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Gentiva Health Services, Inc. (GTIV)
Q3 2008 Earnings Call Transcript
October 30, 2008 10:00 am ET
Steve Paige – SVP, General Counsel and Secretary
Ron Malone – Chairman and CEO
Tony Strange – President and COO
John Potapchuk – EVP, CFO and Treasurer
Arthur Henderson – Jefferies & Co.
Whit Mayo – Robert Baird
Ralph Giacobbe – Credit Suisse
Darren Lehrich – Deutsche Bank
Newton Juhng – BB&T Capital Markets
Sheryl Skolnick – CRT Capital Group
John Ransom – Raymond James
Previous Statements by GTIV
» Gentiva Health Services, Inc. Q2 2009 Earnings Call Transcript
» Gentiva Health Services, Inc. Q1 2009 Earnings Call Transcript
» Gentiva Health Services, Inc. Q4 2008 Earnings Call Transcript
It is now my pleasure to turn the floor over to your host, Steve Paige, General Counsel. Sir, you may begin your conference.
Good morning, everyone. I’m Steve Paige, General Counsel of Gentiva Health Services, and this is Gentiva’s third quarter 2008 earnings call. Speaking on the call today are Ron Malone, Gentiva’s Chairman and Chief Executive Officer; Tony Strange, President and Chief Operating Officer; and John Potapchuk, our Chief Financial Officer. We hope that each of you had a chance to review the company’s earnings report, which we released earlier this morning.
All statements made during this call relating to future results and events are forward-looking statements that are based on our current expectations. Actual results could differ materially from those projected in forward-looking statements because of a number of risk factors and uncertainties, which are discussed in our annual and quarterly SEC filings and in the cautionary statements contained in our press release and on our web site.
Our call today will be consistent with the SEC’s Regulation FD. We encourage participants to ask their questions during the call, since we have certain limitations on comments that can be made in individual inquiries. Today’s call also conforms to Regulation G, regarding the reconciliation of GAAP and non-GAAP disclosure. As a result, we will not discuss non-GAAP financial measures on this call, except for those set forth in our press release.
You may access a replay of this call on our web site for the next seven days. A transcript of the call will be posted to our site within the next 36 hours and will be available for the next 12 months.
Following today’s prepared remarks, we’ll open the call to questions. Please limit your initial comments to one question and one follow-up, so that we can accommodate as many callers as possible in the allotted time. Let me now turn the call over to Gentiva’s Chief Executive Officer, Ron Malone, for comments on our third quarter and year-to-date 2008 activities.
Good morning. Thank you, Steve, and thanks to everyone for joining us. The third quarter was a productive one for Gentiva, both financially and strategically. We delivered solid financial results, led by 26% growth in operating contribution in our Home Health segment on a 17% increase in revenues. And during the quarter, we completed the sale of a majority stake in CareCentrix in a deal valued at $147 million. The transaction sets Gentiva on a clear path to invest in and grow our home health business, including our industry-leading specialty programs.
In many ways, our performance this quarter validates our strategy of focusing on the delivery of services to the aging population, which will continue to grow rapidly over the next several years. Company-wide, Medicare revenues rose more than 20% in the quarter, to over $165 million and that figure presented a 14% same-store increase. The Medicare revenue increase was driven by the expansion and performance of our specialty program, including the opening of 20 new locations in the third quarter, as well as our treatment of higher-acuity patients. With the third quarter expansion, we now have more than 270 programs, with nearly three dozen new rollouts planned for the fourth quarter. At the same time, we added 220 net new, full-time caregivers, well beyond the already-strong recruitment levels of the last several quarters. These achievements drove greater than 12% revenue growth for the company overall to $348 million in the third quarter. Please note that the overall results include nearly a full quarter of CareCentrix results prior to the divestiture.
EBITDA was over $30 million, which was up 19%, excluding the significant gain we booked on the CareCentrix transaction and various special charges. Diluted earnings per share reached $0.42, compared with $0.30 in the prior year period, again excluding the gain on the sale. As we move forward, we are employing a pretty simple and proven formula; by investing in our patients and our caregivers, we will position Gentiva for continued growth, leadership and value creation. We’re working hard to set the standard for high-quality, innovative and efficient care in home health. We’re focused on building the industry’s most capable and most productive team of caregivers.
As a result, we will not only grow Gentiva but also improve the profile of homecare overall as a preferred platform in a revitalized national healthcare system. So you can continue to see us invest in the business, both organically and through acquisition. We’re doing it organically by adding capacity, by adding to our roster of specialty care programs and expanding our network of locations, and by creating the automated tools that make our caregivers more productive. We will also continue to play a lead role in consolidating what remains a very fragmented industry, using our strong balance sheet to capitalize on opportunities as they present themselves.