva.com

or 

John Mongelli

770-951-6496

john.mongelli@gentiva.com

Media Contact:

Scott Cianciulli

Brainerd Communicators

212-986-6667

cianciulli@braincomm.com

 

SOURCE Gentiva Health Services, Inc.



RELATED LINKS

http://www.gentiva.com