American HomePatient Reports Financial Results for the Second Quarter and Six Months Ended June 30, 2006.BRENTWOOD Brentwood, city and district, England Brentwood, city (1991 pop. 51,212) and district, Essex, SE England. Brentwood is mainly residential but produces some agricultural equipment, film, and prefabricated concrete. , Tenn. -- American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of HomePatient, Inc. (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). : AHOM), one of the nation's largest home health care providers, today announced its financial results for the second quarter and six months ended June June: see month. 30, 2006. Revenues for the second quarter of 2006 were $81.0 million compared to $81.6 million for the second quarter of 2005, representing a decrease of $0.6 million, or 0.7%. Compared to the second quarter of 2005, revenues in the current quarter were negatively impacted by Medicare Medicare, national health insurance program in the United States for persons aged 65 and over and the disabled. It was established in 1965 with passage of the Social Security Amendments and is now run by the Centers for Medicare and Medicaid Services. reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. reductions totaling approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1.6 million associated with the Medicare Prescription Drug, Improvement, and Modernization Act The Medicare Prescription Drug, Improvement, and Modernization Act (Pub.L. 108-173, 117 Stat. 2066, also called Medicare Modernization Act or MMA) is a law of the United States which was enacted in 2003. of 2003 ("MMA (Microcomputer Managers Association, Inc.) A membership organization with chapters throughout the U.S. that was devoted to educating personnel responsible for personal computers. It disbanded in 1996. Mma - A fast Mathematica-like system, in Allegro CL by R. Fateman, 1991. "). Without these reductions, revenues would have increased approximately $1.0 million, or 1.3%, for the quarter. Revenue growth in the second quarter was also negatively impacted by revenue declines in certain non-core product lines. Revenues for the six months ended 2006 were $161.6 million compared to $163.1 million for the same six-month period in 2005, representing a decrease of $1.5 million, or 0.9%. Compared to the six months ended June 30, 2005, revenues were negatively impacted by Medicare reimbursement reductions totaling approximately $5.8 million associated with MMA. Without these reductions, revenues for the six months ended June 30, 2006 would have increased approximately $4.3 million, or 2.6%. Net loss for the second quarter of 2006 was $(1.8) million compared to $2.4 million net income for the second quarter of 2005, representing a decrease of $4.2 million. Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. income (loss) per share for the second quarter was $(0.11) compared to $0.13 for the same quarter last year. The Medicare reimbursement changes associated with the MMA decreased net income by approximately $3.3 million in the second quarter of 2006 compared to the same quarter of 2005. This $3.3 million net income impact is comprised of a decrease in net revenue of approximately $1.6 million and an increase in cost of sales of approximately $1.7 million. The reduced revenues of approximately $1.6 million are due to a reduction in inhalation inhalation /in·ha·la·tion/ (in?hah-la´shun) 1. the drawing of air or other substances into the lungs.inhala´tional 2. the drawing of an aerosolized drug into the lungs with the breath. 3. drug reimbursement. Cost of sales increased approximately $1.7 million due to a shift in product mix related to changes in inhalation drug reimbursement. Net loss for the six months ended June 30, 2006 was $(2.6) million compared to $3.7 million net income for the same six month period in 2005, representing a decrease of $6.3 million. Diluted income (loss) per share for the six months ended June 30, 2006 was $(0.15) compared to $0.20 for the same six month period in 2005. The Medicare reimbursement changes associated with the MMA decreased net income by approximately $8.0 million in the six months ended June 30, 2006 compared to the same period of 2005. This $8.0 million net income impact is comprised of a decrease in net revenue of approximately $5.8 million and an increase in cost of sales of approximately $2.2 million. The reduced revenues of approximately $5.8 million include a reduction in inhalation drug reimbursement of approximately $4.2 million and a reduction in oxygen reimbursement of approximately $1.6 million. The oxygen reimbursement reduction went into effect in late March of 2005. Cost of sales increased approximately $2.2 million due to a shift in product mix related to changes in inhalation drug reimbursement. In addition to the impact of the reimbursement reductions discussed above, the Company's net income in the second quarter and six months of 2006 was also reduced by expenses related to investments made in information systems enhancements, sales and marketing programs, start up of an inhalation drug pharmacy pharmacy, art of compounding and dispensing drugs and medication. The term is also applied to an establishment used for such purposes. Until modern times medication was prepared and dispensed by the physician himself. In the 18th cent. operation, and further centralization cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. of field activities, all of which are intended to enhance efficiency and profitability in the future. Also, the Company recorded additional depreciation expense of $0.4 million and $0.6 million during the second quarter and first six months of 2006, respectively, due to a decrease in the depreciable depreciable Of, relating to, or being a long-term tangible asset that is subject to depreciation. lives of certain rental equipment assets as a result of the recently announced reductions by Medicare in rental periods for various types of durable medical equipment Durable medical equipment is a term of art used to describe certain Medicare benefits, that is, whether Medicare may pay for the item. The item is defined by Title XVIII the Social Security Act: SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 123R "Share-Based Payment" effective January January: see month. 1, 2006 increased general and administrative expenses by $0.2 million and $0.3 million in the second quarter and six months ended June 30, 2006, respectively. Earnings before interest, taxes, depreciation, and amortization Earnings before interest, taxes, depreciation, and amortization (EBITDA) A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) is a non-GAAP financial measurement that is calculated as net income excluding interest, taxes, depreciation and amortization. EBITDA for the second quarter of 2006 was $11.3 million compared to $13.9 million for the same period in 2005. For the six months ended June 30, 2006, EBITDA was $22.0 million compared to $26.0 million for the same period in 2005. The MMA reimbursement reductions, as discussed above, reduced EBITDA by approximately $3.3 million in the first quarter of 2006, and approximately $8.0 million for the six months ended June 30, 2006. American HomePatient, Inc. is one of the nation's largest home health care providers with 262 centers in 34 states. Its product and service offerings include respiratory respiratory /res·pi·ra·to·ry/ (res´pi-rah-tor?e) pertaining to respiration. res·pi·ra·to·ry adj. Of, relating to, used in, or affecting respiration. services, infusion INFUSION, med. jur. A pharmaceutical operation, which consists in pouring a hot or cold fluid upon a substance, whose medical properties it is desired to extract. Infusion is also used for the product of this operation. Although infusion differs from decoction, (q.v. therapy, parenteral parenteral /pa·ren·ter·al/ (pah-ren´ter-al) not through the alimentary canal, but rather by injection through some other route, as subcutaneous, intramuscular, etc. par·en·ter·al adj. 1. and enteral nutrition Enteral nutrition Nourishment given through a tube or stoma directly into the small intestine, thus bypassing the upper digestive tract. Mentioned in: Electrolyte Supplements, Enterostomy, Necrotizing Enterocolitis , and medical equipment for patients in their home. American HomePatient, Inc.'s common stock is currently traded in the over-the-counter market over-the-counter market Trading in stocks and bonds that does not take place on stock exchanges. Such trading occurs most often in the U.S., where requirements for listing stocks on the exchanges are strict. 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 Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with U.S. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). American HomePatient, Inc. also provides information related to non-GAAP financial measurements such as, 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 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 restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. 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 mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. 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 indicative: see mood. 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 InternetPublicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the services.
American HomePatient, Inc. Schedule A
Summary Financial Data
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- -------------------
2006 2005 2006 2005
----------- -------- --------- --------
(unaudited) (unaudited)
Revenues, net $ 81,036 $ 81,617 $161,582 $163,105
Cost of sales and related
services 19,997 19,522 40,872 39,298
Cost of rentals and other
revenues, including rental
equipment depreciation 11,517 10,108 21,535 19,657
Operating expenses 39,766 39,227 79,304 79,216
Bad debt expense 2,771 2,186 5,563 4,875
General and administrative
expenses 4,543 4,108 8,644 8,307
Depreciation, excluding
rental equipment, and
amortization 950 850 1,872 1,663
Interest expense, net 4,489 4,313 8,691 8,603
Other expense (income), net 12 (100) (128) (155)
Earnings from unconsolidated
joint ventures (1,382) (1,172) (2,608) (2,379)
---------- -------- -------- --------
(Loss) income from operations
before reorganization items
and income taxes (1,627) 2,575 (2,163) 4,020
Reorganization expense 135 81 251 187
---------- -------- -------- --------
(Loss) income from operations
before income taxes (1,762) 2,494 (2,414) 3,833
Provision for income taxes 87 87 174 183
---------- -------- -------- --------
Net (loss) income $ (1,849) $ 2,407 $ (2,588) $ 3,650
========== ======== ======== ========
Basic income per common share $ (0.11) $ 0.14 $ (0.15) $ 0.21
Diluted income per common
share $ (0.11) $ 0.13 $ (0.15) $ 0.20
----------------------------------------------------------------------
June 30, December 31,
2006 2005
---------- ------------
(unaudited)
Cash and cash equivalents $ 7,299 $ 4,444
Restricted cash 650 650
Net patient receivables 54,052 55,222
Other receivables 666 1,242
---------- ------------
Total receivables 54,718 56,464
Other current assets 17,141 22,871
---------- ------------
Total current assets 79,808 84,429
Property and equipment, net 55,562 56,981
Goodwill 121,834 121,834
Other assets 22,768 24,390
---------- ------------
Total Assets $ 279,972 $ 287,634
========== ============
Accounts payable $ 21,771 $ 18,110
Current portion of long-term
debt and capital leases 518 908
Other current liabilities 21,074 30,276
---------- ------------
Total current
liabilities 43,363 49,294
Long-term debt and capital
leases, less current portion 250,301 250,111
Other noncurrent liabilities 35 50
---------- ------------
Total liabilities 293,699 299,455
Minority interest 653 635
Total shareholders'
deficit (14,380) (12,456)
---------- ------------
Total Liabilities
and Shareholders'
Deficit $ 279,972 $ 287,634
========== ============
American HomePatient, Inc. Schedule B
Reconciliation of Non-GAAP Financial Measurements to GAAP Financial
Statements
(In thousands)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- ---------------------
2006 2005 2006 2005
-------------------- ---------------------
(unaudited) (unaudited)
Net (loss) income (Note A) $ (1,849) $ 2,407 $ (2,588) $ 3,650
Add:
Provision for income taxes 87 87 174 183
Interest expense, net 4,489 4,313 8,691 8,603
Rental equipment
depreciation 7,623 6,240 13,840 11,945
Other depreciation and
amortization 950 850 1,872 1,663
----------- -------- ----------- ---------
Earnings before interest,
taxes, depreciation, and
amortization (EBITDA) $ 11,300 $13,897 $ 21,989 $ 26,044
=========== ======== =========== =========
Three Months Ended Six Months Ended June
June 30, 30,
-------------------- ---------------------
2006 2005 2006 2005
-------------------- ---------------------
(unaudited) (unaudited)
Revenues, net $ 81,036 $ 81,617 $ 161,582 $ 163,105
Add:
Impact of MMA reimbursement
reductions 1,618 - 5,809 -
----------- -------- ----------- ---------
Revenue, net, excluding
impact of MMA reimbursement
reductions $ 82,654 $ 81,617 $ 167,391 $ 163,105
=========== ======== =========== =========
Note A: Net income in the second quarter of 2006 and the six months
ended June 30, 2006 was impacted by $180 and $320, respectively of
non-cash stock-based compensation expense associated with the
required adoption of Statement of Financial Accounting Standards No.
123R, "Share-Based Payment."
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