FORT MYERS, Fla., Sept. 20, 2016 (GLOBE NEWSWIRE) -- 21st Century Oncology Holdings, Inc. (“21C” or the “Company”), the leading global provider of integrated cancer care (ICC) services, announced today its financial results for the first and second quarters of 2016.
First Quarter 2016
Total revenues for the first quarter of 2016 were $270.3 million, a decline of 1.9% as compared to total revenues of $275.6 million for the same period in the prior year. Net patient service revenue in our ICC line of business declined $2.9 million, or 3.2%, as compared to the same period in the prior year predominantly due to the conversion of our Jacksonville medical oncology group to a professional services agreement (PSA) with the University of Florida, whereby the Company will invoice for chemotherapy administration only, eliminating the drug portion. In addition, our international net patient service revenue declined $3.3 million, or 12.3%, as compared to the same period in the prior year due to the devaluation in the Argentine Peso. Constant currency international revenue growth was approximately 33.3%, or $7.2 million, quarter over quarter.
Net income for the first quarter of 2016 was $2.6 million as compared to a net loss of $14.4 million for the same period in the prior year. The improvement in net income resulted primarily from a $12.6 million gain on the contribution of a radiation facility to a health system joint venture and changes in fair value measurements of $4.7 million.
Adjusted EBITDA in the first quarter of 2016 was $39.0 million, or 14.4% of total revenues, as compared to $42.3 million, or 15.3% of total revenues, in the first quarter of 2015. The contributors to the adjusted EBITDA decline were a $5.3 million reduction in revenue offset by a $6.3 million decrease in salaries and benefits. In addition, a net increase in medical supply expense of $1.2 million occurred in the first quarter of 2016 as compared to the first quarter of 2015. This increase was the result of the expansion of medical oncology in SFRO locations, offset to some degree by a reduction in medical supply cost as a result of converting the Jacksonville medical oncology group to a PSA. Further contributors to the adjusted EBITDA reduction were an increase in other operating and general and administrative costs of $3.5 million offset by a reduction in cash distributions to non-controlling interests of $0.8 million.
Total radiation oncology treatment plans increased 0.2% in the first quarter of 2016 as compared to the same period in the prior year, and same market radiation oncology treatment plans increased 0.7% for the first quarter of 2016 as compared to the same period in the prior year.
Total radiation oncology treatments per day during the first quarter of 2016 declined 3.0% as compared to the same period in 2015 due to the closing of our Bronx-Lebanon and Riverhead centers as well as the transition of our Greenville, North Carolina radiation center to an unconsolidated health system joint venture. Same market radiation oncology treatments per day for the first quarter of 2016 declined 1.5% as compared to the same period in 2015. As previously disclosed, the Company has experienced a decrease in treatments per case for breast and some newly diagnosed lung cancers as a result of advances in hypo-fractionated external beam radiotherapy and stereotactic radiosurgery.
Net patient service revenue per radiation oncology treatment increased 1.8% in the first quarter of 2016 as compared to the same period in the prior year and same market net patient service revenue per radiation oncology treatment increased 0.2% in the first quarter of 2016 as compared to the same period in the prior year. While this change is insignificant, on a same market basis, there are a number of factors affecting this rate, comparatively. The simulation code bundling that was implemented in July 2015 reduced our rate by 1.6% for the first quarter of 2016 as compared to the same period in the prior year. In addition, the net effect of the 2016 Final Rule on the Physician Fee Schedule reduced our rate by 1.4% for the first quarter of 2016 as compared to the same period in the prior year. A further rate reduction of 0.4% occurred in the first quarter of 2016 as compared to the same period in the prior year as a result of not achieving the meaningful use criteria for electronic health records. Offsetting these reductions in revenue was a 1.0% increase in our rate for the first quarter of 2016 as compared to the same period in 2015 as a result of the SFRO facilities being added to the existing 21C commercial insurance fee schedules. Finally, our rate in the first quarter of 2015 as compared to the first quarter of 2016 was negatively affected 2.6% by uncertainties driven by the newly issued IMRT G codes.
The number of open cases in our international line of business in the first quarter of 2016 increased 10.5% as compared to the same period in the prior year. Due to devaluation in the Argentine Peso, revenue per radiation oncology case declined 20.6% for the first quarter of 2016 as compared to the same period in the prior year. In constant currency, our international revenue per open case increased by approximately 12.7%.
Second Quarter 2016 Results
Total revenues for the second quarter of 2016 were $258.4 million, a decline of 7.1% as compared to total revenues of $278.2 million for the same period in the prior year. Net patient service revenue in our domestic freestanding line of business declined $12.9 million, or 8.1%, as compared to the same period in the prior year. This decline was driven by a 4.7% decline in total radiation oncology treatments per day and a 3.5% decline in net patient service revenue per radiation oncology treatment for the second quarter of 2016 as compared to the same period in the prior year. Net patient service revenue in our ICC line of business declined $5.1 million, or 5.8%, as compared to the same period in the prior year predominantly due to the conversion of our Jacksonville medical oncology group to a professional services agreement (PSA) with the University of Florida. Our international net patient service revenue declined $1.4 million, or 4.7%, as compared to the same period in the prior year due to the devaluation in the Argentine Peso. Constant currency international revenue growth was approximately 37%, or $10.0 million, quarter over quarter. In addition, our net patient service revenue professional services declined $0.6 million in the second quarter 2016 as compared to the same period in the prior year.
Net loss for the second quarter of 2016 was $17.1 million as compared to a net loss of $64.2 million for the same period in the prior year. The improvement in net loss resulted primarily from a $9.7 million reduction in salaries and benefits, a $7.7 million reduction in general and administrative expenses and changes in fair value measurements of $14.7 million for the second quarter 2016 as compared to the same period in 2015. In addition, the second quarter of 2015 included a $37.4 million expense associated with the early extinguishment of debt. These amounts were offset by a $19.8 million decline in total revenues in the second quarter of 2016 as compared to the second quarter of 2015, a $1.8 million impairment loss in the second quarter of 2016 and a $1.4 million gain on insurance recoveries in the second quarter of 2015.
Adjusted EBITDA in the second quarter of 2016 was $33.4 million, or 12.9% of total revenues, as compared to $46.2 million, or 16.6% of total revenues, in the second quarter of 2015. The contributors to the adjusted EBITDA decline were a $19.8 million reduction in revenue offset by a $9.7 million decrease in salaries and benefits, and an increase of $2.7 million in other operating expenses.
Total radiation oncology treatment plans decreased 4.8% in the second quarter of 2016 as compared to the same period in the prior year, and same market radiation oncology treatment plans decreased 3.2% for the second quarter of 2016 as compared to the same period in the prior year.
Total radiation oncology treatments per day during the second quarter of 2016 declined 4.7% as compared to the same period in 2015 due to the closing of our Bronx-Lebanon and Riverhead centers as well as the conversion of our Greenville, North Carolina radiation center to an unconsolidated health system joint venture in January 2016. Same market radiation oncology treatments per day for the second quarter of 2016 declined 3.1% as compared to the same period in 2015.
Net patient service revenue per radiation oncology treatment decreased 3.5% in the second quarter of 2016 as compared to the same period in the prior year and same market net patient service revenue per radiation oncology treatment decreased 3.6% in the second quarter of 2016 as compared to the same period in the prior year. The simulation code bundling that was implemented in July 2015 reduced our rate by 1.4% for the second quarter of 2016 as compared to the same period in the prior year. In addition, the net effect of the 2016 Final Rule on the Physician Fee Schedule reduced our rate by 1.4% for the second quarter of 2016 as compared to the same period in the prior year. A rate reduction of 0.4% occurred in the second quarter of 2016 as compared to the same period in the prior year as a result of not achieving the meaningful use criteria for electronic health records. Our rate in the second quarter of 2015 as compared to the second quarter of 2016 was negatively affected 2.6% by uncertainties driven by the newly issued IMRT G codes. Offsetting these rate reductions was a 1.7% increase in our rate for the second quarter of 2016 as compared to the same period in 2015 as a result of the SFRO facilities being added to the existing 21C commercial insurance fee schedules.
The number of open cases in our international line of business in the second quarter of 2016 increased 7.8% as compared to the same period in the prior year. Due to devaluation in the Argentine Peso, revenue per radiation oncology case declined 11.6% for the second quarter of 2016 as compared to the same period in the prior year. In constant currency, our international revenue per open case increased by approximately 17.0%.
Management Transition and Success with First Capital Event
On September 9, 2016, 21st Century Oncology announced that the Company has appointed William R. Spalding as President and Chief Executive Officer of the Company, effective as of such date and that Dr. Daniel E. Dosoretz will continue to serve as a member of the Company’s board of directors and senior physician.
The Company also announced, on September 9, 2016 that Canada Pension Plan Investment Board (CPPIB), a professional investment management organization, has purchased an additional $25 million of preferred stock in the company.
Bill Spalding, President and Chief Executive Officer, commented, “Dr. Dosoretz led the development of a remarkable organization that today has unparalleled size, scale and relevance in the delivery of academic-quality, integrated cancer care. Our integrated business model is a distinct advantage, and positions the Company to succeed in the current health care environment. The Company’s unwavering commitment to providing patients with high-quality, efficient care remains unchanged.”
Mr. Spalding continued, “I’m grateful to CPPIB for their continued commitment to 21st Century Oncology.”
Earnings Conference Call
The Company will host a conference call on Thursday, September 29, 2016 at 2:00 p.m. Eastern Time, during which management will discuss the financial results of the first and second quarters of 2016. The conference call and replay of the conference call may be accessed as follows:
Dial-in numbers: 877-407-9039 (Domestic); 201-689-8470 (International)
Replay Dial-in Numbers (Available until October 13, 2016): 877-870-5176 (Domestic); 858-384-5517 (International); Replay Pin Number: 13645618
A live webcast and webcast replay of the call will also be available from the Events section of the corporate website at www.21co.com.
About 21st Century Oncology Holdings, Inc.
21st Century Oncology Holdings, Inc. is the largest global 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. As of June 30, 2016, the Company operated 183 treatment centers, including 147 centers located in 17 U.S. states and 36 centers located in seven countries in Latin America.
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. 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, state and federal investigations, claims and litigation matters, decreases in payments by managed care organizations and other commercial payers, liquidity, leverage ratios and compliance with other debt covenants 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) | |||||||||
| March 31, | December 31, | ||||||||
| 2016 | 2015 | ||||||||
| (unaudited) | (a) | ||||||||
| ASSETS | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 72,403 | $ | 65,211 | |||||
| Restricted cash | 196 | 195 | |||||||
| Marketable securities | 1,041 | 1,078 | |||||||
| Accounts receivable, net | 146,436 | 122,355 | |||||||
| Prepaid expenses | 8,077 | 7,822 | |||||||
| Inventories | 3,440 | 3,918 | |||||||
| Income tax receivable | 4,174 | 4,966 | |||||||
| Other | 15,843 | 15,732 | |||||||
| Total current assets | 251,610 | 221,277 | |||||||
| Equity investments in joint ventures | 14,874 | 1,214 | |||||||
| Property and equipment, net | 242,005 | 238,585 | |||||||
| Real estate subject to finance obligation | 12,768 | 12,631 | |||||||
| Goodwill | 492,896 | 498,680 | |||||||
| Intangible assets, net | 66,671 | 70,115 | |||||||
| Embedded derivative & other financial instrument features of Series A convertible redeemable preferred stock | 21,407 | 17,883 | |||||||
| Other assets | 41,394 | 41,588 | |||||||
| Deferred income taxes | 1,850 | 1,888 | |||||||
| Total assets | $ | 1,145,475 | $ | 1,103,861 | |||||
| LIABILITIES AND DEFICIT | |||||||||
| Current liabilities: | |||||||||
| Accounts payable | $ | 73,617 | $ | 59,888 | |||||
| Accrued expenses | 84,625 | 111,653 | |||||||
| Income taxes payable | 1,923 | 2,501 | |||||||
| Current portion of long-term debt | 1,094,066 | 1,023,877 | |||||||
| Current portion of finance obligation | 276 | 283 | |||||||
| Other current liabilities | 14,602 | 14,265 | |||||||
| Total current liabilities | 1,269,109 | 1,212,467 | |||||||
| Long-term debt, less current portion | 34,007 | 49,233 | |||||||
| Finance obligation, less current portion | 13,567 | 13,318 | |||||||
| Embedded derivative & other financial instrument features of Series A convertible redeemable preferred stock | 21,110 | 19,911 | |||||||
| Other long-term liabilities | 69,878 | 70,928 | |||||||
| Deferred income taxes | 4,477 | 3,887 | |||||||
| Total liabilities | 1,412,148 | 1,369,744 | |||||||
| Series A convertible redeemable preferred stock, $0.001 par value, $1,000 stated value, 3,500,000 authorized, 385,000 issued and outstanding at March 31, 2016 and December 31, 2015 | 409,332 | 389,514 | |||||||
| Noncontrolling interests - redeemable | 19,955 | 19,233 | |||||||
| Commitments and Contingencies | |||||||||
| Equity: | |||||||||
| Common stock, $0.01 par value, 1,000,000 shares authorized 1,059 shares issued and outstanding at March 31, 2016 and December 31, 2015 | - | - | |||||||
| Additional paid-in capital | 559,967 | 579,920 | |||||||
| Retained deficit | (1,225,473 | ) | (1,226,298 | ) | |||||
| Accumulated other comprehensive loss, net of tax | (57,498 | ) | (54,574 | ) | |||||
| Total 21st Century Oncology Holdings, Inc. shareholder's deficit | (723,004 | ) | (700,952 | ) | |||||
| Noncontrolling interests - nonredeemable | 27,044 | 26,322 | |||||||
| Total deficit | (695,960 | ) | (674,630 | ) | |||||
| Total liabilities and deficit | $ | 1,145,475 | $ | 1,103,861 | |||||
| (a) Derived from audited financial statements | |||||||||
| 21ST CENTURY ONCOLOGY HOLDINGS, INC. | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||||
| (in thousands) | ||||||||
| (unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2016 | 2015 | |||||||
| Revenues: | ||||||||
| Net patient service revenue | $ | 250,784 | $ | 254,255 | ||||
| Management fees | 14,631 | 15,870 | ||||||
| Other revenue | 4,883 | 5,508 | ||||||
| Total revenues | 270,298 | 275,633 | ||||||
| Expenses: | ||||||||
| Salaries and benefits | 140,098 | 146,959 | ||||||
| Medical supplies | 27,510 | 26,291 | ||||||
| Facility rent expenses | 17,342 | 16,821 | ||||||
| Other operating expenses | 16,104 | 14,948 | ||||||
| General and administrative expenses | 29,373 | 28,974 | ||||||
| Depreciation and amortization | 21,120 | 22,132 | ||||||
| Provision for doubtful accounts | 4,696 | 4,313 | ||||||
| Interest expense, net | 24,619 | 25,687 | ||||||
| Other gains and losses | (12,629 | ) | (384 | ) | ||||
| Fair value measurements | (2,534 | ) | 2,153 | |||||
| Loss on foreign currency transactions | 71 | 238 | ||||||
| Total expenses | 265,770 | 288,132 | ||||||
| Income (loss) before income taxes and equity interest in net income of joint ventures | 4,528 | (12,499 | ) | |||||
| Income tax expense | 2,259 | 1,933 | ||||||
| Net income (loss) before equity interest in net income of joint ventures | 2,269 | (14,432 | ) | |||||
| Equity interest in net income of joint ventures, net of tax | 352 | 24 | ||||||
| Net income (loss) | 2,621 | (14,408 | ) | |||||
| Net income attributable to noncontrolling interests- redeemable and non-redeemable | (1,796 | ) | (2,259 | ) | ||||
| Net income (loss) attributable to 21st Century Oncology Holdings, Inc. shareholder | 825 | (16,667 | ) | |||||
| Other comprehensive loss, net of tax: | ||||||||
| Unrealized loss on foreign currency translation | (3,173 | ) | (2,193 | ) | ||||
| Other comprehensive loss | (3,173 | ) | (2,193 | ) | ||||
| Comprehensive loss | (552 | ) | (16,601 | ) | ||||
| Comprehensive income attributable to noncontrolling interests- redeemable and non-redeemable | (1,547 | ) | (1,952 | ) | ||||
| Comprehensive loss attributable to 21st Century | ||||||||
| Oncology Holdings, Inc. shareholder | $ | (2,099 | ) | $ | (18,553 | ) | ||
| 21ST CENTURY ONCOLOGY HOLDINGS, INC. | |||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||
| (in thousands) | |||||||||||||
| (unaudited) | |||||||||||||
| Three Months Ended | |||||||||||||
| March 31, | |||||||||||||
| 2016 | 2015 | ||||||||||||
| Cash flows from operating activities | |||||||||||||
| Net income (loss) | $ | 2,621 | $ | (14,408 | ) | ||||||||
| Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | |||||||||||||
| Depreciation and amortization | 21,120 | 22,132 | |||||||||||
| Deferred rent expense | 97 | 165 | |||||||||||
| Deferred income taxes | 415 | (437 | ) | ||||||||||
| Stock-based compensation | - | 1 | |||||||||||
| Provision for doubtful accounts | 4,696 | 4,313 | |||||||||||
| Gain on the sale/disposal of property and equipment | - | (384 | ) | ||||||||||
| Gain on the contribution of a radiation facility to a joint venture | (12,629 | ) | - | ||||||||||
| Loss on foreign currency transactions | 25 | 141 | |||||||||||
| Fair value adjustment of earn-out liabilities | 1 | 460 | |||||||||||
| Fair value adjustment of embedded derivatives and other financial instruments | (2,535 | ) | 1,693 | ||||||||||
| Amortization of debt discount | 475 | 446 | |||||||||||
| Amortization of loan costs | 1,034 | 1,455 | |||||||||||
| Paid in kind interest on notes payable | 393 | - | |||||||||||
| Equity interest in net income of joint ventures, net of tax | (352 | ) | (24 | ) | |||||||||
| Distribution received from unconsolidated joint ventures | - | 53 | |||||||||||
| Changes in operating assets and liabilities: | |||||||||||||
| Accounts receivable and other current assets | (33,244 | ) | (22,445 | ) | |||||||||
| Prepaid expenses and other assets | 958 | 623 | |||||||||||
| Inventories | 547 | 183 | |||||||||||
| Accounts payable | 5,511 | 4,106 | |||||||||||
| Accrued deferred compensation | 366 | 393 | |||||||||||
| Income taxes payable | 52 | 1,048 | |||||||||||
| Accrued expenses / other liabilities | (26,239 | ) | 23,105 | ||||||||||
| Net cash (used in) provided by operating activities | (36,688 | ) | 22,619 | ||||||||||
| Cash flows from investing activities | |||||||||||||
| Purchase of property and equipment | (12,259 | ) | (12,199 | ) | |||||||||
| Acquisition of medical practices | (129 | ) | (25,965 | ) | |||||||||
| Change in restricted cash associated with medical practice acquisitions | (1 | ) | (815 | ) | |||||||||
| Proceeds from the sale of equity interest in a joint venture | 6,170 | - | |||||||||||
| Purchase of joint venture interests | (502 | ) | - | ||||||||||
| Proceeds from the sale of property and equipment | 29 | 1,103 | |||||||||||
| Loans to employees | (35 | ) | (117 | ) | |||||||||
| Purchase of company owned life insurance policies | (394 | ) | (321 | ) | |||||||||
| Change in other assets and other liabilities | 194 | (62 | ) | ||||||||||
| Net cash used in investing activities | (6,927 | ) | (38,376 | ) | |||||||||
| Cash flows from financing activities | |||||||||||||
| Proceeds from issuance of debt | 60,033 | 2,863 | |||||||||||
| Principal repayments of debt | (8,789 | ) | (9,901 | ) | |||||||||
| Repayments of finance obligation | (52 | ) | (84 | ) | |||||||||
| Proceeds from issuance of noncontrolling interest | - | 743 | |||||||||||
| Proceeds from noncontrolling interest holders - redeemable and non-redeemable | - | 3,230 | |||||||||||
| Purchase of noncontrolling interest - non-redeemable | - | (1,233 | ) | ||||||||||
| Cash distributions to noncontrolling interest holders - redeemable and non-redeemable | (214 | ) | (964 | ) | |||||||||
| Payments for contingent considerations | (149 | ) | - | ||||||||||
| Net cash provided by (used in) financing activities | 50,829 | (5,346 | ) | ||||||||||
| Effect of exchange rate changes on cash and cash equivalents | (22 | ) | (6 | ) | |||||||||
| Net increase (decrease) in cash and cash equivalents | 7,192 | (21,109 | ) | ||||||||||
| Cash and cash equivalents, beginning of period | 65,211 | 99,082 | |||||||||||
| Cash and cash equivalents, end of period | $ | 72,403 | $ | 77,973 | |||||||||
| 21ST CENTURY ONCOLOGY HOLDINGS, INC. | |||||||||||
| Supplemental Financial Information (Unaudited) | |||||||||||
| Reconciliation of Total Revenue and Adjusted EBITDA to Net Loss Attributable | |||||||||||
| to 21st Century Oncology Holdings, Inc. Shareholder | |||||||||||
| Three Months Ended | |||||||||||
| March 31, | |||||||||||
| 2016 | 2015 | ||||||||||
| (in thousands): | |||||||||||
| Total revenues | $ | 270,298 | $ | 275,633 | |||||||
| Net income (loss) attributable to 21st Century Oncology Holdings, Inc. shareholder | $ | 825 | $ | (16,667 | ) | ||||||
| Income tax expense | 2,259 | 1,933 | |||||||||
| Interest expense, net | 24,619 | 25,687 | |||||||||
| Depreciation and amortization | 21,120 | 22,132 | |||||||||
| Gain on the contribution of a radiation facility to a joint venture | (12,629 | ) | - | ||||||||
| Fair value adjustment of earn-out liabilities | 1 | 460 | |||||||||
| Fair value adjustment of embedded derivatives and other financial instruments | (2,535 | ) | 1,693 | ||||||||
| Net income attributable to noncontrolling interests, net of cash distributions | 1,582 | 1,295 | |||||||||
| Other expenses (a) | 1,703 | 1,937 | |||||||||
| Non-cash expenses (b) | 840 | 1,011 | |||||||||
| Sale-lease back adjustments (c) | (289 | ) | (449 | ) | |||||||
| Acquisition-related costs (d) | 632 | 1,310 | |||||||||
| Litigation matters (e) | 866 | 1,941 | |||||||||
| Adjusted EBITDA (1) | $ | 38,994 | $ | 42,283 | |||||||
| Adjusted EBITDA as a percentage of total revenues | 14.4 | % | 15.3 | % | |||||||
| (1) Adjusted EBITDA, as defined in our Credit Agreement, dated as of April 30, 2015, is calculated as income (loss) before interest expense (net of interest income), income taxes, depreciation and amortization, net income attributable to noncontrolling interests, net of cash distributions, 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, fair value adjustment of embedded derivative, 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, costs associated with tradename and rebranding initiatives, expenses associated with idle/closed radiation therapy treatment facilities. | |||||||||||
| (a) Other expenses include management fees accrued to our sponsor, Vestar Capital Partners, 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. Expenses related to the costs associated with the Company's tradename and rebranding initiatives and expenses associated with idle/closed radiation therapy facilities, costs associated with the CMS Medicare freeze and costs associated with the restatement process. | |||||||||||
| (b) 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. | |||||||||||
| (c) 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. | |||||||||||
| (d) 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. | |||||||||||
| (e) Litigation matters relate to loss contingency reserves related to the Medicare investigative matters and costs associated with the termination of physicians. | |||||||||||
| We believe the Adjusted EBITDA provides useful information about our financial performance to investors, lenders, financial analysts and rating agencies as 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. Adjusted EBITDA eliminates the uneven effect of non-cash depreciation of tangibles assets and amortization of intangible assets, much of which results from acquisitions accounted for under the purchase method of accounting. 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. | |||||||||||
| 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, 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 | |||||||||||||
| March 31, | % | ||||||||||||
| Operating Metrics | 2016 | 2015 | Change | ||||||||||
| Number of operating days | 64 | 63 | 1.6 | % | |||||||||
| Domestic | |||||||||||||
| Radiation oncology treatment plans (total) (1) | 9,369 | 9,352 | 0.2 | % | |||||||||
| Radiation oncology treatments per day (total) | 3,276 | 3,378 | -3.0 | % | |||||||||
| Net patient service revenue per radiation oncology treatment (total) | $ | 752 | $ | 739 | 1.8 | % | |||||||
| Radiation oncology treatment plans (same market) (1,2) | 9,236 | 9,169 | 0.7 | % | |||||||||
| Radiation oncology treatments per day (same market) (2) | 3,258 | 3,308 | -1.5 | % | |||||||||
| Net patient service revenue per radiation oncology treatment (same market) (2) | $ | 747 | $ | 745 | 0.2 | % | |||||||
| International | |||||||||||||
| Total number of open cases | 4,974 | 4,501 | 10.5 | % | |||||||||
| Revenue per radiation oncology case | $ | 4,766 | $ | 6,003 | -20.6 | % | |||||||
| Three Months Ended | |||||||||||||
| March 31, | % | ||||||||||||
| Revenue Details | 2016 | 2015 | Change | ||||||||||
| Net patient service revenue per Consolidated Statements of Operations and Comprehensive Loss | $ | 250,784 | $ | 254,255 | |||||||||
| Less net patient service revenue ICC | (86,619 | ) | (89,469 | ) | |||||||||
| Less net patient service revenue professional services | (1,969 | ) | (1,944 | ) | |||||||||
| Plus net patient service revenue unconsolidated MSAs (3) | 19,255 | 21,504 | |||||||||||
| Less international net patient service revenue | (23,708 | ) | (27,020 | ) | |||||||||
| Domestic freestanding net patient service revenue | $ | 157,743 | $ | 157,326 | 0.3 | % | |||||||
| March 31, | |||||||||||||
| Center Details | 2016 | 2015 | |||||||||||
| Radiation therapy centers - freestanding (domestic) | 135 | 133 | |||||||||||
| Radiation therapy centers - freestanding (international) | 36 | 36 | |||||||||||
| Radiation therapy centers - professional / other | 12 | 11 | |||||||||||
| Total radiation therapy centers | 183 | 180 | |||||||||||
| (1) Total radiation oncology treatment plans represent the number of prescriptions issued by the physicians to start the treatment process. | |||||||||||||
| (2) Same market is defined as markets that have been open in excess of 12 months. | |||||||||||||
| This includes in-market acquisitions and conversion of existing professional only relationships to freestanding. | |||||||||||||
| (3) Medical services agreement | |||||||||||||
| 21ST CENTURY ONCOLOGY HOLDINGS, INC. | |||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
| (in thousands, except share amounts) | |||||||||
| June 30, | December 31, | ||||||||
| 2016 | 2015 | ||||||||
| (unaudited) | (a) | ||||||||
| ASSETS | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 52,206 | $ | 65,211 | |||||
| Restricted cash | 307 | 195 | |||||||
| Marketable securities | 1,080 | 1,078 | |||||||
| Accounts receivable, net | 128,715 | 122,355 | |||||||
| Prepaid expenses | 8,029 | 7,822 | |||||||
| Inventories | 3,418 | 3,918 | |||||||
| Income tax receivable | 5,285 | 4,966 | |||||||
| Other | 15,298 | 15,732 | |||||||
| Total current assets | 214,338 | 221,277 | |||||||
| Equity investments in joint ventures | 15,328 | 1,214 | |||||||
| Property and equipment, net | 230,748 | 238,585 | |||||||
| Real estate subject to finance obligation | 13,997 | 12,631 | |||||||
| Goodwill | 492,143 | 498,680 | |||||||
| Intangible assets, net | 61,937 | 70,115 | |||||||
| Embedded derivative & other financial instrument features of Series A convertible redeemable preferred stock | 33,284 | 17,883 | |||||||
| Other assets | 40,946 | 41,588 | |||||||
| Deferred income taxes | 2,119 | 1,888 | |||||||
| Total assets | $ | 1,104,840 | $ | 1,103,861 | |||||
| LIABILITIES AND DEFICIT | |||||||||
| Current liabilities: | |||||||||
| Accounts payable | $ | 67,398 | $ | 59,888 | |||||
| Accrued expenses | 68,488 | 111,653 | |||||||
| Income taxes payable | 2,680 | 2,501 | |||||||
| Current portion of long-term debt | 1,102,452 | 1,023,877 | |||||||
| Current portion of finance obligation | 269 | 283 | |||||||
| Other current liabilities | 11,430 | 14,265 | |||||||
| Total current liabilities | 1,252,717 | 1,212,467 | |||||||
| Long-term debt, less current portion | 24,899 | 49,233 | |||||||
| Finance obligation, less current portion | 14,903 | 13,318 | |||||||
| Embedded derivative & other financial instrument features of Series A convertible redeemable preferred stock | 22,212 | 19,911 | |||||||
| Other long-term liabilities | 70,971 | 70,928 | |||||||
| Deferred income taxes | 4,953 | 3,887 | |||||||
| Total liabilities | 1,390,655 | 1,369,744 | |||||||
| Series A convertible redeemable preferred stock, $0.001 par value, $1,000 stated value, 3,500,000 authorized, 385,000 issued and outstanding at June 30, 2016 and December 31, 2015 | 429,966 | 389,514 | |||||||
| Noncontrolling interests - redeemable | 19,825 | 19,233 | |||||||
| Commitments and Contingencies | |||||||||
| Equity: | |||||||||
| Common stock, $0.01 par value, 1,000,000 shares authorized 1,059 shares issued and outstanding at June 30, 2016 and December 31, 2015 | - | - | |||||||
| Additional paid-in capital | 539,093 | 579,920 | |||||||
| Retained deficit | (1,243,855 | ) | (1,226,298 | ) | |||||
| Accumulated other comprehensive loss, net of tax | (57,809 | ) | (54,574 | ) | |||||
| Total 21st Century Oncology Holdings, Inc. shareholder's deficit | (762,571 | ) | (700,952 | ) | |||||
| Noncontrolling interests - nonredeemable | 26,965 | 26,322 | |||||||
| Total deficit | (735,606 | ) | (674,630 | ) | |||||
| Total liabilities and deficit | $ | 1,104,840 | $ | 1,103,861 | |||||
| (a) Derived from audited financial statements | |||||||||
| 21ST CENTURY ONCOLOGY HOLDINGS, INC. | |||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | |||||||||||||||||
| (in thousands) | |||||||||||||||||
| (unaudited) | |||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||
| June 30, | June 30, | ||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||||
| Revenues: | |||||||||||||||||
| Net patient service revenue | $ | 238,685 | $ | 257,854 | $ | 489,469 | $ | 512,109 | |||||||||
| Management fees | 14,643 | 15,211 | 29,274 | 31,081 | |||||||||||||
| Other revenue | 5,055 | 5,148 | 9,938 | 10,656 | |||||||||||||
| Total revenues | 258,383 | 278,213 | 528,681 | 553,846 | |||||||||||||
| Expenses: | |||||||||||||||||
| Salaries and benefits | 137,653 | 147,397 | 277,751 | 294,356 | |||||||||||||
| Medical supplies | 24,494 | 24,774 | 52,004 | 51,065 | |||||||||||||
| Facility rent expenses | 17,522 | 17,017 | 34,864 | 33,838 | |||||||||||||
| Other operating expenses | 15,567 | 16,095 | 31,671 | 31,043 | |||||||||||||
| General and administrative expenses | 36,353 | 44,061 | 65,726 | 73,035 | |||||||||||||
| Depreciation and amortization | 20,973 | 22,204 | 42,093 | 44,336 | |||||||||||||
| Provision for doubtful accounts | 3,964 | 3,753 | 8,660 | 8,066 | |||||||||||||
| Interest expense, net | 25,583 | 24,378 | 50,202 | 50,065 | |||||||||||||
| Other gains and losses | (551 | ) | (1,283 | ) | (13,180 | ) | (1,667 | ) | |||||||||
| Impairment loss | 1,825 | - | 1,825 | - | |||||||||||||
| Early extinguishment of debt | - | 37,390 | - | 37,390 | |||||||||||||
| Fair value measurements | (10,255 | ) | 4,452 | (12,789 | ) | 6,605 | |||||||||||
| Loss (gain) on foreign currency transactions | 234 | (34 | ) | 305 | 204 | ||||||||||||
| Total expenses | 273,362 | 340,204 | 539,132 | 628,336 | |||||||||||||
| Loss before income taxes and equity interest in net income of joint ventures | (14,979 | ) | (61,991 | ) | (10,451 | ) | (74,490 | ) | |||||||||
| Income tax expense | 2,542 | 2,414 | 4,801 | 4,347 | |||||||||||||
| Net loss before equity interest in net income of joint ventures | (17,521 | ) | (64,405 | ) | (15,252 | ) | (78,837 | ) | |||||||||
| Equity interest in net income of joint ventures, net of tax | 455 | 188 | 807 | 212 | |||||||||||||
| Net loss | (17,066 | ) | (64,217 | ) | (14,445 | ) | (78,625 | ) | |||||||||
| Net income attributable to noncontrolling interests- redeemable and non-redeemable | (1,316 | ) | (1,821 | ) | (3,112 | ) | (4,080 | ) | |||||||||
| Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder | (18,382 | ) | (66,038 | ) | (17,557 | ) | (82,705 | ) | |||||||||
| Other comprehensive loss, net of tax: | |||||||||||||||||
| Unrealized loss on foreign currency translation | (823 | ) | (1,806 | ) | (3,996 | ) | (3,999 | ) | |||||||||
| Other comprehensive loss | (823 | ) | (1,806 | ) | (3,996 | ) | (3,999 | ) | |||||||||
| Comprehensive loss | (17,889 | ) | (66,023 | ) | (18,441 | ) | (82,624 | ) | |||||||||
| Comprehensive income attributable to noncontrolling interests- redeemable and non-redeemable | (804 | ) | (1,580 | ) | (2,351 | ) | (3,532 | ) | |||||||||
| Comprehensive loss attributable to 21st Century Oncology Holdings, Inc. shareholder | $ | (18,693 | ) | $ | (67,603 | ) | $ | (20,792 | ) | $ | (86,156 | ) | |||||
| 21ST CENTURY ONCOLOGY HOLDINGS, INC. | |||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||
| (in thousands) | |||||||||||||
| (unaudited) | |||||||||||||
| Six Months Ended | |||||||||||||
| June 30, | |||||||||||||
| 2016 | 2015 | ||||||||||||
| Cash flows from operating activities | |||||||||||||
| Net loss | $ | (14,445 | ) | $ | (78,625 | ) | |||||||
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||||||||||||
| Depreciation and amortization | 42,093 | 44,336 | |||||||||||
| Deferred rent expense | 144 | 379 | |||||||||||
| Deferred income taxes | 1,061 | (809 | ) | ||||||||||
| Stock-based compensation | - | 5 | |||||||||||
| Provision for doubtful accounts | 8,660 | 8,066 | |||||||||||
| Gain on the sale/disposal of property and equipment | (34 | ) | (303 | ) | |||||||||
| Gain on the contribution of a radiation facility to a joint venture | (12,629 | ) | - | ||||||||||
| Impairment loss | 1,825 | - | |||||||||||
| Early extinguishment of debt | - | 37,390 | |||||||||||
| Debt modification costs | 197 | - | |||||||||||
| Loss on foreign currency transactions | 227 | 38 | |||||||||||
| Fair value adjustment of earn-out liabilities | 1 | (530 | ) | ||||||||||
| Fair value adjustment of embedded derivatives and other financial instruments | (12,790 | ) | 7,135 | ||||||||||
| Amortization of debt discount | 947 | 746 | |||||||||||
| Amortization of loan costs | 2,095 | 2,630 | |||||||||||
| Paid in kind interest on notes payable | 795 | - | |||||||||||
| Equity interest in net income of joint ventures, net of tax | (807 | ) | (212 | ) | |||||||||
| Distribution received from unconsolidated joint ventures | - | 106 | |||||||||||
| Changes in operating assets and liabilities: | |||||||||||||
| Accounts receivable and other current assets | (25,282 | ) | (34,636 | ) | |||||||||
| Prepaid expenses and other assets | 1,228 | (1,003 | ) | ||||||||||
| Inventories | 468 | 124 | |||||||||||
| Accounts payable | 10,864 | 3,556 | |||||||||||
| Accrued deferred compensation | 799 | 686 | |||||||||||
| Income taxes payable | (1,030 | ) | 346 | ||||||||||
| Accrued expenses / other liabilities | (39,844 | ) | 23,533 | ||||||||||
| Net cash (used in) provided by operating activities | (35,457 | ) | 12,958 | ||||||||||
| Cash flows from investing activities | |||||||||||||
| Purchase of property and equipment | (20,195 | ) | (25,753 | ) | |||||||||
| Acquisition of medical practices | (129 | ) | (29,258 | ) | |||||||||
| Change in restricted cash associated with medical practice acquisitions | (112 | ) | 4,040 | ||||||||||
| Proceeds from the sale of equity interest in a joint venture | 6,170 | - | |||||||||||
| Purchase of joint venture interests | (502 | ) | - | ||||||||||
| Proceeds from the sale of property and equipment | 123 | 1,122 | |||||||||||
| (Loans to) repayments from employees | (191 | ) | 160 | ||||||||||
| Purchase of company owned life insurance policies | (656 | ) | (670 | ) | |||||||||
| Change in other assets and other liabilities | 113 | (156 | ) | ||||||||||
| Net cash used in investing activities | (15,379 | ) | (50,515 | ) | |||||||||
| Cash flows from financing activities | |||||||||||||
| Proceeds from issuance of debt | 60,789 | 970,618 | |||||||||||
| Principal repayments of debt | (19,264 | ) | (911,717 | ) | |||||||||
| Repayments of finance obligation | (108 | ) | (136 | ) | |||||||||
| Proceeds from issuance of noncontrolling interest | - | 743 | |||||||||||
| Proceeds from noncontrolling interest holders - redeemable and non-redeemable | - | 3,230 | |||||||||||
| Purchase of noncontrolling interest - non-redeemable | - | (1,233 | ) | ||||||||||
| Cash distributions to noncontrolling interest holders - redeemable and non-redeemable | (1,407 | ) | (2,022 | ) | |||||||||
| Payments for contingent considerations | (149 | ) | (8,537 | ) | |||||||||
| Payment of call premium on long-term debt | - | (24,877 | ) | ||||||||||
| Payment of debt modification costs | (197 | ) | - | ||||||||||
| Payments of loan costs | (1,811 | ) | (25,626 | ) | |||||||||
| Net cash provided by financing activities | 37,853 | 443 | |||||||||||
| Effect of exchange rate changes on cash and cash equivalents | (22 | ) | (10 | ) | |||||||||
| Net decrease in cash and cash equivalents | (13,005 | ) | (37,124 | ) | |||||||||
| Cash and cash equivalents, beginning of period | 65,211 | 99,082 | |||||||||||
| Cash and cash equivalents, end of period | $ | 52,206 | $ | 61,958 | |||||||||
| 21ST CENTURY ONCOLOGY HOLDINGS, INC. | |||||||||||||
| Supplemental Financial Information (Unaudited) | |||||||||||||
| Reconciliation of Total Revenue and Adjusted EBITDA to Net Loss Attributable | |||||||||||||
| to 21st Century Oncology Holdings, Inc. Shareholder | |||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||
| June 30, | June 30, | ||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||
| (in thousands): | |||||||||||||
| Total revenues | $ | 258,383 | $ | 278,213 | $ | 528,681 | $ | 553,846 | |||||
| Net income (loss) attributable to 21st Century | |||||||||||||
| Oncology Holdings, Inc. shareholder | $ | (18,382 | ) | $ | (66,038 | ) | $ | (17,557 | ) | $ | (82,705 | ) | |
| Income tax expense | 2,542 | 2,414 | 4,801 | 4,347 | |||||||||
| Interest expense, net | 25,583 | 24,378 | 50,202 | 50,065 | |||||||||
| Depreciation and amortization | 20,973 | 22,204 | 42,093 | 44,336 | |||||||||
| Gain on the contribution of a radiation facility to a joint venture | - | - | (12,629 | ) | - | ||||||||
| Gain on BP settlement | (517 | ) | - | (517 | ) | - | |||||||
| Impairment loss | 1,825 | - | 1,825 | - | |||||||||
| Early extinguishment of debt | - | 37,390 | - | 37,390 | |||||||||
| Fair value adjustment of earn-out liabilities | - | (990 | ) | 1 | (530 | ) | |||||||
| Fair value adjustment of embedded derivatives | |||||||||||||
| and other financial instruments | (10,255 | ) | 5,442 | (12,790 | ) | 7,135 | |||||||
| Net income attributable to noncontrolling interests, | |||||||||||||
| net of cash distributions | 123 | 763 | 1,705 | 2,058 | |||||||||
| Other expenses (a) | 2,232 | 2,008 | 3,735 | 3,945 | |||||||||
| Non-cash expenses (b) | 793 | 1,338 | 1,633 | 2,349 | |||||||||
| Sale-lease back adjustments (c) | (292 | ) | (315 | ) | (582 | ) | (764 | ) | |||||
| Acquisition-related costs (d) | 358 | 1,069 | 990 | 2,379 | |||||||||
| Litigation matters (e) | 386 | 16,578 | 1,252 | 18,519 | |||||||||
| Expenses associated with debt/waiver amendments and | |||||||||||||
| restatement of previously issued financial statements (f) | 7,981 | - | 8,181 | - | |||||||||
| Adjusted EBITDA (1) | $ | 33,350 | $ | 46,241 | $ | 72,343 | $ | 88,524 | |||||
| Adjusted EBITDA as a percentage of | |||||||||||||
| total revenues | 12.9 | % | 16.6 | % | 13.7 | % | 16.0 | % | |||||
| (1) Adjusted EBITDA, as defined in our Credit Agreement, dated as of April 30, 2015, is calculated as income (loss) before interest expense (net of interest income), income taxes, depreciation and amortization, net income attributable to noncontrolling interests, net of cash distributions, 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, fair value adjustment of embedded derivative, 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, costs associated with tradename and rebranding initiatives, expenses associated with idle/closed radiation therapy treatment facilities. | |||||||||||||
| (a) Other expenses include management fees accrued to our sponsor, Vestar Capital Partners, 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. Expenses related to the costs associated with the Company's tradename and rebranding initiatives and expenses associated with idle/closed radiation therapy facilities, costs associated with the CMS Medicare freeze and costs associated with the restatement process. | |||||||||||||
| (b) 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. | |||||||||||||
| (c) 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. | |||||||||||||
| (d) 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. | |||||||||||||
| (e) Litigation matters relate to loss contingency reserves related to the Medicare investigative matters and costs associated with the termination of physicians. | |||||||||||||
| (f) Expenses associated with debt/waiver amendments and accounting, legal and consulting fees associated with the restatement of previously issued financial statements. | |||||||||||||
| We believe the Adjusted EBITDA provides useful information about our financial performance to investors, lenders, financial analysts and rating agencies as 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. Adjusted EBITDA eliminates the uneven effect of non-cash depreciation of tangibles assets and amortization of intangible assets, much of which results from acquisitions accounted for under the purchase method of accounting. 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. | |||||||||||||
| 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, 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 | Six Months Ended | ||||||||||||||||||||||||
| June 30, | % | June 30, | % | ||||||||||||||||||||||
| Operating Metrics | 2016 | 2015 | Change | 2016 | 2015 | Change | |||||||||||||||||||
| Number of operating days | 64 | 64 | 0.0 | % | 128 | 127 | 0.8 | % | |||||||||||||||||
| Domestic | |||||||||||||||||||||||||
| Radiation oncology treatment plans (total) (1) | 8,854 | 9,297 | -4.8 | % | 18,223 | 18,649 | -2.3 | % | |||||||||||||||||
| Radiation oncology treatments per day (total) | 3,140 | 3,296 | -4.7 | % | 3,208 | 3,337 | -3.9 | % | |||||||||||||||||
| Net patient service revenue per radiation oncology | $ | 731 | $ | 758 | -3.5 | % | $ | 742 | $ | 749 | -0.9 | % | |||||||||||||
| treatment (total) | |||||||||||||||||||||||||
| Radiation oncology treatment plans (same market) (1,2) | 8,829 | 9,122 | -3.2 | % | 18,065 | 18,291 | -1.2 | % | |||||||||||||||||
| Radiation oncology treatments per day (same market) (2) | 3,140 | 3,242 | -3.1 | % | 3,199 | 3,275 | -2.3 | % | |||||||||||||||||
| Net patient service revenue per radiation oncology | |||||||||||||||||||||||||
| treatment (same market) (2) | $ | 729 | $ | 757 | -3.6 | % | $ | 738 | $ | 747 | -1.1 | % | |||||||||||||
| International | |||||||||||||||||||||||||
| Total number of open cases | 4,987 | 4,626 | 7.8 | % | 9,961 | 9,127 | 9.1 | % | |||||||||||||||||
| Revenue per radiation oncology case | $ | 5,521 | $ | 6,248 | -11.6 | % | $ | 5,144 | $ | 6,127 | -16.0 | % | |||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
| June 30, | % | June 30, | % | ||||||||||||||||||||||
| Revenue Details | 2016 | 2015 | Change | 2016 | 2015 | Change | |||||||||||||||||||
| Net patient service revenue per Consolidated Statements | |||||||||||||||||||||||||
| of Operations and Comprehensive Loss | $ | 238,685 | $ | 257,854 | $ | 489,469 | $ | 512,109 | |||||||||||||||||
| Less net patient service revenue ICC | (81,842 | ) | (86,893 | ) | (168,461 | ) | (176,362 | ) | |||||||||||||||||
| Less net patient service revenue professional services | (1,863 | ) | (2,416 | ) | (3,832 | ) | (4,360 | ) | |||||||||||||||||
| Plus net patient service revenue unconsolidated MSAs (3) | 19,551 | 20,294 | 38,806 | 41,798 | |||||||||||||||||||||
| Less international net patient service revenue | (27,534 | ) | (28,905 | ) | (51,242 | ) | (55,925 | ) | |||||||||||||||||
| Domestic freestanding net patient service revenue | $ | 146,997 | $ | 159,934 | -8.1 | % | $ | 304,741 | $ | 317,259 | -3.9 | % | |||||||||||||
| June 30, | |||||||||||||||||||||||||
| Center Details | 2016 | 2015 | |||||||||||||||||||||||
| Radiation therapy centers - freestanding (domestic) | 135 | 136 | |||||||||||||||||||||||
| Radiation therapy centers - freestanding (international) | 36 | 35 | |||||||||||||||||||||||
| Radiation therapy centers - professional / other | 12 | 12 | |||||||||||||||||||||||
| Total radiation therapy centers | 183 | 183 | |||||||||||||||||||||||
| (1) Total radiation oncology treatment plans represent the number of prescriptions issued by the physicians to start the treatment process. | |||||||||||||||||||||||||
| (2) Same market is defined as markets that have been open in excess of 12 months. | |||||||||||||||||||||||||
| This includes in-market acquisitions and conversion of existing professional only relationships to freestanding. | |||||||||||||||||||||||||
| (3) Medical services agreement | |||||||||||||||||||||||||
Additional Supplemental Financial Information
| 21ST CENTURY ONCOLOGY HOLDINGS, INC. | |||||||||
| Supplemental Financial Information (Unaudited) | |||||||||
| Reconciliation of Restated Total Pro-forma Revenue and Pro-forma Adjusted EBITDA to Prior Reported | |||||||||
| Three Months Ended | Three Months Ended | ||||||||
| September 30, | September 30, | ||||||||
| 2015 | 2015 | ||||||||
| Prior Reported | Adjustments | Restated | |||||||
| (in thousands): | |||||||||
| Total revenues | $ | 257,985 | $ | 4,272 | $ | 262,257 | |||
| Pro-forma full period effect of acquisitions | 169 | - | 169 | ||||||
| Total pro-forma revenues | $ | 258,154 | $ | 4,272 | $ | 262,426 | |||
| Net income (loss) attributable to 21st Century | |||||||||
| Oncology Holdings, Inc. shareholder | $ | (56,904 | ) | $ | (872 | ) | $ | (57,776 | ) |
| Income tax expense | 1,152 | 1,699 | 2,851 | ||||||
| Interest expense, net | 23,724 | 47 | 23,771 | ||||||
| Depreciation and amortization | 22,479 | (40 | ) | 22,439 | |||||
| Gain on BP settlement | (5,796 | ) | - | (5,796 | ) | ||||
| Fair value adjustment of earn-out liabilities | (3,723 | ) | 3,735 | 12 | |||||
| Fair value adjustment of embedded derivatives | |||||||||
| and other financial instruments | 2,363 | (576 | ) | 1,787 | |||||
| Net income attributable to noncontrolling interests, | |||||||||
| net of cash distributions | 408 | 72 | 480 | ||||||
| Other expenses (b) | 2,200 | - | 2,200 | ||||||
| Non-cash expenses (c) | 782 | 162 | 944 | ||||||
| Sale-lease back adjustments (d) | 4 | - | 4 | ||||||
| Acquisition-related costs (e) | 1,128 | - | 1,128 | ||||||
| Litigation matters (f) | 39,256 | - | 39,256 | ||||||
| Pro-Forma full period effect of acquisition EBITDA (a) | 117 | - | 117 | ||||||
| Pro-Forma Adjusted EBITDA (1) | $ | 27,190 | $ | 4,227 | $ | 31,417 | |||
| Pro-Forma Adjusted EBITDA as a percentage of | |||||||||
| total pro-forma revenues | 10.5 | % | 1.4 | % | 12.0 | % | |||
| (1) Pro-Forma Adjusted EBITDA, as defined in our Credit Agreement, dated as of April 30, 2015, is calculated as income (loss) before interest expense (net of interest income), income taxes, depreciation and amortization, net income attributable to noncontrolling interests, net of cash distributions, 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, fair value adjustment of embedded derivative, 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, costs associated with tradename and rebranding initiatives, expenses associated with idle/closed radiation therapy treatment facilities. | |||||||||
| (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 2015. 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) Other expenses include management fees accrued to our sponsor, Vestar Capital Partners, 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. Expenses related to the costs associated with the Company's tradename and rebranding initiatives and expenses associated with idle/closed radiation therapy facilities, costs associated with the CMS Medicare freeze and costs associated with the restatement process. | |||||||||
| (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) Litigation matters relate to loss contingency reserves related to the Medicare investigative matters and costs associated with the termination of physicians. | |||||||||
| We believe the Pro-Forma Adjusted EBITDA provides useful information about our financial performance to investors, lenders, financial analysts and rating agencies as 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 tangibles 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. | |||||||||
| Supplemental Financial Information (Unaudited) | |||||||||
| Reconciliation of Restated Total Revenue and Adjusted EBITDA to Prior Reported | |||||||||
| Three Months Ended | Three Months Ended | ||||||||
| June 30, | June 30, | ||||||||
| 2015 | 2015 | ||||||||
| Prior Reported | Adjustments | Restated | |||||||
| (in thousands): | |||||||||
| Total revenues | $ | 285,209 | $ | (6,996 | ) | $ | 278,213 | ||
| Net income (loss) attributable to 21st Century | |||||||||
| Oncology Holdings, Inc. shareholder | $ | (64,538 | ) | $ | (1,500 | ) | $ | (66,038 | ) |
| Income tax expense | 3,088 | (674 | ) | 2,414 | |||||
| Interest expense, net | 24,326 | 52 | 24,378 | ||||||
| Depreciation and amortization | 22,242 | (38 | ) | 22,204 | |||||
| Early extinguishment of debt | 37,390 | - | 37,390 | ||||||
| Fair value adjustment of earn-out liabilities | 2,745 | (3,735 | ) | (990 | ) | ||||
| Fair value adjustment of embedded derivatives | |||||||||
| and other financial instruments | 5,217 | 225 | 5,442 | ||||||
| Net income attributable to noncontrolling interests, | |||||||||
| net of cash distributions | 1,018 | (255 | ) | 763 | |||||
| Other expenses (a) | 1,034 | 974 | 2,008 | ||||||
| Non-cash expenses (b) | 1,243 | 95 | 1,338 | ||||||
| Sale-lease back adjustments (c) | (315 | ) | - | (315 | ) | ||||
| Acquisition-related costs (d) | 1,070 | (1 | ) | 1,069 | |||||
| Litigation matters (e) | 16,579 | (1 | ) | 16,578 | |||||
| Adjusted EBITDA (1) | $ | 51,099 | $ | (4,858 | ) | $ | 46,241 | ||
| Adjusted EBITDA as a percentage of | |||||||||
| total revenues | 17.9 | % | -1.3 | % | 16.6 | % | |||
| (1) Adjusted EBITDA, as defined in our Credit Agreement, dated as of April 30, 2015, is calculated as income (loss) before interest expense (net of interest income), income taxes, depreciation and amortization, net income attributable to noncontrolling interests, net of cash distributions, 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, fair value adjustment of embedded derivative, 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, costs associated with tradename and rebranding initiatives, expenses associated with idle/closed radiation therapy treatment facilities. | |||||||||
| (a) Other expenses include management fees accrued to our sponsor, Vestar Capital Partners, 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. Expenses related to the costs associated with the Company's tradename and rebranding initiatives and expenses associated with idle/closed radiation therapy facilities, costs associated with the CMS Medicare freeze and costs associated with the restatement process. | |||||||||
| (b) 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. | |||||||||
| (c) 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. | |||||||||
| (d) 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. | |||||||||
| (e) Litigation matters relate to loss contingency reserves related to the Medicare investigative matters and costs associated with the termination of physicians. | |||||||||
| We believe the Adjusted EBITDA provides useful information about our financial performance to investors, lenders, financial analysts and rating agencies as 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. Adjusted EBITDA eliminates the uneven effect of non-cash depreciation of tangibles assets and amortization of intangible assets, much of which results from acquisitions accounted for under the purchase method of accounting. 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. | |||||||||
| 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, Adjusted EBITDA as presented may not be comparable to similarly titled measures of other companies. | |||||||||
| 21ST CENTURY ONCOLOGY HOLDINGS, INC. | |||||||||
| Supplemental Financial Information (Unaudited) | |||||||||
| Reconciliation of Restated Total Revenue and Adjusted EBITDA to Prior Reported | |||||||||
| Three Months Ended | Three Months Ended | ||||||||
| March 31, | March 31, | ||||||||
| 2015 | 2015 | ||||||||
| Prior Reported | Adjustments | Restated | |||||||
| (in thousands): | |||||||||
| Total revenues | $ | 278,483 | $ | (2,850 | ) | $ | 275,633 | ||
| Net income (loss) attributable to 21st Century | |||||||||
| Oncology Holdings, Inc. shareholder | $ | (15,242 | ) | $ | (1,425 | ) | $ | (16,667 | ) |
| Income tax expense | 2,690 | (757 | ) | 1,933 | |||||
| Interest expense, net | 25,687 | - | 25,687 | ||||||
| Depreciation and amortization | 22,569 | (437 | ) | 22,132 | |||||
| Fair value adjustment of earn-out liabilities | 460 | - | 460 | ||||||
| Fair value adjustment of embedded derivatives | |||||||||
| and other financial instruments | 1,342 | 351 | 1,693 | ||||||
| Net income attributable to noncontrolling interests, | |||||||||
| net of cash distributions | 1,344 | (49 | ) | 1,295 | |||||
| Other expenses (a) | 967 | 970 | 1,937 | ||||||
| Non-cash expenses (b) | 1,065 | (54 | ) | 1,011 | |||||
| Sale-lease back adjustments (c) | (449 | ) | - | (449 | ) | ||||
| Acquisition-related costs (d) | 1,310 | - | 1,310 | ||||||
| Litigation matters (e) | 1,941 | - | 1,941 | ||||||
| Adjusted EBITDA (1) | $ | 43,684 | $ | (1,401 | ) | $ | 42,283 | ||
| Adjusted EBITDA as a percentage of | |||||||||
| total revenues | 15.7 | % | -0.3 | % | 15.3 | % | |||
| (1) Adjusted EBITDA, as defined in our Credit Agreement, dated as of April 30, 2015, is calculated as income (loss) before interest expense (net of interest income), income taxes, depreciation and amortization, net income attributable to noncontrolling interests, net of cash distributions, 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, fair value adjustment of embedded derivative, 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, costs associated with tradename and rebranding initiatives, expenses associated with idle/closed radiation therapy treatment facilities. | |||||||||
| (a) Other expenses include management fees accrued to our sponsor, Vestar Capital Partners, 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. Expenses related to the costs associated with the Company's tradename and rebranding initiatives and expenses associated with idle/closed radiation therapy facilities, costs associated with the CMS Medicare freeze and costs associated with the restatement process. | |||||||||
| (b) 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. | |||||||||
| (c) 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. | |||||||||
| (d) 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. | |||||||||
| (e) Litigation matters relate to loss contingency reserves related to the Medicare investigative matters and costs associated with the termination of physicians. | |||||||||
| We believe the Adjusted EBITDA provides useful information about our financial performance to investors, lenders, financial analysts and rating agencies as 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. Adjusted EBITDA eliminates the uneven effect of non-cash depreciation of tangibles assets and amortization of intangible assets, much of which results from acquisitions accounted for under the purchase method of accounting. 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. | |||||||||
| 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, Adjusted EBITDA as presented may not be comparable to similarly titled measures of other companies. | |||||||||
| 21ST CENTURY ONCOLOGY HOLDINGS, INC. | |||||||||
| Supplemental Financial Information (Unaudited) | |||||||||
| Reconciliation of Restated Total Revenue and Adjusted EBITDA to Prior Reported | |||||||||
| Three Months Ended | Three Months Ended | ||||||||
| December 31, | December 31, | ||||||||
| 2014 | 2014 | ||||||||
| Prior Reported | Adjustments | Restated | |||||||
| (in thousands): | |||||||||
| Total revenues | $ | 269,261 | $ | (2,674 | ) | $ | 266,587 | ||
| Net income (loss) attributable to 21st Century | |||||||||
| Oncology Holdings, Inc. shareholder | $ | (24,168 | ) | $ | (4,173 | ) | $ | (28,341 | ) |
| Income tax expense | 946 | (868 | ) | 78 | |||||
| Interest expense, net | 25,620 | - | 25,620 | ||||||
| Depreciation and amortization | 21,429 | (32 | ) | 21,397 | |||||
| Fair value adjustment of earn-out liabilities | 1,015 | - | 1,015 | ||||||
| Fair value adjustment of embedded derivatives | |||||||||
| and other financial instruments | 837 | - | 837 | ||||||
| Net income attributable to noncontrolling interests, | |||||||||
| net of cash distributions | (109 | ) | (1,364 | ) | (1,473 | ) | |||
| Other expenses (a) | 4,035 | 1 | 4,036 | ||||||
| Non-cash expenses (b) | 1,085 | 63 | 1,148 | ||||||
| Sale-lease back adjustments (c) | (441 | ) | - | (441 | ) | ||||
| Acquisition-related costs (d) | 2,261 | - | 2,261 | ||||||
| Litigation matters (e) | 2,108 | - | 2,108 | ||||||
| Expenses associated with note-holder negotiations and | |||||||||
| management of liquidity (f) | 2,482 | - | 2,482 | ||||||
| Adjusted EBITDA (1) | $ | 37,100 | $ | (6,373 | ) | $ | 30,727 | ||
| Adjusted EBITDA as a percentage of | |||||||||
| total revenues | 13.8 | % | -2.3 | % | 11.5 | % | |||
| (1) Adjusted EBITDA, as defined in our Credit Agreement, dated as of April 30, 2015, is calculated as income (loss) before interest expense (net of interest income), income taxes, depreciation and amortization, net income attributable to noncontrolling interests, net of cash distributions, 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, fair value adjustment of embedded derivative, 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, costs associated with tradename and rebranding initiatives, expenses associated with idle/closed radiation therapy treatment facilities. | |||||||||
| (a) Other expenses include management fees accrued to our sponsor, Vestar Capital Partners, 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. Expenses related to the costs associated with the Company's tradename and rebranding initiatives and expenses associated with idle/closed radiation therapy facilities, costs associated with the CMS Medicare freeze and costs associated with the restatement process. | |||||||||
| (b) 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. | |||||||||
| (c) 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. | |||||||||
| (d) 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. | |||||||||
| (e) Litigation matters relate to loss contingency reserves related to the Medicare investigative matters and costs associated with the termination of physicians. | |||||||||
| (f) Expenses associated with negotiating with note-holders, recapitalization support agreement and legal and consulting fees associated with management of liquidity. | |||||||||
| We believe the Adjusted EBITDA provides useful information about our financial performance to investors, lenders, financial analysts and rating agencies as 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. Adjusted EBITDA eliminates the uneven effect of non-cash depreciation of tangibles assets and amortization of intangible assets, much of which results from acquisitions accounted for under the purchase method of accounting. 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. | |||||||||
| 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, Adjusted EBITDA as presented may not be comparable to similarly titled measures of other companies. | |||||||||
| 21ST CENTURY ONCOLOGY HOLDINGS, INC. | |||||||||
| Supplemental Financial Information (Unaudited) | |||||||||
| Reconciliation of Restated Total Revenue and Adjusted EBITDA to Prior Reported | |||||||||
| Three Months Ended | Three Months Ended | ||||||||
| September 30, | September 30, | ||||||||
| 2014 | 2014 | ||||||||
| Prior Reported | Adjustments | Restated | |||||||
| (in thousands): | |||||||||
| Total revenues | $ | 257,618 | $ | (1,599 | ) | $ | 256,019 | ||
| Net income (loss) attributable to 21st Century | |||||||||
| Oncology Holdings, Inc. shareholder | $ | (87,377 | ) | $ | (506 | ) | $ | (87,883 | ) |
| Income tax expense | 1,173 | (645 | ) | 528 | |||||
| Interest expense, net | 30,233 | - | 30,233 | ||||||
| Depreciation and amortization | 22,388 | (30 | ) | 22,358 | |||||
| Impairment loss | 47,526 | - | 47,526 | ||||||
| Early extinguishment of debt | 8,558 | - | 8,558 | ||||||
| Equity initial public offering expenses | 742 | (742 | ) | - | |||||
| Fair value adjustment of earn-out liabilities | 209 | - | 209 | ||||||
| Net income attributable to noncontrolling interests, | |||||||||
| net of cash distributions | (365 | ) | (21 | ) | (386 | ) | |||
| Other expenses (a) | 4,090 | - | 4,090 | ||||||
| Non-cash expenses (b) | 1,120 | - | 1,120 | ||||||
| Sale-lease back adjustments (c) | (331 | ) | - | (331 | ) | ||||
| Acquisition-related costs (d) | 1,371 | (120 | ) | 1,251 | |||||
| Litigation matters (e) | 1,097 | - | 1,097 | ||||||
| Expenses associated with note-holder negotiations and | |||||||||
| management of liquidity (f) | 9,258 | 121 | 9,379 | ||||||
| Adjusted EBITDA (1) | $ | 39,692 | $ | (1,943 | ) | $ | 37,749 | ||
| Adjusted EBITDA as a percentage of | |||||||||
| total revenues | 15.4 | % | -0.7 | % | 14.7 | % | |||
| (1) Adjusted EBITDA, as defined in our Credit Agreement, dated as of April 30, 2015, is calculated as income (loss) before interest expense (net of interest income), income taxes, depreciation and amortization, net income attributable to noncontrolling interests, net of cash distributions, 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, fair value adjustment of embedded derivative, 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, costs associated with tradename and rebranding initiatives, expenses associated with idle/closed radiation therapy treatment facilities. | |||||||||
| (a) Other expenses include management fees accrued to our sponsor, Vestar Capital Partners, 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. Expenses related to the costs associated with the Company's tradename and rebranding initiatives and expenses associated with idle/closed radiation therapy facilities, costs associated with the CMS Medicare freeze and costs associated with the restatement process. | |||||||||
| (b) 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. | |||||||||
| (c) 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. | |||||||||
| (d) 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. | |||||||||
| (e) Litigation matters relate to loss contingency reserves related to the Medicare investigative matters and costs associated with the termination of physicians. | |||||||||
| (f) Expenses associated with negotiating with note-holders, recapitalization support agreement and legal and consulting fees associated with management of liquidity. | |||||||||
| We believe the Adjusted EBITDA provides useful information about our financial performance to investors, lenders, financial analysts and rating agencies as 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. Adjusted EBITDA eliminates the uneven effect of non-cash depreciation of tangibles assets and amortization of intangible assets, much of which results from acquisitions accounted for under the purchase method of accounting. 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. | |||||||||
| 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, Adjusted EBITDA as presented may not be comparable to similarly titled measures of other companies. | |||||||||
| 21ST CENTURY ONCOLOGY HOLDINGS, INC. | |||||||||
| Supplemental Financial Information (Unaudited) | |||||||||
| Reconciliation of Restated Total Revenue and Adjusted EBITDA to Prior Reported | |||||||||
| Three Months Ended | Three Months Ended | ||||||||
| June 30, | June 30, | ||||||||
| 2014 | 2014 | ||||||||
| Prior Reported | Adjustments | Restated | |||||||
| (in thousands): | |||||||||
| Total revenues | $ | 265,898 | $ | (2,660 | ) | $ | 263,238 | ||
| Net income (loss) attributable to 21st Century | |||||||||
| Oncology Holdings, Inc. shareholder | $ | (207,524 | ) | $ | (2,714 | ) | $ | (210,238 | ) |
| Income tax expense | 934 | (839 | ) | 95 | |||||
| Interest expense, net | 29,899 | - | 29,899 | ||||||
| Depreciation and amortization | 22,162 | (28 | ) | 22,134 | |||||
| Impairment loss | 182,000 | - | 182,000 | ||||||
| Equity initial public offering expenses | 4,163 | 742 | 4,905 | ||||||
| Fair value adjustment of earn-out liabilities | 204 | - | 204 | ||||||
| Net income attributable to noncontrolling interests, | |||||||||
| net of cash distributions | 2,014 | (45 | ) | 1,969 | |||||
| Other expenses (a) | 3,659 | (1 | ) | 3,658 | |||||
| Non-cash expenses (b) | 1,248 | (1 | ) | 1,247 | |||||
| Sale-lease back adjustments (c) | (329 | ) | 1 | (328 | ) | ||||
| Acquisition-related costs (d) | 4,213 | - | 4,213 | ||||||
| Litigation matters (e) | 2,568 | - | 2,568 | ||||||
| Adjusted EBITDA | $ | 45,211 | $ | (2,885 | ) | $ | 42,326 | ||
| Adjusted EBITDA as a percentage of | |||||||||
| total revenues | 17.0 | % | -0.9 | % | 16.1 | % | |||
| (1) Adjusted EBITDA, as defined in our Credit Agreement, dated as of April 30, 2015, is calculated as income (loss) before interest expense (net of interest income), income taxes, depreciation and amortization, net income attributable to noncontrolling interests, net of cash distributions, 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, fair value adjustment of embedded derivative, 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, costs associated with tradename and rebranding initiatives, expenses associated with idle/closed radiation therapy treatment facilities. | |||||||||
| (a) Other expenses include management fees accrued to our sponsor, Vestar Capital Partners, 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. Expenses related to the costs associated with the Company's tradename and rebranding initiatives and expenses associated with idle/closed radiation therapy facilities, costs associated with the CMS Medicare freeze and costs associated with the restatement process. | |||||||||
| (b) 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. | |||||||||
| (c) 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. | |||||||||
| (d) 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. | |||||||||
| (e) Litigation matters relate to loss contingency reserves related to the Medicare investigative matters and costs associated with the termination of physicians. | |||||||||
| We believe the Adjusted EBITDA provides useful information about our financial performance to investors, lenders, financial analysts and rating agencies as 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. Adjusted EBITDA eliminates the uneven effect of non-cash depreciation of tangibles assets and amortization of intangible assets, much of which results from acquisitions accounted for under the purchase method of accounting. 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. | |||||||||
| 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, Adjusted EBITDA as presented may not be comparable to similarly titled measures of other companies. | |||||||||
| 21ST CENTURY ONCOLOGY HOLDINGS, INC. | |||||||||
| Supplemental Financial Information (Unaudited) | |||||||||
| Reconciliation of Restated Total Pro-forma Revenue and Pro-forma Adjusted EBITDA to Prior Reported | |||||||||
| Three Months Ended | Three Months Ended | ||||||||
| March 31, | March 31, | ||||||||
| 2014 | 2014 | ||||||||
| Prior Reported | Adjustments | Restated | |||||||
| (in thousands): | |||||||||
| Total revenues | $ | 233,397 | $ | (1,059 | ) | $ | 232,338 | ||
| Pro-forma full period effect of acquisitions | 8,819 | - | 8,819 | ||||||
| Total pro-forma revenues | $ | 242,216 | $ | (1,059 | ) | $ | 241,157 | ||
| Net income (loss) attributable to 21st Century | |||||||||
| Oncology Holdings, Inc. shareholder | $ | (30,181 | ) | $ | (648 | ) | $ | (30,829 | ) |
| Income tax expense | 2,106 | (488 | ) | 1,618 | |||||
| Interest expense, net | 27,527 | - | 27,527 | ||||||
| Depreciation and amortization | 20,722 | (28 | ) | 20,694 | |||||
| Loss on sale leaseback transaction | 135 | - | 135 | ||||||
| Fair value adjustment of earn-out liabilities | 199 | - | 199 | ||||||
| Gain on foreign currency derivative contracts | (4 | ) | - | (4 | ) | ||||
| Net income attributable to noncontrolling interests, | |||||||||
| net of cash distributions | 891 | (5 | ) | 886 | |||||
| Other expenses (b) | 3,541 | (1 | ) | 3,540 | |||||
| Non-cash expenses (c) | 723 | - | 723 | ||||||
| Sale-lease back adjustments (d) | (303 | ) | - | (303 | ) | ||||
| Acquisition-related costs (e) | 4,491 | - | 4,491 | ||||||
| Litigation matters (f) | 757 | - | 757 | ||||||
| Pro-Forma full period effect of acquisition EBITDA (a) | 742 | - | 742 | ||||||
| Pro-Forma Adjusted EBITDA (1) | $ | 31,346 | $ | (1,170 | ) | $ | 30,176 | ||
| Pro-Forma Adjusted EBITDA as a percentage of | |||||||||
| total pro-forma revenues | 12.9 | % | -0.4 | % | 12.5 | % | |||
| (1) Pro-Forma Adjusted EBITDA, as defined in our Credit Agreement, dated as of April 30, 2015, is calculated as income (loss) before interest expense (net of interest income), income taxes, depreciation and amortization, net income attributable to noncontrolling interests, net of cash distributions, 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, fair value adjustment of embedded derivative, 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, costs associated with tradename and rebranding initiatives, expenses associated with idle/closed radiation therapy treatment facilities. | |||||||||
| (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. 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) Other expenses include management fees accrued to our sponsor, Vestar Capital Partners, 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. Expenses related to the costs associated with the Company's tradename and rebranding initiatives and expenses associated with idle/closed radiation therapy facilities, costs associated with the CMS Medicare freeze and costs associated with the restatement process. | |||||||||
| (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) Litigation matters relate to loss contingency reserves related to the Medicare investigative matters and costs associated with the termination of physicians. | |||||||||
| We believe the Pro-Forma Adjusted EBITDA provides useful information about our financial performance to investors, lenders, financial analysts and rating agencies as 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 tangibles 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. | |||||||||
Additional Supplemental Key Operating Statistics
| 21ST CENTURY ONCOLOGY HOLDINGS, INC. | ||||||||||||||
| KEY OPERATING STATISTICS | ||||||||||||||
| (unaudited) | ||||||||||||||
| Three Months Ended | ||||||||||||||
| September 30, | % | |||||||||||||
| Operating Metrics | 2015 | 2014 | Change | |||||||||||
| Number of operating days | 64 | 64 | 0.0 | % | ||||||||||
| Domestic | ||||||||||||||
| Radiation oncology treatment plans (total) (1) | 8,832 | 8,479 | 4.2 | % | ||||||||||
| Radiation oncology treatments per day (total) | 3,124 | 3,135 | -0.3 | % | ||||||||||
| Net patient service revenue per radiation oncology | $ | 754 | $ | 768 | -1.8 | % | ||||||||
| treatment (total) | ||||||||||||||
| Radiation oncology treatment plans (same market) (1,2) | 8,442 | 8,479 | -0.4 | % | ||||||||||
| Radiation oncology treatments per day (same market) (2) | 2,983 | 3,126 | -4.6 | % | ||||||||||
| Net patient service revenue per radiation oncology | ||||||||||||||
| treatment (same market) (2) | $ | 757 | $ | 760 | -0.3 | % | ||||||||
| International | ||||||||||||||
| Total number of open cases | 4,907 | 4,480 | 9.5 | % | ||||||||||
| Revenue per radiation oncology case | $ | 6,421 | $ | 5,306 | 21.0 | % | ||||||||
| Three Months Ended | ||||||||||||||
| September 30, | % | |||||||||||||
| Revenue Details | 2015 | 2014 | Change | |||||||||||
| Net patient service revenue per Consolidated Statements | ||||||||||||||
| of Operations and Comprehensive Loss | $ | 243,768 | $ | 236,581 | ||||||||||
| Less net patient service revenue ICC | (79,292 | ) | (79,278 | ) | ||||||||||
| Less net patient service revenue professional services | (1,820 | ) | (1,950 | ) | ||||||||||
| Plus net patient service revenue unconsolidated MSAs (3) | 19,653 | 22,551 | ||||||||||||
| Less international net patient service revenue | (31,508 | ) | (23,770 | ) | ||||||||||
| Domestic freestanding net patient service revenue | $ | 150,801 | $ | 154,134 | -2.2 | % | ||||||||
| September 30, | ||||||||||||||
| Center Details | 2015 | 2014 | ||||||||||||
| Radiation therapy centers - freestanding (domestic) | 134 | 132 | ||||||||||||
| Radiation therapy centers - freestanding (international) | 36 | 35 | ||||||||||||
| Radiation therapy centers - professional / other | 12 | 11 | ||||||||||||
| Total radiation therapy centers | 182 | 178 | ||||||||||||
| (1) Total radiation oncology treatment plans represent the number of prescriptions issued by the physicians to start the treatment process. | ||||||||||||||
| (2) Same market is defined as markets that have been open in excess of 12 months. | ||||||||||||||
| This includes in-market acquisitions and conversion of existing professional only relationships to freestanding. | ||||||||||||||
| (3) Medical services agreement | ||||||||||||||
| 21ST CENTURY ONCOLOGY HOLDINGS, INC. | ||||||||||||||
| KEY OPERATING STATISTICS | ||||||||||||||
| (unaudited) | ||||||||||||||
| Three Months Ended | ||||||||||||||
| June 30, | % | |||||||||||||
| Operating Metrics | 2015 | 2014 | Change | |||||||||||
| Number of operating days | 64 | 64 | 0.0 | % | ||||||||||
| Domestic | ||||||||||||||
| Radiation oncology treatment plans (total) (1) | 9,297 | 8,742 | 6.3 | % | ||||||||||
| Radiation oncology treatments per day (total) | 3,296 | 3,175 | 3.8 | % | ||||||||||
| Net patient service revenue per radiation oncology | $ | 758 | $ | 780 | -2.8 | % | ||||||||
| treatment (total) | ||||||||||||||
| Radiation oncology treatment plans (same market) (1,2) | 8,913 | 8,734 | 2.0 | % | ||||||||||
| Radiation oncology treatments per day (same market) (2) | 3,153 | 3,168 | -0.5 | % | ||||||||||
| Net patient service revenue per radiation oncology | ||||||||||||||
| treatment (same market) (2) | $ | 768 | $ | 769 | -0.2 | % | ||||||||
| International | ||||||||||||||
| Total number of open cases | 4,626 | 4,600 | 0.6 | % | ||||||||||
| Revenue per radiation oncology case | $ | 6,248 | $ | 4,707 | 32.7 | % | ||||||||
| Three Months Ended | ||||||||||||||
| June 30, | % | |||||||||||||
| Revenue Details | 2015 | 2014 | Change | |||||||||||
| Net patient service revenue per Consolidated Statements | ||||||||||||||
| of Operations and Comprehensive Loss | $ | 257,854 | $ | 243,149 | ||||||||||
| Less net patient service revenue ICC | (86,893 | ) | (83,022 | ) | ||||||||||
| Less net patient service revenue professional services | (2,416 | ) | (2,193 | ) | ||||||||||
| Plus net patient service revenue unconsolidated MSAs (3) | 20,294 | 22,145 | ||||||||||||
| Less international net patient service revenue | (28,905 | ) | (21,653 | ) | ||||||||||
| Domestic freestanding net patient service revenue | $ | 159,934 | $ | 158,426 | 1.0 | % | ||||||||
| June 30, | ||||||||||||||
| Center Details | 2015 | 2014 | ||||||||||||
| Radiation therapy centers - freestanding (domestic) | 136 | 133 | ||||||||||||
| Radiation therapy centers - freestanding (international) | 35 | 35 | ||||||||||||
| Radiation therapy centers - professional / other | 12 | 12 | ||||||||||||
| Total radiation therapy centers | 183 | 180 | ||||||||||||
| (1) Total radiation oncology treatment plans represent the number of prescriptions issued by the physicians to start the treatment process. | ||||||||||||||
| (2) Same market is defined as markets that have been open in excess of 12 months. | ||||||||||||||
| This includes in-market acquisitions and conversion of existing professional only relationships to freestanding. | ||||||||||||||
| (3) Medical services agreement | ||||||||||||||
| 21ST CENTURY ONCOLOGY HOLDINGS, INC. | ||||||||||||||
| KEY OPERATING STATISTICS | ||||||||||||||
| (unaudited) | ||||||||||||||
| Three Months Ended | ||||||||||||||
| March 31, | % | |||||||||||||
| Operating Metrics | 2015 | 2014 | Change | |||||||||||
| Number of operating days | 63 | 63 | 0.0 | % | ||||||||||
| Domestic | ||||||||||||||
| Radiation oncology treatment plans (total) (1) | 9,352 | 8,261 | 13.2 | % | ||||||||||
| Radiation oncology treatments per day (total) | 3,378 | 3,017 | 12.0 | % | ||||||||||
| Net patient service revenue per radiation oncology | $ | 739 | $ | 753 | -1.8 | % | ||||||||
| treatment (total) | ||||||||||||||
| Radiation oncology treatment plans (same market) (1,2) | 8,113 | 7,914 | 2.5 | % | ||||||||||
| Radiation oncology treatments per day (same market) (2) | 2,893 | 2,869 | 0.8 | % | ||||||||||
| Net patient service revenue per radiation oncology | ||||||||||||||
| treatment (same market) (2) | $ | 744 | $ | 758 | -1.9 | % | ||||||||
| International | ||||||||||||||
| Total number of open cases | 4,501 | 4,281 | 5.1 | % | ||||||||||
| Revenue per radiation oncology case | $ | 6,003 | $ | 4,595 | 30.6 | % | ||||||||
| Three Months Ended | ||||||||||||||
| March 31, | % | |||||||||||||
| Revenue Details | 2015 | 2014 | Change | |||||||||||
| Net patient service revenue per Consolidated Statements | ||||||||||||||
| of Operations and Comprehensive Loss | $ | 254,255 | $ | 212,796 | ||||||||||
| Less net patient service revenue ICC | (89,469 | ) | (69,712 | ) | ||||||||||
| Less net patient service revenue professional services | (1,944 | ) | (1,917 | ) | ||||||||||
| Plus net patient service revenue unconsolidated MSAs (3) | 21,504 | 21,639 | ||||||||||||
| Less international net patient service revenue | (27,020 | ) | (19,672 | ) | ||||||||||
| Domestic freestanding net patient service revenue | $ | 157,326 | $ | 143,134 | 9.9 | % | ||||||||
| March 31, | ||||||||||||||
| Center Details | 2015 | 2014 | ||||||||||||
| Radiation therapy centers - freestanding (domestic) | 136 | 138 | ||||||||||||
| Radiation therapy centers - freestanding (international) | 35 | 35 | ||||||||||||
| Radiation therapy centers - professional / other | 11 | 12 | ||||||||||||
| Total radiation therapy centers | 182 | 185 | ||||||||||||
| (1) Total radiation oncology treatment plans represent the number of prescriptions issued by the physicians to start the treatment process. | ||||||||||||||
| (2) Same market is defined as markets that have been open in excess of 12 months. | ||||||||||||||
| This includes in-market acquisitions and conversion of existing professional only relationships to freestanding. | ||||||||||||||
| (3) Medical services agreement | ||||||||||||||