Skilled Healthcare fourth quarter revenue increases 2.4% to $219.2 million

Published on February 12, 2013 at 1:24 AM · No Comments

Skilled Healthcare Group, Inc. (NYSE: SKH) today announced its consolidated financial operating results for the three and twelve-month period ended December 31, 2012.

"Our strong cash flows from operating activities of $43 million for the 2012 year enabled us to reduce our debt by $26.5 million to $449.0 million as of December 31, 2012, in spite of the significant challenges associated with the extraordinary Medicare rate cut and anti-efficiency program changes that discourage group and concurrent therapy, which took effect in the fourth quarter of 2011 for our skilled nursing businesses, followed by the initiation of a new Manual Medical Review by CMS for therapy services under Medicare Part B," said Boyd Hendrickson, Chairman and Chief Executive Officer of Skilled Healthcare Group.

Mr. Hendrickson continued, "In spite of these challenges, I am proud of the remarkable job done by the clinical professionals providing care in our agencies and facilities to remain focused on maintaining high quality patient care."

Fourth Quarter 2012 Results
Revenue for the quarter ended December 31, 2012 was $219.2 million, an increase of 2.4% when compared to $214.1 million in the fourth quarter of 2011.  Skilled mix decreased 70 basis points to 21.3% in the fourth quarter of 2012 from 22.0% in the fourth quarter of 2011.  Quality mix in the fourth quarter of 2012 decreased 130 basis points to 68.5%, compared to 69.8% in the prior year period.

EBITDA was $23.8 million, or 10.8% of revenue, for the quarter ended December 31, 2012, a decrease of 9.8% compared to $26.4 million, or 12.3% of revenue, in the same period a year ago.  EBITDAR was $28.6 million, or 13.0% of revenue, for the quarter ended December 31, 2012, a decrease of 8.3% compared to $31.2 million, or 14.6% of revenue, for the quarter ended December 31, 2011.

Net income for the quarter ended December 31, 2012 totaled $5.7 million, as compared to $6.7 million for the fourth quarter of 2011. Adjusted net income for the quarter ended December 31, 2012, totaled $6.1 million, a decrease of 9.0% compared to adjusted net income of $6.7 million for the fourth quarter of 2011.  Adjusted net income excludes certain items as described in the Reconciliation of Income (Loss) Before Provision for Income Taxes to Adjusted Net Income table at the end of this press release.

Net income per diluted share was $0.15 for the quarter ended December 31, 2012, as compared to $0.18 for the same period in 2011.  Adjusted net income per diluted share was $0.16 for the quarter ended December 31, 2012, a decrease of 11.1% compared to adjusted net income per diluted share of $0.18 for the quarter ended December 31, 2011.

Long-Term Care Services Segment
Revenue for our long-term care services segment in the quarter ended December 31, 2012 was $165.8 million, an increase of $0.4 million, or 0.2%, as compared to $165.4 million for the same period a year ago.  Revenue for this segment represented 75.6% of total revenue in the fourth quarter of 2012, compared to 77.3% of total revenue in the fourth quarter of 2011.

Therapy Services Segment
Revenue for Hallmark Rehabilitation, our rehabilitation therapy services segment, was $25.7 million for the quarter ended December 31, 2012, an increase of $1.9 million, or 8.4%, compared to the same period a year ago. Third-party rehabilitation therapy accounted for 11.7% of total revenue in the fourth quarter of 2012, compared to 11.1% of total revenue in the fourth quarter of 2011.

Hospice and Home Health Services Segment
Revenue for Signature Hospice and Home Health, our hospice and home health care services segment, was $27.7 million in the fourth quarter of 2012, an increase of $2.8 million, or 11.2%, compared to $24.9 million in the fourth quarter of 2011.  Average daily hospice census grew to 1,379 for the three-months ended December 31, 2012 from 1,330 for the three-months ended December 31, 2011, an increase of 3.7%. The increase in census was due in significant part to the October 2011 acquisition of two hospice agencies.

Full Year 2012 Results
Revenue for the twelve-months ended December 31, 2012 was $872.6 million, an increase of 0.5% when compared to $868.4 million in the twelve-months ended December 31, 2011.  Skilled mix decreased 110 basis points to 22.1% in 2012 from 23.2% in 2011.  Quality mix in 2012 decreased 140 basis points to 69.4%, compared to 70.8% in the prior year period.

Adjusted EBITDA was $100.8 million, or 11.6% of revenue, for 2012, a decrease of 22.5% compared to $130.0 million, or 15.0% of revenue, in the same period a year ago.  Adjusted EBITDAR was $119.3 million, or 13.7% of revenue, for 2012, a decrease of 19.6% compared to $148.4 million, or 17.1% of revenue, for 2011. Adjusted EBITDA includes certain items we have excluded from adjusted net income per diluted share, such as legal expenses for non-routine matters, IT outsourcing evaluation costs and amounts we recorded in 2012 for our 2011 hospice cap accrual.

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