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March 20, 2013 /PRNewswire/ -- Gentiva Health Services, Inc. (NASDAQ: GTIV) announced today its 2013 financial outlook for net revenues and adjusted income from continuing operations attributable to Gentiva shareholders. This outlook reflects the recently issued instructions from the Centers for Medicare & Medicaid Services (CMS) regarding the treatment of sequestration.
For the full-year 2013, the Company expects:
Net revenues to be in the range of $1.69 billion to $1.73 billion, including a $21.0 million year-over-year negative impact from branches closed or sold in the prior year.
Adjusted income from continuing operations attributable to Gentiva shareholders to be in the range of $0.90 to $1.10 on a diluted per share basis, based on an estimated 31.0 million shares outstanding.
This guidance includes the negative impact of sequestration and Medicare related rate changes, which is an approximate
$30.0 million reduction in net revenues and adjusted earnings before interest, taxes, depreciation and amortization attributable to continuing operations (Adjusted EBITDA) and a
$0.60 reduction in adjusted income from continuing operations on a diluted per share basis. This guidance assumes that sequestration will affect the reimbursement related to Medicare patients whose service dates end on or after
April 1, 2013.
This guidance does not include the potential impact of acquisitions, credit agreement amendments or future reimbursement rate changes. Adjusted income from continuing operations attributable to Gentiva shareholders and Adjusted EBITDA exclude charges related to restructuring, legal settlements, acquisition and integration activities and other special items.
Free cash flow is expected to be in the range of
$40.0 to $50.0 million for the full-year 2013. No further principal payments are due this year under the Company's credit agreement as the Company prepaid the
$25.0 million due in February 2013. Based on this debt prepayment and typical cash flow seasonality, the Company expects its cash flow to be lower in the first quarter of 2013, but to increase as the year progresses. Free cash flow is calculated as net cash provided by operating activities less capital expenditures.
"Against another difficult reimbursement year, our focus in 2013 is squarely on continuing to drive strong mid-single digit home health growth and on returning our hospice division to consistent growth to offset the impact of these cuts," said Gentiva CEO
Tony Strange. "We remain committed to delivering the message to policy makers and legislators that home health and hospice are cost effective, clinically appropriate and patient preferred, and consequently, we expect our industry to receive the reimbursement clarity it desperately needs as we get into the second half of the year."
Non-GAAP Financial Measures
The information provided in this press release includes certain non-GAAP financial measures as defined under Securities and Exchange Commission rules. A reconciliation of adjusted income from continuing operations attributable to Gentiva shareholders to net income, the most directly comparable GAAP measure, is not accessible on a forward-looking basis without unreasonable effort due to the inherent difficulties in predicting the costs of restructuring, legal settlements and merger and acquisition activities, the results of discontinued operations and the impact of any future acquisitions or divestitures, which can fluctuate significantly and may have a significant impact on net income.