Third Quarter 2014 Highlights:
- Total pro-forma revenues of $257.6 million, a 42.2% year-over-year increase
- Same market freestanding treatments per day grew 2.4% year-over-year representing the 6th consecutive quarter of steady growth
- International cases increased 2.4%
- Pro Forma Adjusted EBITDA of $40.1 million, up 72.6% year-over-year, representing 15.5% of total pro-forma revenues
- Third straight quarter of year-over-year Pro Forma Adjusted EBITDA margin expansion
- Received $325 million preferred equity investment from Canada Pension Plan Investment Board ("CPPIB") leading to significant deleveraging and increased liquidity for the Company
- CMS released its final Physician Fee Schedule (PFS) rule for calendar year 2015; Impact neutral as compared to calendar year 2014
- Integration and performance of OnCure and SFRO acquisitions ahead of expectations, producing significant growth opportunities
FORT MYERS, Fla., Nov. 13, 2014 (GLOBE NEWSWIRE) -- 21st Century Oncology Holdings, Inc. ("21st Century Oncology", the "Company"), the leading global, physician-led provider of integrated cancer care ("ICC") services, announced today its financial results for the third quarter ended September 30, 2014.
Dr. Daniel Dosoretz, Founder and Chief Executive Officer, commented, "Clearly the most notable event of the third quarter was the cash equity investment that we received from CPPIB, Canada's largest pension fund with C$227 billion in assets under management. We will use the proceeds to strengthen our liquidity, reduce debt and pursue new strategic opportunities. We welcome CPPIB as a major partner in 21C along with Vestar Capital Partners and management."
"Regarding our operating results, I'm extremely pleased to report that our positive momentum continued, as we finished the third quarter with 42.2% year-over-year revenue growth. Our same market treatments per day growth remained robust during the quarter, up 2.4% year-over-year as a result of the local efforts of our community-based physicians, focused marketing efforts, and continued ICC expansion. We saw increased completed case volume again this quarter, driven by both organic growth in key markets, improvements in certain markets, and strong contributions from OnCure Holdings, Inc. ("OnCure") and South Florida Radiation Oncology ("SFRO"). I am very pleased to report that the integration and performance of both OnCure and SFRO, two of the largest acquisitions in our Company's history, remain ahead of expectations and will continue to provide significant opportunity on an on-going basis for us to grow as we further leverage our clinical leadership, scale and ICC model to these markets," Dr. Dosoretz added.
"Our operations both domestic and international continue to strengthen as we execute on our strategy of organic growth and select strategic de-leveraging acquisitions. We fully expect to continue building upon this momentum through the remainder of 2014 and into 2015 in our mission to provide integrated cancer care at academic quality, and deliver that care at a compelling value to our expanding patient population worldwide."
Third Quarter 2014 Results
Total revenues for the third quarter of 2014 were $257.6 million, compared to total pro-forma revenues of $181.2 million in the same quarter of 2013, driven by the Company's acquisition activity and organic growth.
Domestic same market treatments per day increased 2.4% in the third quarter of 2014 while same market freestanding revenues increased 3.5%. The growth was primarily driven by the continued expansion of our physician network. Domestic same market therapy revenue per treatment increased 1.1% in the third quarter of 2014, primarily due to continued improvements in managed care pricing and the continued application of advanced technologies.
Total Relative Value Units (RVUs) per day increased by 45.1% in the third quarter versus the same period of the prior year due to acquisition-related treatment growth and technology mix. On a same market basis, RVUs decreased 1.3% versus the same period last year, attributable to the 2014 fee schedule in which The Centers for Medicare and Medicaid Services (CMS) cut the Radiation Oncology RVUs an average of 4.8%. Adjusted earnings before interest, taxes, depreciation, amortization, stock-based compensation and other non-cash and pro forma items ("Pro Forma Adjusted EBITDA") in the third quarter of 2014 was $40.1 million, or 15.5% of total revenues, up 72.6% compared to $23.2 million, or 12.8% of total pro forma revenues, in the third quarter of 2013. Reconciliation of net loss attributable to 21st Century Oncology, determined in accordance with generally accepted accounting principles to Pro Forma Adjusted EBITDA and total revenues, determined in accordance with generally accepted accounting principles, to total pro forma revenues for the quarters ended September 30, 2014 and 2013 is included in the attached supplemental financial information.
Income tax expense in the third quarter of 2014 was $1.2 million, compared to $1.7 million in the third quarter of 2013. The net loss for the third quarter of 2014 was $86.6 million, compared to a net loss of $25.1 million in the third quarter of 2013. The net loss in the third quarter of 2014 included a non-cash impairment charge of approximately $47.5 million primarily resulting from the finalization of the Step 2 Goodwill Impairment analysis during the quarter.
Recent Developments
In September 2014, CPPIB made a $325 million convertible preferred equity investment in the Company. The investment provides the Company with substantial incremental liquidity, resulted in significant debt reduction and provides for additional capital necessary to support the Company's continued growth strategy. The net proceeds were used to repay all outstanding borrowings under the Company's revolving credit facility of approximately $79.5 million, repay all obligations under SFRO credit facilities of approximately $84.3 million, repay certain other debt and capital leases totaling $39.6 million, and pay accrued interest, provide working capital for general corporate purposes, and pay for transaction-related costs and expenses totaling $13.7 million. Following the repayments of debt identified for repayment and related expenses, the Company had approximately $160.7 million of unrestricted cash on hand and full access to its $100 million revolver.
Pursuant to the terms of the investment, CPPIB received shares of Series A Convertible Preferred Stock and nominated two directors for appointment to 21C's Board of Directors. The holders of a majority of the outstanding preferred stock will have customary consent rights and will be entitled to vote together with the holders of the Company's common stock on an as-converted basis under certain circumstances.
On October 31, 2014, CMS released its final rule for calendar year 2015. The Company expects this final rule to have a neutral effect on our unit pricing in 2015 as compared to 2014.
The Company received two Civil Investigative Demands ("CIDs"), one on October 22, 2014 addressed to 21C and one on October 31, 2014 addressed to SFRO, from the U.S. Department of Justice ("DOJ") pursuant to the False Claims Act. The CIDs request information concerning allegations that the Company knowingly billed for services that were not medically necessary and for services not rendered. The CIDs cover the period from January 1, 2009 to the present. It is not possible to predict when these matters will be resolved or what impact they might have on the Company's consolidated financial position, results of operations or cash flow.
A detailed Form 8-K filing that includes the specifics of the new preferred stock and related documentation is available on the U.S. Securities and Exchange Commission (SEC) website, www.sec.gov.
Conference Call
The Company will host a conference call on Friday, November 14, 2014 at 10:00 a.m. Eastern Time, during which management will discuss its financial results in further detail. The dial-in numbers are (877) 407-9039 for domestic callers and (201) 689-8470 for international callers. In addition, a telephonic replay of the call will be available until November 28, 2014. The replay dial-in numbers are (877) 870-5176 for domestic callers and (858) 384-5517 for international callers. Please use the conference ID number 13593813 to access the replay.
A live webcast and webcast replay of the call will also be available from the Events section on the corporate web site at www.21co.com.
About 21st Century Oncology Holdings, Inc.
21st Century Oncology Holdings, Inc. is the largest global, physician led provider of Integrated Cancer Care Services. The Company offers a comprehensive range of cancer treatment services, focused on delivering academic quality, cost-effective patient care in personal and convenient settings. The Company operates 178 treatment centers, including 143 centers located in 16 U.S. states. The Company also operates 35 centers located in six countries in Latin America. The Company holds market leading positions in most of its domestic local markets and abroad.
(Source: 21st Century Oncology Holdings, Inc.)
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended. Statements preceded by, followed by or that otherwise include the words "believes", "expects", "anticipates", "intends", "projects", "estimates", "plans", "may increase", "forecast" and similar expressions or future or conditional verbs such as "will", "should", "would", "may" and "could" are generally forward-looking in nature and not historical facts. Forward-looking statements are based on management's current expectations or beliefs about the Company's future plans, expectations and objectives, including, but not limited to, the Company's expected financial results and estimates for 2014 and the effects of the CMS's Final Rule for the 2014 Physician Fee Schedule on its results. These forward-looking statements are not historical facts and are subject to risks and uncertainties that could cause the actual results to differ materially from those projected in these forward-looking statements including, but not limited to reductions in Medicare reimbursement, healthcare reform, decreases in payments by managed care organizations and other commercial payers and other risk factors that may be described from time to time in the Company's filings with the Securities and Exchange Commission. Readers of this release are cautioned not to place undue reliance on forward-looking statements contained herein, which speak only as of the date stated, or if no date is stated, as of the date of this press release. The Company undertakes no obligation to publicly update or revise the forward-looking statements contained herein to reflect changed events or circumstances after the date of this release, unless required by law.
21ST CENTURY ONCOLOGY HOLDINGS, INC. | ||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
(in thousands, except share amounts) | ||
(unaudited) | ||
September 30, | December 31, | |
2014 | 2013 | |
ASSETS | ||
Current assets: | ||
Cash and cash equivalents | $ 160,721 | $ 17,462 |
Restricted cash | 7,239 | 3,768 |
Accounts receivable, net | 139,316 | 117,044 |
Prepaid expenses | 8,516 | 7,577 |
Inventories | 4,596 | 4,393 |
Deferred income taxes | 108 | 375 |
Other | 8,337 | 12,534 |
Total current assets | 328,833 | 163,153 |
Equity investments in joint ventures | 1,596 | 2,555 |
Property and equipment, net | 274,655 | 240,371 |
Real estate subject to finance obligation | 17,743 | 19,239 |
Goodwill | 442,293 | 578,013 |
Intangible assets, net | 83,727 | 85,025 |
Other assets | 35,468 | 39,835 |
Total assets | $ 1,184,315 | $ 1,128,191 |
LIABILITIES AND EQUITY | ||
Current liabilities: | ||
Accounts payable | $ 86,133 | $ 57,613 |
Accrued expenses | 97,459 | 64,021 |
Income taxes payable | 730 | 2,372 |
Current portion of long-term debt | 25,950 | 17,536 |
Current portion of finance obligation | 361 | 317 |
Other current liabilities | 12,018 | 12,237 |
Total current liabilities | 222,651 | 154,096 |
Long-term debt, less current portion | 942,963 | 974,130 |
Finance obligation, less current portion | 18,468 | 20,333 |
Embedded derivative features of Series A convertible redeemable preferred stock | 15,006 | -- |
Other long-term liabilities | 45,505 | 38,453 |
Deferred income taxes | 4,609 | 4,498 |
Total liabilities | 1,249,202 | 1,191,510 |
Series A convertible redeemable preferred stock, $0.001 par value, $1,000 stated value, 3,500,000 and -0- authorized, 385,000 and -0- issued and outstanding at September 30, 2014 and December 31, 2013, respectively | 304,271 | -- |
Noncontrolling interests - redeemable | 45,987 | 15,899 |
Commitments and Contingencies | ||
Equity: | ||
Common stock, $0.01 par value, 1,000,000 and 1,028 shares authorized at September 30, 2014 and December 31, 2013, respectively, 1,028 issued and outstanding | -- | -- |
Additional paid-in capital | 649,993 | 650,879 |
Retained deficit | (1,043,319) | (718,237) |
Accumulated other comprehensive loss, net of tax | (37,901) | (26,393) |
Total 21st Century Oncology Holdings, Inc. shareholder's deficit | (431,227) | (93,751) |
Noncontrolling interests - nonredeemable | 16,082 | 14,533 |
Total deficit | (415,145) | (79,218) |
Total liabilities and equity | $ 1,184,315 | $ 1,128,191 |
21ST CENTURY ONCOLOGY HOLDINGS, INC. | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||
(in thousands) | ||||
(unaudited) | ||||
Three Months Ended | Nine Months Ended | |||
September 30, | September 30, | |||
2014 | 2013 | 2014 | 2013 | |
Revenues: | ||||
Net patient service revenue | $ 238,403 | $ 178,655 | $ 698,261 | $ 526,475 |
Management fees | 16,762 | -- | 50,215 | -- |
Other revenue | 2,453 | 2,385 | 8,437 | 6,651 |
Total revenues | 257,618 | 181,040 | 756,913 | 533,126 |
Expenses: | ||||
Salaries and benefits | 134,599 | 98,032 | 396,311 | 293,972 |
Medical supplies | 24,771 | 15,917 | 71,007 | 46,166 |
Facility rent expenses | 14,867 | 11,427 | 47,529 | 32,285 |
Other operating expenses | 15,558 | 11,882 | 46,035 | 33,155 |
General and administrative expenses | 37,811 | 24,936 | 101,985 | 68,832 |
Depreciation and amortization | 22,388 | 16,059 | 65,272 | 46,550 |
Provision for doubtful accounts | 5,621 | 3,767 | 13,345 | 8,857 |
Interest expense, net | 30,233 | 21,952 | 87,659 | 62,369 |
Impairment loss | 47,526 | -- | 229,526 | -- |
Early extinguishment of debt | 8,558 | -- | 8,558 | -- |
Equity initial public offering expenses | 742 | -- | 4,905 | -- |
Loss on sale leaseback transaction | -- | -- | 135 | -- |
Fair value adjustment of earn-out liability | 209 | -- | 612 | -- |
Gain on the sale of an interest in a joint venture | -- | -- | -- | (1,460) |
Loss on foreign currency transactions | 210 | 364 | 317 | 1,166 |
Loss (gain) on foreign currency derivative contracts | -- | 67 | (4) | 309 |
Total expenses | 343,093 | 204,403 | 1,073,192 | 592,201 |
Loss before income taxes | (85,475) | (23,363) | (316,279) | (59,075) |
Income tax expense | 1,173 | 1,699 | 4,213 | 4,849 |
Net loss | (86,648) | (25,062) | (320,492) | (63,924) |
Net income attributable to noncontrolling interests- redeemable and non-redeemable | (729) | (347) | (4,590) | (1,365) |
Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder | (87,377) | (25,409) | (325,082) | (65,289) |
Other comprehensive loss: | ||||
Unrealized loss on foreign currency translation | (1,990) | (4,228) | (12,596) | (9,817) |
Other comprehensive loss | (1,990) | (4,228) | (12,596) | (9,817) |
Comprehensive loss: | (88,638) | (29,290) | (333,088) | (73,741) |
Comprehensive income attributable to noncontrolling interests- redeemable and non-redeemable | (512) | (25) | (3,502) | (516) |
Comprehensive loss attributable to 21st Century Oncology Holdings, Inc. shareholder | $ (89,150) | $ (29,315) | $ (336,590) | $ (74,257) |
21ST CENTURY ONCOLOGY HOLDINGS, INC. | ||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
(in thousands) | ||
(unaudited) | ||
Nine Months Ended | ||
September 30, | ||
2014 | 2013 | |
Cash flows from operating activities | ||
Net loss | $ (320,492) | $ (63,924) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation | 54,003 | 40,062 |
Amortization | 11,269 | 6,488 |
Deferred rent expense | 477 | 636 |
Deferred income taxes | 638 | (1,989) |
Stock-based compensation | 99 | 481 |
Provision for doubtful accounts | 13,345 | 8,857 |
Loss on the sale/disposal of property and equipment | 256 | 212 |
Loss on sale leaseback transaction | 135 | -- |
Impairment loss | 229,526 | -- |
Early extinguishment of debt | 8,558 | -- |
Equity initial public offering expenses | 4,905 | -- |
Gain on the sale of an interest in a joint venture | -- | (1,460) |
Loss on foreign currency transactions | 105 | 137 |
(Gain) loss on foreign currency derivative contracts | (4) | 309 |
Fair value adjustment of earn-out liability | 612 | -- |
Amortization of debt discount | 2,035 | 703 |
Amortization of loan costs | 4,821 | 4,128 |
Equity interest in net loss of joint ventures | 161 | 425 |
Distribution received from unconsolidated joint ventures | 168 | -- |
Changes in operating assets and liabilities: | ||
Accounts receivable and other current assets | (31,317) | (25,578) |
Income taxes payable | (933) | 343 |
Inventories | (195) | (591) |
Prepaid expenses | 2,747 | 194 |
Accounts payable and other current liabilities | 12,320 | 12,591 |
Accrued deferred compensation | 1,059 | 1,019 |
Accrued expenses / other current liabilities | 17,392 | 19,519 |
Net cash provided by operating activities | 11,690 | 2,562 |
Cash flows from investing activities | ||
Purchase of property and equipment | (44,269) | (25,109) |
Acquisition of medical practices | (50,121) | (24,250) |
Restricted cash associated with medical practice acquisitions | (3,471) | (5,002) |
Proceeds from the sale of equity interest in a joint venture | -- | 1,460 |
Proceeds from the sale of property and equipment | 91 | 64 |
Loans to employees | (871) | (559) |
Contribution of capital to joint venture entities | (620) | (542) |
Purchase of noncontrolling interest - non-redeemable | -- | (1,509) |
Proceeds (payment) of foreign currency derivative contracts | 26 | (171) |
Premiums on life insurance policies | (851) | (901) |
Change in other assets and other liabilities | (256) | (53) |
Net cash used in investing activities | (100,342) | (56,572) |
21ST CENTURY ONCOLOGY HOLDINGS, INC. | ||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
(in thousands) | ||
(unaudited) | ||
Nine Months Ended | ||
September 30, | ||
2014 | 2013 | |
Cash flows from financing activities | ||
Proceeds from issuance of debt | 164,556 | 207,650 |
Principal repayments of debt | (250,208) | (133,917) |
Repayments of finance obligation | (167) | (142) |
Proceeds from issuance of Series A convertible redeemable preferred stock | 325,000 | -- |
Proceeds from issuance of noncontrolling interest | 1,250 | -- |
Proceeds from noncontrolling interest holders - redeemable and non-redeemable | 229 | 765 |
Cash distributions to noncontrolling interest holders - redeemable and non-redeemable | (2,050) | (1,896) |
Payments of costs for equity securities offering | (4,220) | -- |
Payments of loan costs | (2,437) | (1,359) |
Net cash provided by financing activities | 231,953 | 71,101 |
Effect of exchange rate changes on cash and cash equivalents | (42) | (32) |
Net increase in cash and cash equivalents | 143,259 | 17,059 |
Cash and cash equivalents, beginning of period | 17,462 | 15,410 |
Cash and cash equivalents, end of period | $ 160,721 | $ 32,469 |
Supplemental disclosure of noncash transactions | ||
Finance obligation related to real estate projects | $ 2,465 | $ 5,337 |
Derecognition of finance obligation related to real estate projects | $ 4,119 | $ -- |
Capital lease obligations related to the purchase of equipment | $ 7,069 | $ 79 |
Medical equipment and service contract component related to the acquisition of medical equipment through accounts payable | $ 12,486 | $ -- |
Issuance of notes payable relating to the acquisition of medical practices | $ 2,000 | $ 2,097 |
Liability relating to the escrow debt and purchase price of medical practices | $ 2,970 | $ -- |
Capital lease obligations related to the acquisition of medical practices | $ 47,796 | $ 8,748 |
Earn-out accrual related to the acquisition of medical practices | $ 1,003 | $ 400 |
Amounts payable to sellers in the purchase of a medical practice | $ 295 | $ -- |
Incurred offering costs | $ 685 | $ -- |
Issuance costs related to the series A convertible preferred stock | $ 6,792 | $ -- |
Noncash dividend declared to noncontrolling interest | $ 246 | $ 140 |
Accrued dividends on Series A convertible preferred stock | $ 982 | $ -- |
Accretion of redemption value on Series A convertible preferred stock | $ 87 | $ -- |
Noncash deconsolidation of noncontrolling interest | $ -- | $ 9 |
Noncash contribution of capital by noncontrolling interest holders | $ -- | $ 4,235 |
Termination of prepaid services by noncontrolling interest holder | $ -- | $ 2,551 |
Issuance of notes payable relating to the earn-out liability in the acquisition of Medical Developers | $ -- | $ 2,679 |
Issuance of equity LLC units relating to the earn-out liability in the acquisition of Medical Developers | $ -- | $ 705 |
21ST CENTURY ONCOLOGY HOLDINGS, INC. | ||||
Supplemental Financial Information (Unaudited) | ||||
Reconciliation of Total Pro-forma Revenue and Pro-forma Adjusted EBITDA to Net Loss Attributable | ||||
to 21st Century Oncology Holdings, Inc. Shareholder | ||||
Three Months Ended | Nine Months Ended | |||
September 30, | September 30, | |||
2014 | 2013 | 2014 | 2013 | |
(in thousands): | ||||
Total revenues | $ 257,618 | $ 181,040 | $ 756,913 | $ 533,126 |
Pro-forma full period effect of acquisitions (a) | -- | 114 | 8,819 | 35,288 |
Total pro-forma revenues | $ 257,618 | $ 181,154 | $ 765,732 | $ 568,414 |
Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder | $ (87,377) | $ (25,409) | $ (325,082) | $ (65,289) |
Income tax expense | 1,173 | 1,699 | 4,213 | 4,849 |
Interest expense, net | 30,233 | 21,952 | 87,659 | 62,369 |
Depreciation and amortization | 22,388 | 16,059 | 65,272 | 46,550 |
Impairment loss | 47,526 | -- | 229,526 | -- |
Early extinguishment of debt | 8,558 | -- | 8,558 | -- |
Equity initial public offering expenses | 742 | -- | 4,905 | -- |
Gain on the sale of an interest in a joint venture | -- | -- | -- | (1,460) |
Loss on sale leaseback transaction | -- | -- | 135 | -- |
Fair value adjustment of earn-out liability | 209 | -- | 612 | -- |
Loss (gain) on foreign currency derivative contracts | -- | 67 | (4) | 309 |
Management fees (b) | 71 | 225 | 411 | 706 |
Non-cash expenses (c) | 1,120 | 1,039 | 3,090 | 3,189 |
Sale-lease back adjustments (d) | (331) | (357) | (963) | (1,017) |
Acquisition-related costs (e) | 1,371 | 3,498 | 9,955 | 7,302 |
Other expenses (f) | 3,113 | 1,942 | 6,937 | 4,297 |
Litigation settlement (g) | 1,097 | 338 | 4,423 | 1,858 |
Tradename / rebranding initiative (h) | 30 | 370 | 622 | 711 |
Expenses associated with idle / closed treatment facilities (i) | 876 | 1,152 | 3,320 | 2,130 |
Expenses associated with note-holder negotiations and management of liquidity (j) | 9,258 | -- | 9,378 | -- |
Pro-forma full period effect of acquisition EBITDA (a) | -- | 639 | 742 | 8,303 |
Pro-forma Adjusted EBITDA (1) | $ 40,057 | $ 23,214 | $ 113,709 | $ 74,807 |
Pro-forma Adjusted EBITDA as a percentage of total pro-forma revenues | 15.5% | 12.8% | 14.8% | 13.2% |
(1) Pro-forma Adjusted EBITDA is defined as income (loss) before interest expense (net of interest income), income taxes, depreciation and amortization, gain on the sale of an interest in a joint venture, loss on sale leaseback transaction, early extinguishment of debt, fair value adjustment of earn-out liability, impairment loss, foreign currency derivative contract loss (gain), management fees accrued to our sponsor, non-cash expenses including costs relating to stock compensation, amortization of straight-line rent and amortization of capital expenditures relating to repairs and maintenance, non-cash equipment rent, sale-lease back adjustments, acquisition-related costs, other expenses including loss on sale of assets, severance payments related to termination of employee staff reductions, tail premiums on termed physicians, franchise taxes, costs relating to consulting services on Medicare reimbursement, litigation settlements with physicians, expenses associated with the provision for income taxes, costs associated with tradename and rebranding initiatives, expenses associated with idle / closed radiation therapy treatment facilities and pro-forma full period effect of acquisition EBITDA. | ||||
(a) Pro-forma amounts related to adjustments to total revenues and Pro-forma Adjusted EBITDA to reflect the full period effect of our acquisitions and Value Added Services contracts completed during 2014 and 2013. The adjustments reflect the impact to our total revenues and Pro-forma Adjusted EBITDA as if the acquisitions and Value Added Services contracts had occurred at the beginning of the year. | ||||
(b) Management fees are fees accrued to our sponsor, Vestar Capital Partners. | ||||
(c) Non-cash expenses including costs relating to stock compensation, amortization of straight-line rent, amortization of capital expenditures relating to warranty arrangements amortized to repairs and maintenance and non-cash equipment rent. | ||||
(d) Sale-lease back adjustments relates to the adjustment of benefit derived from the classification of operating leases as finance obligations reflecting a reclassification of interest expense and depreciation and amortization expense as rent expense. | ||||
(e) Acquisition related costs associated with ASC 805, "Business Combinations", including professional fees, corporate development, integration and due diligence costs relating to the acquisition of medical practices. | ||||
(f) Other expenses include loss on sale of assets, severance payments related to termination of employee staff reductions, tail premiums paid on terminated physicians, franchise taxes and costs relating to consulting services on Medicare reimbursement. | ||||
(g) Litigation settlement relates to costs associated with the termination of physicians and loss contingency reserves related to the Medicare diagnostic testing matter. | ||||
(h) Expenses related to the costs associated with the Company's tradename and rebranding initiatives. | ||||
(i) Expenses associated with idle / closed radiation therapy treatment facilities. | ||||
(j) Expenses associated with negotiating with note-holders, recapitalization support agreement and legal and consulting fees associated with management of liquidity. | ||||
We believe the Pro-forma Adjusted EBITDA provides useful information about our financial performance to investors, lenders, financial analysts and rating agencies since these groups have historically used EBITDA-related measures in the healthcare industry, along with other measures, to estimate the value of a company, to make informed investment decisions, to evaluate a company's leverage capacity and its ability to meet its debt service requirements. Pro-forma Adjusted EBITDA eliminates the uneven effect of non-cash depreciation of tangible assets and amortization of intangible assets, much of which results from acquisitions accounted for under the purchase method of accounting. Pro-forma Adjusted EBITDA is also used by us to measure individual performance for incentive compensation purposes and as an analytical indicator for purposes of allocating resources to our operating business and assessing their performance, both internally and relative to our peers, as well as to evaluate the performance of our operating management teams, and for purposes in the calculation of debt covenants and related disclosures. | ||||
Pro-forma Adjusted EBITDA is not intended as a substitute for net income (loss) attributable to 21st Century Oncology Holdings, Inc. shareholder, operating cash flows or other cash flow data determined in accordance with accounting principles generally accepted in the United States. Due to varying methods of calculation, Pro-forma Adjusted EBITDA as presented may not be comparable to similarly titled measures of other companies. | ||||
21ST CENTURY ONCOLOGY HOLDINGS, INC. | ||||||
KEY OPERATING STATISTICS | ||||||
(unaudited) | ||||||
Three Months Ended | Nine Months Ended | |||||
September 30, | % | September 30, | % | |||
United States | 2014 | 2013 | Change | 2014 | 2013 | Change |
Number of treatment days | 64 | 64 | 191 | 191 | ||
Total RVU's - freestanding centers | 4,014,187 | 2,767,016 | 45.1% | 11,879,135 | 8,313,913 | 42.9% |
RVU's per day - freestanding centers | 62,722 | 43,235 | 45.1% | 62,194 | 43,528 | 42.9% |
Percentage change in RVU's per day - freestanding centers - same market basis | -1.3% | -1.9% | -0.6% | -4.8% | ||
Total treatments - freestanding centers | 200,654 | 128,765 | 55.8% | 595,958 | 386,574 | 54.2% |
Treatments per day - freestanding centers | 3,135 | 2,012 | 55.8% | 3,120 | 2,024 | 54.2% |
Percentage change in revenue per treatment - freestanding centers - same market basis | 1.1% | -4.2% | 3.6% | -5.9% | ||
Percentage change in treatments per day - freestanding centers - same market basis | 2.4% | 6.4% | 2.7% | 3.2% | ||
Percentage change in freestanding revenues - same market basis | 3.5% | 3.5% | 6.4% | -2.9% | ||
Radiation oncology cases completed: | ||||||
3-D cases | 2,081 | 1,929 | 5,918 | 5,534 | ||
IMRT cases | 3,269 | 3,039 | 9,483 | 8,844 | ||
Other cases | 565 | 484 | 1,671 | 1,534 | ||
Total radiation oncology cases completed | 5,915 | 5,452 | 8.5% | 17,072 | 15,912 | 7.3% |
Treatments per radiation oncology case completed | 23.8 | 22.9 | 23.9 | 23.8 | ||
Revenue per radiation oncology case | $ 18,854 | $ 18,044 | $ 19,103 | $ 18,816 | ||
Number of employed, contracted and affiliated physicians: | ||||||
Radiation oncologists | 183 | 116 | ||||
Urologists | 170 | 118 | ||||
Surgeons | 50 | 39 | ||||
Medical oncologists | 41 | 23 | ||||
Gynecologic oncologists | 9 | 7 | ||||
Other physicians | 25 | 9 | ||||
Affiliated physicians | 316 | 269 | ||||
Total physicians | 794 | 581 | 36.7% | |||
Treatment centers - freestanding (global) | 167 | 127 | 31.5% | |||
Treatment centers - professional / other (global) | 11 | 5 | 120.0% | |||
Total treatment centers | 178 | 132 | 34.8% | |||
Days sales outstanding at quarter end | 41 | 35 | ||||
Net patient service revenue (global) - professional services only (in thousands) | $ 78,001 | $ 54,338 | $ 230,919 | $ 159,816 | ||
Net patient service revenue (global) - excluding physician practice expense (in thousands) | $ 260,953 | $ 178,655 | $ 764,595 | $ 526,475 | ||
Three Months Ended | Nine Months Ended | |||||
September 30, | % | September 30, | % | |||
International | 2014 | 2013 | Change | 2014 | 2013 | Change |
Number of new cases | ||||||
2-D cases | 745 | 931 | 2,318 | 2,868 | ||
3-D cases | 2,943 | 2,855 | 8,862 | 7,639 | ||
IMRT / IGRT cases | 792 | 590 | 2,181 | 1,396 | ||
Total | 4,480 | 4,376 | 2.4% | 13,361 | 11,903 | 12.2% |
Revenue per radiation oncology case | $ 5,761 | $ 5,617 | $ 5,328 | $ 5,698 | ||