DaVita Inc.
Financial and operating highlights include:
Net earnings for the first quarter were $34.6 million or $0.39 per share. These results exclude first quarter cash recoveries of $2.3 million associated with accounts receivable reserved in 1999. Net earnings for the quarter, including these recoveries, were $36.0 million or $0.40 per share.
-- Continental U.S. dialysis revenue per treatment (excluding lab,
management fees and other revenue) in the first quarter was $290.45 as
compared to $283.19 in the fourth quarter, or a 2.6% sequential
increase.
-- Total continental U.S. treatments for the first quarter were 1,433,803.
Both non-acquired and same center treatment growth were 4.2%.
-- Continental U.S. DSO at quarter end was 73 days.
-- Operating cash flow was $85 million and free cash flow was $77 million
for the quarter.
-- At March 31, 2002 we operated 495 outpatient centers in the continental
U.S. serving approximately 43,000 patients. During the first quarter
we closed 1 under-performing center, sold 1 center, opened 2 denovo
centers and acquired 1 center. Included in this patient and center
count are approximately 3,400 patients in 33 centers under management.
DaVita will hold a conference call to discuss its first quarter 2002 results on May 10, 2002 at 10 a.m. Eastern. The dial-in number is 800-399-4406. A replay of the conference call will be available on DaVita's official web page, http://www.davita.com/, for the following 30 days.
This release contains forward-looking statements. Factors which could impact future results include the uncertainties associated with governmental regulation, general economic and other market conditions, and the risk factors set forth in the Company's SEC filings, including its Form 10-K for the year ended December 31, 2001. The forward-looking statements should be considered in light of these risks and uncertainties.
These risks include those relating to possible reductions in private and government reimbursement rates, the concentration of profits generated from PPO and private indemnity patients and from ancillary services including the administration of pharmaceuticals, the ongoing payment suspension and review of the Company's Florida laboratory subsidiary by its Medicare carrier and the Department of Justice, the ongoing review by the US Attorney's Office and HHS Office of Inspector General in Philadelphia and the Company's ability to maintain contracts with physician medical directors.
DAVITA INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(dollars in thousands, except per share data)
March 31, December 31,
2002 2001
ASSETS
Cash and cash equivalents $31,697 $36,711
Accounts receivable, less allowance of
$51,807 and $52,475 344,238 333,546
Inventories 28,179 34,901
Other current assets 12,192 9,364
Deferred income taxes 58,987 60,142
Total current assets 475,293 474,664
Property and equipment, net 256,046 252,778
Amortizable intangible assets, net 70,189 73,108
Investments in third-party dialysis businesses 4,145 4,346
Other long-term assets 2,027 2,027
Goodwill 857,132 855,760
$1,664,832 $1,662,683
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $83,559 $74,630
Other liabilities 126,153 111,164
Accrued compensation and benefits 86,213 88,826
Current portion of long-term debt 1,597 9,034
Income taxes payable 15,288 15,027
Total current liabilities 312,810 298,681
Long-term debt 798,707 811,190
Other long-term liabilities 4,725 5,012
Deferred income taxes 30,147 23,441
Minority interests 21,423 20,722
Shareholders' equity:
Preferred stock ($0.001 par value;
5,000,000 shares authorized; none issued
or outstanding)
Common stock ($0.001 par value, 195,000,000
shares authorized; 87,017,029 and 85,409,037
shares issued) 87 85
Additional paid-in capital 493,184 467,904
Retained earnings 91,986 56,008
Treasury stock, at cost (3,834,400 and
888,700 shares) (88,237) (20,360)
Total shareholders' equity 497,020 503,637
$1,664,832 $1,662,683
DAVITA INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(unaudited)
(dollars in thousands, except per share data)
Three months ended
March 31,
2002 2001
Net operating revenues $427,665 $386,217
Operating expenses:
Dialysis centers and labs 291,634 260,974
General and administrative 36,053 31,813
Depreciation and amortization 15,805 26,148
Provision for uncollectible accounts 5,255 (8,185)
Total operating expenses 348,747 310,750
Operating income 78,918 75,467
Other income 565 1,348
Debt expense 15,072 19,724
Minority interests in income of consolidated
subsidiaries (2,433) (2,457)
Income before income taxes 61,978 54,634
Income tax expense 26,000 23,700
Net income $35,978 $30,934
Comprehensive income $35,978 $30,934
Basic earnings per common share $0.43 $0.37
Diluted earnings per common share $0.40 $0.35
DAVITA INC.
SUPPLEMENTAL FINANCIAL DATA
Financial Results: Q1 2002 Q4 2001 Q1 2001
Net Earnings, excluding recoveries
and goodwill amortization(A) $34,600 $35,700 $27,700
Basic EPS $0.42 $ 0.42 $0.34
EPS assuming dilution $0.39 $ 0.39 $0.31
EBITDA, excluding recoveries
Consolidated (in 000's) $92,500 $96,300 $85,600
Continental U.S. (in 000's) $91,900 $96,000 $86,000
Continental EBITDA margin 21.7% 22.5% 22.5%
Business Metrics (Continental U.S.):
Category #1 Volume
Treatments 1,433,803 1,481,958 1,366,468
Per day sequential increase 0.8% 1.4% 2.9%
Per day year over year increase 6.2% 8.4% 4.7%
Same center growth 4.2% 4.6% 4.0%
Non-acquired growth 4.2% 4.6% 4.0%
Category #2 Revenue, excluding
recoveries
Revenue (in 000's) $424,000 $426,000 $383,000
Dialysis revenue per treatment $290.45 $283.19 $274.22
Per treatment increase from
previous quarter 2.6% 1.1% 2.9%
Category #3 Expenses
A. Dialysis centers and lab
operating expenses
Percent of revenue 68.0% 67.5% 67.2%
Per treatment $201.02 $194.03 $188.13
Per treatment increase
from previous quarter 3.6% 1.5% 0.9%
B. General & Administrative
Percent of revenue 8.5% 7.9% 8.3%
Per treatment $25.14 $22.82 $23.28
Per treatment increase
from previous quarter 10.2% 4.9% 4.3%
C. Bad debt expense as a
percent of revenue 1.8% 2.0% 2.0%
D. Consolidated effective
tax rate 42.0% 43.3% 43.4%
Category #4 Cash Flow (Consolidated,
in 000's)
Operating cash flow $85,000 $26,000 $58,000
Free cash flow (before share
repurchase, acquisition and
development spending) $77,000 $12,000 $55,000
Capital expenditures:
Development $8,200 $8,300 $3,800
Routine maintenance/other $8,400 $13,600 $3,200
Acquisition expenditures, net $1,400 -- $50,700
Category #5 Accounts Receivable
Net receivables (in 000's) $337,000 $325,000 $296,000
DSO 73 72 71
Category #6 Debt/Capital Structure
(Consolidated)
Total debt (in 000's) $800,000 $820,000 $940,000
Net debt, net of cash (in 000's) $769,000 $784,000 $922,000
LTM leverage ratio 2.1x 2.1x 3.0x
Shares repurchased (in 000's) 2,900 800 --
Average repurchase price $23.02 $23.41 --
Category #7 Clinical
Dialysis adequacy -- % of patients
with URR > 65 88% 87% --
Dialysis adequacy -- % of patients
with Kt/V > 1.2 92% 90% --
Anemia measure -- % of patients
with HCT > 33 79% 79% --
Gross mortality 18.4% 18.2% --
(A) Effective January 1, 2002 the Company discontinued the amortization
of goodwill. As a result, previously reported quarterly amounts have
been restated for consistent presentation.
SOURCE: DaVita Inc.
Contact: LeAnne Zumwalt, Investor Relations of DaVita Inc.,
+1-310-750-2072
Website: http://www.davita.com/
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