DaVita Inc.
Continental U.S. EBITDA for the twelve months ended December 31, 2001 was $366 million. Net earnings were $102 million or $1.14 per share. These results exclude cash settlements and recoveries related to prior years and an extraordinary gain. Including the settlements and recoveries and extraordinary gain, consolidated net earnings for the year were $137 million or $1.52 per share.
Financial and operating highlights include:
-- Continental U.S. dialysis revenue per treatment (excluding lab,
management fees and other revenue) in the fourth quarter was
$283.19 compared to $280.16 in the third quarter, a 1.1% increase.
-- Operating cash flow for the quarter was $26 million, reflecting changes
in working capital that included a $17 million reduction in current
liabilities and an increase in accounts receivable of $16 million. For
the twelve months ended December 31, 2001 operating cash flow was
$273 million.
-- Continental U.S. DSO at quarter end was 72 days.
-- Total continental U.S. treatments for the fourth quarter were
1,481,958. Both non-acquired and same center treatment growth were
4.6%.
-- Fourth quarter cash recoveries associated with accounts receivable
reserved in 1999 were $5.1 million.
-- At December 31, 2001 we operated 493 outpatient centers in the
continental U.S. serving 43,000 patients. During the quarter we closed
three under-performing centers and opened two de novo centers.
Included in our continental patient and center count are 3,300 patients
in 32 centers under management.
DaVita will hold a conference call to discuss its fourth quarter 2001 results on Wednesday, February 27, 2002 at 12:30 p.m. Eastern Time. We have included supplemental information as an attachment to this release, which we will refer to in our call. The dial-in number is 800-399-4406. A replay of the conference call will be available on DaVita's official web site, 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-Q for the quarter ended September 30, 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 Civil Division of the US Attorney's Office for the Eastern District of Pennsylvania and the Company's ability to maintain contracts with physician medical directors.
DAVITA INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share data)
December 31,
2001 2000
ASSETS
Cash and cash equivalents $36,711 $31,207
Accounts receivable, less allowance
of $52,475 and $61,619 333,546 290,412
Inventories 34,901 20,641
Other current assets 9,364 10,293
Income taxes receivable 2,830
Deferred income taxes 60,142 42,492
Total current assets 474,664 397,875
Property and equipment, net 252,778 236,659
Intangible assets, net 928,868 921,623
Investments in third-party dialysis businesses 4,346 34,194
Other long-term assets 2,027 1,979
Deferred income taxes 4,302
$1,662,683 $1,596,632
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $74,630 $74,882
Other liabilities 111,164 102,563
Accrued compensation and benefits 88,826 70,406
Current portion of long-term debt 9,034 1,676
Income taxes payable 15,027
Total current liabilities 298,681 249,527
Long-term debt 811,190 974,006
Other long-term liabilities 5,012 4,855
Deferred income taxes 23,441
Minority interests 20,722 18,876
Commitments and contingencies
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; 85,409,037 and
82,135,634 shares issued) 85 82
Additional paid-in capital 467,904 430,676
Notes receivable from shareholders (83)
Retained earnings (deficit) 56,008 (81,307)
Treasury stock, at cost (888,700 shares) (20,360)
Total shareholders' equity 503,637 349,368
$1,662,683 $1,596,632
DAVITA INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
For the quarters ended For the years ended
December 31, December 31,
2001 2000 2001 2000
Net revenues:
Current period
services $429,657 $372,746 $1,628,753 $1,486,302
Prior period
services 22,000
Operating expenses:
Dialysis centers
and labs 290,881 256,407 1,100,652 1,032,153
General and
administrative 33,814 30,164 129,194 123,624
Depreciation and
amortization 26,156 27,290 105,209 111,605
Provision for
uncollectible
accounts 3,580 7,094 (2,294) 39,649
Impairments and
valuation adjustments 142 4,556
Total operating
expenses 354,431 321,097 1,332,761 1,311,587
Operating income 75,226 51,649 317,992 174,715
Other income (loss),
net 320 1,970 4,644 (7,201)
Debt expense 15,680 22,620 72,438 116,637
Minority interests in
income of consolidated
subsidiaries (2,408) (2,774) (9,260) (5,942)
Income before income
taxes and
extraordinary items 57,458 28,225 240,938 44,935
Income tax expense 24,900 12,892 104,600 27,960
Income before
extraordinary items 32,558 15,333 136,338 16,975
Extraordinary gain
(loss) related to
early extinguishments
of debt, net of
tax of $(652) and
$2,222 977 (3,490)
Net income $32,558 $15,333 $137,315 $13,485
Basic earnings per
common share:
Income before
extraordinary
items $0.38 $0.19 $1.63 $0.21
Extraordinary gain
(loss), net of tax 0.01 (0.04)
Net income $0.38 $0.19 $1.64 $0.17
Weighted average number
of common shares
outstanding 84,650 81,858 83,768 81,581
Diluted earnings per
common share:
Income before
extraordinary
items $0.36 $0.18 $1.51 $0.20
Extraordinary gain
(loss), net of tax 0.01 (0.04)
Net income $0.36 $0.18 $1.52 $0.16
Weighted average number
of common and
incremental shares
outstanding 93,634 85,625 103,454 83,157
DAVITA INC.
SUPPLEMENTAL FINANCIAL DATA
Q4 and YTD Results: Q4 2001 Q3 2001 Q4 2000 YE 2001
Net Earnings, before
recoveries and
extraordinary
item (in 000's) $29,500 $28,000 $15,300 $102,100
Basic EPS $0.35 $ 0.33 $ 0.19 $1.22
EPS assuming
dilution $0.33 $ 0.31 $ 0.18 $1.14
EBITDA, before recoveries
Consolidated
(in 000's) $96,300 $96,000 $79,000 $366,000
Continental U.S
(in 000's). $96,000 $95,600 $79,500 $366,200
Operating margin 22.5% 23.4% 21.5% 22.7%
Business Metrics
(Continental U.S.):
Category #1 Volume
Treatments 1,481,958 1,432,453 1,352,277 5,690,199
Per day
sequential
increase 1.4% 1.6% 0.7% --
Per day year
over year
increase 8.4% 7.6% 4.2% 6.6%
Same center
growth 4.6% 4.1% 3.4% 3.7%
Non-acquired
growth 4.6% 4.1% 3.5% 3.9%
Category #2 Revenue,
excluding recoveries
Continental revenue
(in 000's) $426,000 $408,000 $369,000 $1,613,000
Per treatment $283.19 $280.16 $266.51 $278.46
Per treatment
increase from
previous quarter 1.1% 1.6% 2.3% --
Category #3 Expenses
A. Operating expenses
Percent of
revenue 67.5% 67.1% 68.4% 67.3%
Per treatment $194.03 $191.13 $186.46 $190.90
Per treatment
increase from
previous
quarter 1.5% 0.6% 2.3% --
B. General & Administrative
Percent of
revenue 7.9% 7.6% 8.2% 8.0%
Per treatment $22.82 $21.75 $22.31 $22.70
Per treatment
increase from
previous
quarter 4.9% (5.4%) 0.5% --
C. Bad debt expense
as a percent
of revenue 2.0% 1.9% 1.9% 2.0%
D. Effective tax
rate 43.3% 43.4% 45.7% 43.4%
Category #4 Cash Flow
(Consolidated, in 000's)
Operating cash
flow $26,000 $112,000 $113,000 $273,000
Free cash flow
(before acquisition
and development
spending) $12,000 $105,000 $109,000 $240,000
Capital expenditures:
Development $8,300 $4,800 $7,800 $20,100
Routine maintenance/
other $13,600 $7,100 $4,400 $32,700
Acquisition
expenditures, net -- $12,100 $12,700 $36,300
Category #5 Accounts
Receivable
Net receivables
(in 000's) $325,000 $309,000 $283,000
DSO 72 71 73
Category #6 Debt/Capital
Structure (Consolidated)
Total debt
(in 000's) $820,000 $820,000 $976,000
Net debt, net of
cash (in 000's) $784,000 $775,000 $944,000
LQA leverage ratio 2.0x 2.0x 3.0x
Category #7 Clinical
Dialysis adequacy
- % of patients
with URR>65 87% 86% 88%
Dialysis adequacy
- % of patients
with Kt/V > 1.2 90% N/A N/A
Anemia measure
- % of patients
with HCT > 33 79% 78% 78%
Gross mortality 18.2% N/A N/A
SOURCE: DaVita Inc.
Contact: LeAnne Zumwalt, Investor Relations of DaVita Inc.,
+1-310-750-2072
Website: http://www.davita.com/