Gentiva Health Services Inc. (GTIV) reported its second-quarter adjusted operating earnings of $15.1 million or 49 cents per share, lagging behind the Zacks Consensus Estimate of 65 cents. The income also compares negatively with $22.7 million or 74 cents earned in the year-ago quarter.
Including the dividend received from CareCentrix, Gentiva’s adjusted income from continuing operations for the reported quarter amounts to 58 cents.
The adjusted earnings exclude the impact of legal settlement, restructuring, acquisition and integration costs and dividend income.
Including all one-time charges, the company posted a net income of $5.2 million or 17 cents per share, as opposed to the prior-year income of $18.9 million or 62 cents per share.
Gentiva’s total net revenues climbed 54.0% year over year to $456.9 million, beating the Zacks Consensus Estimate of $482.0 million.
The increase in revenue was due to the huge year-over-year surge in the revenue of the Hospice segment, which increased to $194.4 million from $20.9 million in the prior-year quarter, owing to the acquisition of Odyssey Healthcare Inc. in August, 2010. However, this was partly off-set by a decline of 4% in the revenue of Home Health Episodic segment to $219.8 million.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) attributable to continuing operations increased 22% to $52.8 million from $43.2 million in the prior-year quarter. Adjusted EBITDA excludes charges associated with restructuring, acquisition and integration activities, dividend income and the cost of legal settlements.
Financial Update
Gentiva exited the quarter with cash and cash equivalents of approximately $98.1 million and outstanding debt of $1.03 billion. The company has repaid $76.9 million on its revolving credit facility and term loans since the completion of the Odyssey acquisition.
During the reported quarter, net cash provided by operating activities was $17.2 million, down from $32.3 million in the prior-year period. Free cash flow also declined to $11.8 million from $29.8 million in the second quarter of 2010. Free cash flow for the reported quarter includes $12.5 million paid as a settlement for an OIG investigation.
As on June 30, 2011, Gentiva had total assets of $2.09 billion and shareholders’ equity of $666.4 million, as compared to $2.12 billion and $638.2 million, respectively, on December 31, 2010.
Outlook for Fiscal 2011
Gentiva expects net revenues for the year to be in the range of $1.80-$1.85 billion and adjusted income from continuing operations to be in the range of $2.00-$2.20 per share.
The results include the impact of the Odyssey acquisition as well as an approximately 5% decrease in Medicare home health reimbursement rates in 2011 as compared to 2010, based on the final rules issued by the Centers for Medicare & Medicaid Services (CMS) in November 2010. They also includethe expected impact of the final hospice 2012 reimbursement rates on the year’s fourth quarter earnings.
Gentiva’s competitor, Amedisys Inc. (AMED) reported second-quarter earnings per share of 67 cents, missing the Zacks Consensus Estimate by 2 cents and showing a 41.7% decline from the year-ago quarter.
Gentiva carries a Zacks #5 Rank, which translates into a short-term Strong Sell rating.
GENTIVA HEALTH (GTIV): Free Stock Analysis Report
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment