LINCARE HOLDINGS INC. 
By CLEARWATER, Fla., Feb. 8 /PRNewswire-FirstCall/ -- Lincare Holdings Inc. (Nasdaq: LNCR) today announced financial results for the fourth quarter and year ended December 31, 2009.
For the quarter ended December 31, 2009, net revenues were $405.8 million, compared with net revenues of $415.1 million for the fourth quarter of 2008. The Company estimates that the 2% decrease in net revenues in the fourth quarter of 2009 was comprised of 13% internal and acquisition growth offset by a 15% negative impact from Medicare reimbursement reductions that took effect in 2009. Net income for the quarter ended December 31, 2009, was $40.6 million, compared with net income of $55.6 million for the fourth quarter of 2008. Diluted earnings per share were $0.61 for the quarter ended December 31, 2009, compared with $0.76 diluted earnings per share for the comparable prior year period.
Net revenues for the year ended December 31, 2009, were $1.550 billion, compared with net revenues of $1.665 billion for the comparable period in 2008. The Company estimates that the 7% decrease in net revenues for the year ended December 31, 2009 was comprised of 10% internal and acquisition growth offset by a 17% negative impact from Medicare reimbursement reductions that took effect in 2009. Net income for the year ended December 31, 2009, was $136.1 million, compared with net income of $227.3 million for the prior year. Diluted earnings per share were $1.99 for the year ended December 31, 2009, compared with $3.04 diluted earnings per share for the comparable period last year.
The Company's financial results for the fourth quarter and year ended December 31, 2009 were impacted by dramatic reductions in Medicare reimbursement for the Company's primary product lines resulting from the implementation on January 1, 2009 of previously enacted legislation. The legislation included reductions in Medicare payment amounts of 9.5% for certain items of durable medical equipment, including oxygen, additional regulated Medicare price reductions for stationary oxygen equipment of another 2.3% (for a total reduction of 11.8%) and the implementation of a new reimbursement methodology for oxygen equipment from continuous monthly payment for as long as the equipment is in use by a Medicare beneficiary to a capped rental arrangement whereby payment for oxygen equipment may not extend beyond a period of continuous use of 36 months. In addition, the 2009 results reflect lower reimbursement for certain respiratory medications covered by Medicare. The Company estimates that these changes reduced net revenues in the fourth quarter and year ended December 31, 2009 by approximately $61.2 million and $274.7 million, respectively.
John P. Byrnes, Lincare's Chief Executive Officer, said, "We are pleased with Lincare's operating and financial performance in 2009. Our company met the significant challenges presented by an unprecedented reduction in Medicare payment amounts for our services while continuing to focus on meeting the needs of each of our customers in order to improve their quality of life and to help them manage their disease at home. We remain committed to our strategy to maintain our position as the market leader in the provision of home-based respiratory therapy services and to expand our reach into markets where we believe we can add value and compete on the basis of efficiency and quality of care."
Lincare generated $353.1 million of cash from operating activities during 2009 and invested $110.0 million in net capital expenditures and $5.1 million in business acquisitions. The Company repurchased 12,164,462 shares of its common stock during the year for $343.3 million. As of December 31, 2009, total long-term obligations including current maturities were $484.9 million, cash and investments were $79.1 million and common shares outstanding were 65,352,099.
The Company's revenues and earnings are expected to be impacted in fiscal year 2010 by a further reduction in Medicare reimbursement for stationary oxygen equipment. The Centers for Medicare and Medicaid Services has implemented a lower monthly payment amount for stationary oxygen equipment furnished to Medicare beneficiaries in 2010 of $173.17, a reduction of 1.5% from the $175.79 rate in effect in 2009. As a result, the Company estimates that net revenues and operating income in 2010 will be negatively impacted by approximately $9.0 million.
Lincare, headquartered in Clearwater, Florida, is one of the nation's largest providers of respiratory therapy and other services to patients in the home. The Company provides services and equipment to approximately 750,000 customers in 48 states through 1,056 local centers.
Statements in this release concerning future results, performance or expectations are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. All forward-looking statements included in this document are based upon information available to Lincare as of the date hereof and Lincare assumes no obligation to update any such forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause Lincare's actual results, levels of activity, performance or achievements to be materially different from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statements. In some cases, forward-looking statements that involve risks and uncertainties contain terminology such as "may," "will," "should," "could," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue" or variations of these terms or other comparable terminology.
Key factors that have an impact on Lincare's ability to attain any estimates contained in this release include potential reductions in reimbursement rates by government and other third party payors, changes in reimbursement policies, the demand for Lincare's products and services, the availability of appropriate acquisition candidates and Lincare's ability to successfully complete and integrate acquisitions, efficient operation of Lincare's existing and future operating facilities, regulation and/or regulatory action affecting Lincare or its business, economic and competitive conditions, access to borrowed and/or equity capital on favorable terms and other risks described in the filings of Lincare with the Securities and Exchange Commission.
In developing its forward-looking statements, Lincare has made certain assumptions relating to reimbursement rates and policies, internal growth and acquisitions and the outcome of various legal and regulatory proceedings. If the assumptions used by Lincare differ materially from what actually occurs, then actual results could vary significantly from the performance projected in the forward-looking statements. Lincare is under no duty to update any of the forward-looking statements after the date of this release.
LINCARE HOLDINGS INC.
Financial Summary
(Unaudited)
(In thousands, except share and per share data)
For the three months ended
--------------------------
December 31, December 31,
2009 2008
---- ----
(As adjusted)(1)
Net revenues $405,800 $415,092
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Cost and expenses:
Costs of goods and services 113,417 98,450
Operating expenses 97,477 101,264
Selling, general and administrative
expenses 83,229 83,178
Bad debt expense 6,087 6,227
Depreciation and amortization expense 28,767 28,909
Operating income 76,823 97,064
Interest expense, net 8,706 7,421
----- -----
Income before income taxes 68,117 89,643
Income taxes 27,506 34,028
------ ------
Net income $40,611 $55,615
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Basic earnings per common share $0.62 $0.76
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Diluted earnings per common share $0.61 $0.76
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Weighted average number of common shares
outstanding 65,685,071 73,464,442
========== ==========
Weighted average number of common
shares and common share equivalents
outstanding 66,413,211 73,533,442
========== ==========
For the twelve months ended
---------------------------
December 31, December 31,
2009 2008
---- ----
(As adjusted)(1)
Net revenues $1,550,477 $1,664,580
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Cost and expenses:
Costs of goods and services 431,291 400,812
Operating expenses 389,759 395,706
Selling, general and administrative
expenses 330,589 326,886
Bad debt expense 23,257 24,969
Depreciation and amortization expense 118,120 117,527
Operating income 257,461 398,680
Interest expense, net 34,074 33,136
------ ------
Income before income taxes 223,387 365,544
Income taxes 87,291 138,278
------ -------
Net income $136,096 $227,266
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Basic earnings per common share $2.00 $3.11
===== =====
Diluted earnings per common share $1.99 $3.04
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Weighted average number of common shares
outstanding 68,076,183 73,044,008
========== ==========
Weighted average number of common
shares and common share equivalents
outstanding 68,497,280 75,616,366
========== ==========
(1) As adjusted for adoption of FASB ASC Topic 470-20.
LINCARE HOLDINGS INC.
Selected Balance Sheet Data
(Unaudited)
(In thousands)
December 31, December 31,
2009 2008
---- ----
(As adjusted)(1)
Cash and Investments $79,078 $133,051
Accounts Receivable, Net 159,542 176,797
Current Assets 284,950 287,122
Total Assets 1,877,194 1,938,809
Current Liabilities 163,467 167,742
Long-Term Obligations, Including
Current Maturities 484,871 460,947
Stockholders' Equity 901,915 1,028,326
(1) As adjusted for adoption of FASB ASC Topic 470-20.
SOURCE Lincare Holdings Inc.
