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Kindred Healthcare Reports Third Quarter Results

Stocks in this article: KND

Kindred Healthcare, Inc. (the “Company”) (NYSE:KND) today announced its operating results for the third quarter ended September 30, 2012. The Company’s consolidated financial statements include the operating results of RehabCare Group, Inc. (“RehabCare”) since the closing of the acquisition on June 1, 2011.

Third Quarter Highlights:

  • Despite a seasonally weak period, consolidated revenues rose 1% to $1.5 billion and operating income was nearly $200 million
    • While hospital revenues grew 4%, adverse Medicare reimbursement changes hampered revenues in the nursing center and RehabCare contract therapy divisions
  • Operating cash flows surged to near-record $141 million in the quarter compared to $67 million last year
    • Results are on track to meet annual 2012 guidance range of $260 million to $280 million
  • Hospital division revenues rose 4% while operating income grew 10%
    • Same-store admissions rose 2% compared to last year
    • Cost per patient day rose only 1% from a year ago
  • Nursing center division reported stable operating income of $71 million in difficult reimbursement environment
  • RehabCare contract therapy division reported solid operating income of $37 million
    • Division reported brisk new contract sales in the first nine months this year
    • Recent Medicare rule changes adversely impacted results late in this year’s third quarter
  • PeopleFirst home health and hospice division reported significant revenue and operating income growth
    • Recent IntegraCare acquisition added approximately $71 million in annualized revenues
  • Corporate overhead declined as a percent of revenues to 3.0% from 3.2% in last year’s third quarter
    • RehabCare synergies and other cost reductions drove third quarter overhead lower by 6% compared to last year

Third Quarter Results

Continuing Operations

Consolidated revenues for the third quarter ended September 30, 2012 rose 1% to $1.5 billion compared to the third quarter last year. Income from continuing operations for the third quarter of 2012 totaled $7.9 million or $0.15 per diluted share compared to $0.6 million or $0.01 per diluted share in the third quarter last year.

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