MEDCATH ANNOUNCES FIRST QUARTER RESULTS; CONTINUES EXPANSION ACROSS ALL OPERATING DIVISIONS.CHARLOTTE, N.C.--(BUSINESS WIRE)--Jan. 29, 1998--MedCath Incorporated (Nasdaq/NM:MCTH) today announced financial results for the first quarter ended December 31, 1997. Net revenue for the first quarter ended December 31, 1997, increased 79% to $40.8 million compared with $22.9 million for the same period in 1996. Net income for the quarter ended December 31, 1997, was $1.2 million, or $0.10 per share, on 12.2 million shares compared with $1.8 million, or $0.15 per share, on 11.7 million shares for the same period in 1996. The Company also announced its recent affiliation with a seven-physician cardiology cardiology Medical specialty dealing with heart diseases and disorders. It began with the 1749 publication by Jean Baptiste de Sénac of contemporary knowledge of the heart. Diagnostic methods improved in the 19th century, and in 1905 the electrocardiograph was invented. practice located in McAllen, Texas. The transaction included the signing of a long-term management contract with this physician group, Valley Cardiology, Inc. The Company's Practice Management Division now manages five physician practices comprised of over 100 physicians. In addition, MedCath announced plans to open two new fixed- site cath labs A catheterization laboratory or cath lab is an examination room in a hospital or clinic with diagnostic imaging equipment to support the catheterization procedure. A catheter is inserted into a large artery, and various wires and devices can be inserted through the body via over the next 12 months in Colorado Springs, Colorado The City of Colorado Springs is the second most populous city (after Denver) in the state of Colorado and the 48th most populous city in the United States.[4] The city is the county seat of El Paso County. , and Dakota Dunes, South Dakota Dakota Dunes is an unincorporated, master-planned residential and commercial development covering about 2,000 acres (8 km²) in Union County in the extreme southeast corner of the U.S. state of South Dakota. , further strengthening the Company's Diagnostics Division. MedCath has agreed to partner with local cardiologists and own a majority interest in the Colorado Springs Colorado Springs, city (1990 pop. 281,140), seat of El Paso co., central Colo., on Monument and Fountain creeks, at the foot of Pikes Peak; inc. 1886. It is a year-round resort and a booming military, technological, and commercial city. facility and has entered into a long-term agreement to develop and manage the Dakota Dunes facility. These two cath labs, in addition to the previously announced cath lab under development in Montgomery, Alabama Montgomery is the capital and second most populous city of the U.S. state of Alabama and the county seat of Montgomery County. Montgomery is notable for its historic involvement during the Civil War, for being the first capital of the Confederacy, and for being a primary site in , will bring the total number of mobile and fixed-site cath labs operated by the Company to 33. Stephen R. Puckett, president of MedCath, said, "We are very excited to be partnering with the physicians of Valley Cardiology. In addition, the Colorado and South Dakota South Dakota (dəkō`tə), state in the N central United States. It is bordered by North Dakota (N), Minnesota and Iowa (E), Nebraska (S), and Wyoming and Montana (W). cath lab projects will continue the growth of our Diagnostics Division. With last week's announcement of our first three-way hospital partnership in Dayton, Ohio Dayton is a city in southwestern Ohio, United States. It is the county seat and largest city of Montgomery County. As of the 2005 census estimate, the population of Dayton was 158,873. , we are seeing significant development momentum across all three of our operating divisions." With respect to earnings, Mr. Puckett said, "In the first quarter of our fiscal year, the financial performance of both the McAllen Heart Hospital and the Arkansas Heart Hospital exceeded our expectations. However, the ramp-up of the Tucson Heart Hospital has been slower than expected. The patient census and the resulting volume of procedures, though improved in January compared to the first quarter, are running below projected levels. The financial performance of the Tucson Heart Hospital for the balance of the fiscal year will depend upon the number of patients and the volume of procedures, which cannot be assured at this time. However, we have taken a number of steps to improve the hospital's performance. The opening this fall of the medical office building adjacent to the heart hospital, which is fully leased, is expected to improve the hospital's performance. "In addition, the opening of the Arizona Heart Hospital, located in Phoenix, Arizona Phoenix /ˈfiːˌnɪks/ (English: Phoenix, Navajo: Hoozdo, lit. "the place is hot", Western Apache: Fiinigis) is the capital and the most populous city of the U.S. , which was expected in February 1998, will be delayed until mid-April as a result of water damage caused by a ruptured rup·ture n. 1. a. The process or instance of breaking open or bursting. b. The state of being broken open. 2. A break in friendly relations. 3. Pathology a. water pipe. Although the losses are fully insured, the delayed opening Delayed opening Postponement of the start of trading in a stock until correction of a gross imbalance in buy and sell orders. Such an imbalance is likely to follow on the heels of a significant event such as a takeover offer. See: Suspended trading. will have a further dampening effect on earnings. As a result primarily of the performance of the Tucson Heart Hospital, as well as recent developments in Phoenix, we no longer expect to achieve our original earnings projection of $0.72 per share for fiscal year 1998. As we gain more experience with the Tucson Heart Hospital and as the opening of the Arizona Heart Hospital approaches, we will continue to respond to questions from the analyst community as they work to refine their earnings models for the Company for the year." Statements contained in this press release which are not historical facts may be considered 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. as that term is defined in 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 subject to risks and uncertainties which could cause actual results to differ materially from those projected. Such risks and uncertainties include construction and development risks associated with heart hospitals, including, without limitation, unanticipated delays in construction and licensing; increased construction costs; operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. and negative cash flows during the initial operation of heart hospitals continuing longer than anticipated; dependence on physician relationships; increased competition from existing hospitals in the marketplace; dependence on the availability and terms of long-term management contracts; fluctuations in quarterly operating results from seasonality, population shifts and other factors; dependence on key management; as well as other risks detailed in the Company's filings with the Securities and Exchange Commission. MedCath Incorporated is a provider of cardiology and cardiovascular services through the operation of specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. facilities and the management of physician practices. The Company operates three specialty heart hospitals and has four additional heart hospitals under development, manages five medical practices comprised of over 100 physicians, manages fixed-site cardiac diagnostic and therapeutic centers, and owns and operates mobile cardiac catheterization Cardiac Catheterization Definition Cardiac catheterization (also called heart catheterization) is a diagnostic procedure which does a comprehensive examination of how the heart and its blood vessels function. laboratories serving networks of hospitals. -0-
MEDCATH INCORPORATED
Financial Highlights
Three Months Ended
December 31
1997 1996
Net revenue $ 40,798 $ 22,854
Operating expenses (36,779) (19,333)
Income from operations 4,019 3,521
Income before income taxes 1,985 2,924
Provision for income taxes (774) (1,170)
Net income $ 1,211 $ 1,754
Diluted net income per share $ 0.10 $ 0.15
Weighted average shares
outstanding - diluted 12,204 11,669
December 31, September 30,
1997 1997
Cash and short-term investments $ 37,318 $ 42,951
Working capital $ 39,454 $ 47,498
Total assets $ 305,838 $ 259,008
Long-term debt and capital leases,
excluding current maturities $ 126,471 $ 98,863
Shareholders' equity $ 135,359 $ 127,136
CONTACT: MedCath Inc., Charlotte Stephen R. Puckett or Richard J. Post, 704/541-3228 |
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