CHARLOTTE, N.C., Jan. 5 /PRNewswire-FirstCall/ -- MedCath Corporation
(Nasdaq: MDTH), a healthcare provider focused on high acuity healthcare
services, predominately the diagnosis and treatment of cardiovascular disease,
today announced the completion of the sale of its ownership in a joint venture
in its MedCath Partners division. MedCath had previously indicated during its
fourth quarter earnings call on November 13, 2008, that its partner had
provided notification of its intent to acquire MedCath's ownership in the
joint venture, as allowed in the joint venture's operating agreement following
the venture's 10th anniversary. The sale was completed December 31, 2008.
MedCath received $6.9 million in cash for its 51% ownership interest in
the joint venture. For the twelve month period ended September 30, 2008, the
joint venture contributed $11.2 million in net revenue, $3.3 million in
Adjusted EBITDA and $1.6 million in minority interest expense to MedCath's
consolidated earnings. MedCath will continue to provide certain medical
equipment to its former partner via a long-term lease, which will contribute
$0.7 million in net revenue and Adjusted EBITDA annually. MedCath intends to
use the proceeds from the sale for general corporate purposes.
Use of Non-GAAP Financial Measures
This release contains measures of MedCath's historical financial
performance that are not calculated and presented in conformity with generally
accepted accounting principles ("GAAP"), including Adjusted EBITDA. Adjusted
EBITDA represents MedCath's income from continuing operations before interest
expense; interest and other income, net; income tax expense; depreciation;
amortization; share-based compensation expense; pre-opening expenses; loss on
disposal of property, equipment and other assets; loss on early extinguishment
of debt; equity in net earnings of unconsolidated affiliates; and minority
interest share of earnings of consolidated subsidiaries. MedCath's management
uses Adjusted EBITDA to measure the performance of the company's various
operating entities, to compare actual results to historical and budgeted
results, and to make capital allocation decisions. Management provides
Adjusted EBITDA to investors to assist them in performing their analyses of
MedCath's historical operating results. Further, management believes that many
investors in MedCath also invest in, or have knowledge of, other healthcare
companies that use Adjusted EBITDA as a financial performance measure.
Because Adjusted EBITDA is a non-GAAP measure, Adjusted EBITDA, as defined
above, may not be comparable to other similarly titled measures of other
companies.
MedCath Corporation, headquartered in Charlotte, N.C., is a healthcare
provider focused on high acuity services with the diagnosis and treatment of
cardiovascular disease being a primary service offering. MedCath owns an
interest in and operates nine hospitals with a total of 676 licensed beds,
located in Arizona, Arkansas, California, Louisiana, New Mexico, South Dakota,
and Texas. MedCath is in the process of developing its tenth hospital, which
is anticipated to open in fall 2009, in Kingman, Ariz. In addition, MedCath
and its subsidiary MedCath Partners provide services in diagnostic and
therapeutic facilities in various states.
SOURCE MedCath Corporation