Skilled Healthcare Group Reports Full Year 2012 Adjusted EPS Of $0.72
FOOTHILL RANCH, Calif., Feb. 11, 2013 /PRNewswire/ — Skilled Healthcare Group, Inc. (NYSE: SKH) today announced its consolidated financial operating results for the three and twelve-month period ended December 31, 2012.
“Our strong cash flows from operating activities of $43 million for the 2012 year enabled us to reduce our debt by $26.5 million to $449.0 million as of December 31, 2012, in spite of the significant challenges associated with the extraordinary Medicare rate cut and anti-efficiency program changes that discourage group and concurrent therapy, which took effect in the fourth quarter of 2011 for our skilled nursing businesses, followed by the initiation of a new Manual Medical Review by CMS for therapy services under Medicare Part B,” said Boyd Hendrickson, Chairman and Chief Executive Officer of Skilled Healthcare Group.
Mr. Hendrickson continued, “In spite of these challenges, I am proud of the remarkable job done by the clinical professionals providing care in our agencies and facilities to remain focused on maintaining high quality patient care.”
Fourth Quarter 2012 Results
Revenue for the quarter ended December 31, 2012 was $219.2 million, an increase of 2.4% when compared to $214.1 million in the fourth quarter of 2011. Skilled mix(1) decreased 70 basis points to 21.3% in the fourth quarter of 2012 from 22.0% in the fourth quarter of 2011. Quality mix(2) in the fourth quarter of 2012 decreased 130 basis points to 68.5%, compared to 69.8% in the prior year period.
EBITDA(3) was $23.8 million, or 10.8% of revenue, for the quarter ended December 31, 2012, a decrease of 9.8% compared to $26.4 million, or 12.3% of revenue, in the same period a year ago. EBITDAR(3) was $28.6 million, or 13.0% of revenue, for the quarter ended December 31, 2012, a decrease of 8.3% compared to $31.2 million, or 14.6% of revenue, for the quarter ended December 31, 2011.
Net income for the quarter ended December 31, 2012 totaled $5.7 million, as compared to $6.7 million for the fourth quarter of 2011. Adjusted net income(4) for the quarter ended December 31, 2012, totaled $6.1 million, a decrease of 9.0% compared to adjusted net income of $6.7 million for the fourth quarter of 2011. Adjusted net income excludes certain items as described in the Reconciliation of Income (Loss) Before Provision for Income Taxes to Adjusted Net Income table at the end of this press release.
Net income per diluted share was $0.15 for the quarter ended December 31, 2012, as compared to $0.18 for the same period in 2011. Adjusted net income per diluted share was $0.16 for the quarter ended December 31, 2012, a decrease of 11.1% compared to adjusted net income per diluted share of $0.18 for the quarter ended December 31, 2011.
Long-Term Care Services Segment
Revenue for our long-term care services segment in the quarter ended December 31, 2012 was $165.8 million, an increase of $0.4 million, or 0.2%, as compared to $165.4 million for the same period a year ago. Revenue for this segment represented 75.6% of total revenue in the fourth quarter of 2012, compared to 77.3% of total revenue in the fourth quarter of 2011.
Therapy Services Segment
Revenue for Hallmark Rehabilitation, our rehabilitation therapy services segment, was $25.7 million for the quarter ended December 31, 2012, an increase of $1.9 million, or 8.4%, compared to the same period a year ago. Third-party rehabilitation therapy accounted for 11.7% of total revenue in the fourth quarter of 2012, compared to 11.1% of total revenue in the fourth quarter of 2011.
Hospice and Home Health Services Segment
Revenue for Signature Hospice and Home Health, our hospice and home health care services segment, was $27.7 million in the fourth quarter of 2012, an increase of $2.8 million, or 11.2%, compared to $24.9 million in the fourth quarter of 2011. Average daily hospice census grew to 1,379 for the three-months ended December 31, 2012 from 1,330 for the three-months ended December 31, 2011, an increase of 3.7%. The increase in census was due in significant part to the October 2011 acquisition of two hospice agencies.
Full Year 2012 Results
Revenue for the twelve-months ended December 31, 2012 was $872.6 million, an increase of 0.5% when compared to $868.4 million in the twelve-months ended December 31, 2011. Skilled mix decreased 110 basis points to 22.1% in 2012 from 23.2% in 2011. Quality mix in 2012 decreased 140 basis points to 69.4%, compared to 70.8% in the prior year period.
Adjusted EBITDA(3) was $100.8 million, or 11.6% of revenue, for 2012, a decrease of 22.5% compared to $130.0 million, or 15.0% of revenue, in the same period a year ago. Adjusted EBITDAR(5) was $119.3 million, or 13.7% of revenue, for 2012, a decrease of 19.6% compared to $148.4 million, or 17.1% of revenue, for 2011. Adjusted EBITDA includes certain items we have excluded from adjusted net income per diluted share, such as legal expenses for non-routine matters, IT outsourcing evaluation costs and amounts we recorded in 2012 for our 2011 hospice cap accrual.
Net income for 2012 was $21.6 million, as compared to a net loss( )of $204.0 million for 2011, which was attributable in large part to a non-cash intangible asset impairment charge of $270.5 million in the third quarter of 2011. Adjusted net income for 2012, totaled $27.2 million, a decrease of 35.2% compared to adjusted net income of $42.0 million for 2011. Adjusted net income for 2012, excludes certain items as described in the Reconciliation of Income (Loss) Before Provision for Income Taxes to Adjusted Net Income table at the end of this press release.
Net income per diluted share was $0.57 for 2012, as compared to net loss per share of $5.49 for 2011. Adjusted net income per diluted share was $0.72 for 2012, a decrease of 36.2% compared to adjusted net income per diluted share of $1.13 for the same period in 2011. Additionally, outstanding debt has been reduced by $26.5 million since December 31, 2011.
Long-Term Care Services Segment
Revenue for our long-term care services segment in 2012 was $661.5 million, a decrease of $30.8 million, or 4.5%, as compared to $692.3 million for 2011. Revenue for this segment represented 75.7% of total revenue in 2012, compared to 79.8% of total revenue in 2011. The decrease in revenue was primarily related to lower reimbursement rates from the impact of the October 2011 Medicare rate cut, a decrease in our skilled mix, and a shift from Medicare days to Managed Medicare days as more seniors elect Medicare Advantage.
Therapy Services Segment
Revenue for Hallmark Rehabilitation, our rehabilitation therapy services segment, was $104.4 million for 2012, an increase of $11.6 million, or 12.5%, compared to 2011. Third-party rehabilitation therapy accounted for 12.0% of total revenue in 2012, compared to 10.7% of total revenue in 2011.
Hospice and Home Health Services Segment
Revenue for Signature Hospice and Home Health, our hospice and home health care services segment, was $106.7 million in 2012, an increase of $23.4 million, or 28.1%, compared to $83.3 million in 2011. Average daily hospice census grew to 1,397 for 2012 from 1,269 for 2011, an increase of 10.1%. The increase in census was due in significant part to our October 2011 acquisition of two Cornerstone hospice agencies.
2013 Guidance
Skilled Healthcare Group, Inc. expects full year 2013 consolidated revenue to be between $885 million and $895 million, EBITDA to be in the range of $101 million to $105 million, EBITDAR to be in the range of $120.5 million to $124.5 million and net income per common diluted share to be between $0.67 and $0.73. This guidance assumes the following:
- Sequestration effective March 1, 2013
- Medicare market basket increase of 2% beginning October 1, 2013
- 2013 capital expenditures of approximately $20 to $23 million
- Average interest rate on outstanding debt of approximately 7.8%
- No benefit from HUD financing
- An effective tax rate of 39%
- Weighted average shares outstanding of 37.8 million
- No additional acquisitions, developments or divestitures
Conference Call
A conference call and webcast will be held tomorrow, Tuesday, February 12th, at 9:00 a.m. Pacific Time (12:00 noon Eastern Time) to discuss Skilled Healthcare Group’s consolidated financial results for the fourth quarter and full year 2012 and its outlook for 2013.
To participate in the call, interested parties may dial (800) 847-9525 and reference conference 94284653. Alternatively, interested parties may access the call in listen-only mode at www.skilledhealthcaregroup.com. A replay of the conference call will be available after 12:00 noon Pacific Time at www.skilledhealthcaregroup.com.
About Skilled Healthcare Group, Inc.
Skilled Healthcare Group, Inc., based in Foothill Ranch, California, is a holding company with subsidiary healthcare services companies, which in the aggregate had trailing twelve month revenue of approximately $873 million and approximately 15,000 employees as of December 31, 2012. Skilled Healthcare Group and its wholly-owned companies, collectively referred to as the “Company,” operate long-term care facilities and provide a wide range of post-acute care services, with a strategic emphasis on sub-acute specialty health care. The Company operates long-term care facilities in California, Iowa, Kansas, Missouri, Nebraska, Nevada, New Mexico and Texas, including 74 skilled nursing facilities that offer sub-acute care and rehabilitative and specialty health skilled nursing care, and 22 assisted living facilities that provide room and board and social services. In addition, the Company provides physical, occupational and speech therapy in Company-operated facilities and unaffiliated facilities. Furthermore, the Company provides hospice and home health care in Arizona, California, Idaho, Montana, New Mexico and Nevada. The Company leases 5 skilled nursing facilities in California to an unaffiliated third party operator. References made in this release to “Skilled Healthcare,” “the Company,” “we,” “us” and “our” refer to Skilled Healthcare Group, Inc. and each of its wholly-owned companies. More information about Skilled Healthcare is available at www.skilledhealthcaregroup.com.
Footnotes
---------
(1) Skilled mix represents the number
of Medicare and non-Medicaid
managed care patient days at
Skilled Healthcare Group's
affiliated skilled nursing
facilities divided by the total
number of patient days at Skilled
Healthcare Group's affiliated
skilled nursing facilities for
any given period.
(2) Quality mix represents non-
Medicaid revenue as a percentage
of total revenue.
(3) EBITDA is net income before
depreciation, amortization and
interest expense (net of interest
income) and the provision for
income taxes. EBITDAR is EBITDA
excluding facility rent expense.
Adjusted earnings before
interest, taxes, depreciation and
amortization, or Adjusted EBITDA,
reflects the non-GAAP
adjustments to net income that
are reflected in the
Reconciliation of Net Income to
EBITDA, Adjusted EBITDA and
Adjusted EBITDAR in this press
release.
(4) Adjusted net income per diluted
share and adjusted net income
each reflect the non-GAAP
adjustments to income before
provision for income taxes that
are reflected in the
Reconciliation of Income (Loss)
Before Provision for Income Taxes
to Adjusted Net Income table in
this press release.
(5) Adjusted EBITDAR is Adjusted
EBITDA excluding facility rent
expense as reflected in the
Reconciliation of Net Income to
EBITDA, Adjusted EBITDA and
Adjusted EBITDAR table in this
press release.
Forward-Looking Statements
This release includes “forward-looking statements.” You can identify these statements by the fact that they do not relate strictly to historical or current facts. These statements contain words such as “may,” “will,” “project,” “might,” “expect,” “believe,” “anticipate,” “intend,” “could,” “would,” “estimate,” “continue” or “pursue,” or the negative or other variations thereof or comparable terminology. They include statements about Skilled Healthcare’s expectations for 2013 full year consolidated revenue, EBITDA, EBITDAR and net income per diluted share. These forward-looking statements are based on current expectations and projections about future events, including the assumptions stated in this release.
Investors are cautioned that forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that cannot be predicted or quantified and, consequently, the actual performance of Skilled Healthcare may differ materially from that expressed or implied by such forward-looking statements.
Additionally, the Company faces a number of other risks and uncertainties, including, but not limited to, the factors described in Skilled Healthcare’s Annual Report on Form 10-K for the year ended December 31, 2012 filed with the Securities and Exchange Commission (including the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained therein).
Any forward-looking statements are made only as of the date of this release. Skilled Healthcare disclaims any obligation to update the forward-looking statements. Investors are cautioned not to place undue reliance on these forward-looking statements.
Any forward-looking statements are made only as of the date of this release. Skilled Healthcare disclaims any obligation to update the forward-looking statements. Investors are cautioned not to place undue reliance on these forward-looking statements.
Skilled Healthcare Group, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended Year Ended December 31,
December 31,
------------
2012 2011 2012 2011
---- ---- ---- ----
Revenue: (Unaudited) (Audited)
Net patient service
revenue $218,443 $213,340 $869,563 $866,194
Lease facility revenue 769 746 3,060 2,239
219,212 214,086 872,623 868,433
------- ------- ------- -------
Expenses:
Cost of services
(exclusive of rent cost
of revenue and
depreciation and
amortization shown
below) 185,385 177,021 730,974 697,279
Rent cost of revenue 4,773 4,869 18,507 18,399
General and
administrative 5,701 6,177 24,249 25,730
Litigation settlement
costs, (net of
recoveries) - - - (4,488)
Depreciation and
amortization 6,276 6,193 25,400 25,229
Impairment of long-
lived assets - - - 270,478
--- --- --- -------
202,135 194,260 799,130 1,032,627
------- ------- ------- ---------
Other (expenses) income:
Interest expense (8,884) (9,675) (37,760) (38,994)
Interest income 110 161 512 714
Other (expense) income,
net (52) (22) (32) (499)
Equity in earnings of
joint venture 526 372 1,948 1,955
Debt retirement costs - - (4,126) -
--- --- ------ ---
Total other (expenses)
income, net (8,300) (9,164) (39,458) (36,824)
------ ------ ------- -------
Income (loss) before
provision for income
taxes 8,777 10,662 34,035 (201,018)
Provision for income
taxes 3,082 3,936 12,438 3,025
----- ----- ------ -----
Net income (loss) $5,695 $6,726 $21,597 $(204,043)
====== ====== ======= =========
Income (loss) per share,
basic $0.15 $0.18 $0.58 $(5.49)
===== ===== ===== ======
Income (loss) per share,
diluted $0.15 $0.18 $0.57 $(5.49)
===== ===== ===== ======
Weighted-average common
shares outstanding,
basic 37,437 37,179 37,389 37,145
====== ====== ====== ======
Weighted-average common
shares outstanding,
diluted 37,543 37,285 37,589 37,145
====== ====== ====== ======
Skilled Healthcare Group, Inc.
Condensed Consolidated Balance Sheet and Cash Flow Data
(In thousands)
(Audited)
December 31, 2012 December 31, 2011
----------------- -----------------
Balance Sheet Data:
ASSETS
Cash and cash equivalents $2,003 $16,017
Other current assets 136,822 129,513
Property and equipment and
leased facility assets, net 380,658 386,294
Goodwill 85,609 84,299
Other assets 77,544 81,076
------ ------
Total assets $682,636 $697,199
======== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities less
current portion of long-
term debt $90,965 $99,780
Other long-term liabilities 42,873 48,340
Long-term debt 448,967 475,483
Stockholders' equity 99,831 73,596
------ ------
Total liabilities and
stockholders' equity $682,636 $697,199
======== ========
Year Ended December 31,
-----------------------
2012 2011
---- ----
Cash Flows Data:
Net cash provided by
operating activities $42,676 $99,380
Net cash used in investing
activities (19,525) (39,917)
Net cash used in financing
activities (37,165) (47,638)
------- -------
(Decrease) increase in cash
and cash equivalents (14,014) 11,825
Cash and cash equivalents at
beginning of period 16,017 4,192
------ -----
Cash and cash equivalents at
end of period $2,003 $16,017
====== =======
Skilled Healthcare Group, Inc.
Consolidated Key Performance Indicators
(Unaudited)
The following table summarizes our key performance indicators, along with other statistics, for each of the dates or periods indicated
Three Months Ended Year Ended December 31,
December 31,
------------
2012 2011 2012 2011
---- ---- ---- ----
Occupancy statistics
(skilled nursing
facilities):
Available beds in
service at end of
period 8,809 8,809 8,809 8,809
Available patient days 810,490 811,377 3,224,062 3,249,449
Actual patient days 672,024 673,330 2,675,234 2,698,994
Occupancy percentage 82.9% 83.0% 83.0% 83.1%
Average daily number of
patients 7,305 7,319 7,309 7,395
Hospice average daily
census 1,379 1,330 1,397 1,269
Home health episodic-
based admissions 2,174 1,723 8,341 5,239
Home health episodic-
based recertifications 472 322 1,624 885
EBITDA (in thousands) $23,827 $26,369 $96,683 $(137,509)
Adjusted EBITDA (in
thousands) $23,827 $26,369 $100,809 $130,042
Adjusted EBITDA margin 10.9% 12.3% 11.6% 15.0%
Adjusted EBITDAR (in
thousands) $28,600 $31,238 $119,316 $148,441
Adjusted EBITDAR margin 13.0% 14.6% 13.7% 17.1%
Revenue per patient day
(skilled nursing
facilities prior to
intercompany
eliminations):
LTC only Medicare (Part
A) $519 $505 $512 $558
Medicare blended rate
(Part A & B) 577 567 573 616
Managed care (Part A) 380 381 382 386
Managed care blended
rate (Part A & B) 390 392 391 391
Medicaid 163 156 160 154
Private and other 173 172 172 173
--- --- --- ---
Weighted-average for
all $236 $235 $236 $246
==== ==== ==== ====
Patient days by payor
(skilled nursing
facilities):
Medicare 81,890 92,921 349,205 404,419
Managed care 61,069 55,271 240,951 221,796
Total skilled mix days 142,959 148,192 590,156 626,215
------- ------- ------- -------
Private pay and other 109,255 111,354 428,823 435,257
Medicaid 419,810 413,784 1,656,255 1,637,522
Total days 672,024 673,330 2,675,234 2,698,994
======= ======= ========= =========
Patient days as a
percentage of total
patient days (skilled
nursing facilities):
Medicare 12.2% 13.8% 13.1% 15.0%
Managed care 9.1 8.2 9.0 8.2
Skilled Mix 21.3 22.0 22.1 23.2
---- ---- ---- ----
Private pay and other 16.3 16.5 16.0 16.1
Medicaid 62.4 61.5 61.9 60.7
Total 100.0% 100.0% 100.0% 100.0%
===== ===== ===== =====
Revenue from (total
company):
Medicare 32.6% 35.0% 33.6% 37.4%
Managed care, private
pay, and other 35.9 34.8 35.8 33.4
Quality mix 68.5 69.8 69.4 70.8
---- ---- ---- ----
Medicaid 31.5 30.2 30.6 29.2
Total 100.0% 100.0% 100.0% 100.0%
===== ===== ===== =====
Skilled Healthcare Group, Inc.
Facility Ownership
(Unaudited)
As of December 31,
------------------
2012 2011
---- ----
Facilities:
Skilled nursing facilities
operated:
Owned 52 52
Leased 22 22
--- ---
Total skilled nursing
facilities operated 74 74
Total licensed beds 9,181 9,183
Skilled nursing facilities
leased to unaffiliated third
party operator 5 5
Assisted living facilities
Owned 21 21
Leased 1 2
--- ---
Total assisted living
facilities 22 23
Total licensed beds 1,228 1,312
Total facilities 101 102
Percentage owned facilities 77.2% 76.5%
Skilled Healthcare Group, Inc.
Reconciliation of Net Income (Loss) to EBITDA, Adjusted EBITDA and Adjusted EBITDAR
(In thousands)
(Unaudited)
Three Months Ended Year Ended December 31,
December 31,
------------
2012 2011 2012 2011
---- ---- ---- ----
Net income
(loss) $5,695 $6,726 $21,597 $(204,043)
Interest
expense, net of
interest income 8,774 9,514 37,248 38,280
Provision for
income taxes 3,082 3,936 12,438 3,025
Depreciation and
amortization
expense 6,276 6,193 25,400 25,229
----- ----- ------ ------
EBITDA 23,827 26,369 96,683 (137,509)
------ ------ ------ --------
Recovery of
expenses
related to
Westside
divestiture - - - (265)
Debt retirement
costs - - 4,126 -
Disposals of
property and
equipment - - - 290
Expenses related
to the
exploration of
strategic
alternatives - - - 716
Exit costs
related to the
Northern
California
divestiture - - - 820
Litigation
settlement
costs, (net of
recoveries) - - - (4,488)
Impairment of
long-lived
assets - - - 270,478
--- --- --- -------
Adjusted EBITDA 23,827 26,369 100,809 130,042
------ ------ ------- -------
Rent cost of
revenue 4,773 4,869 18,507 18,399
----- ----- ------ ------
Adjusted EBITDAR $28,600 $31,238 $119,316 $148,441
======= ======= ======== ========
Skilled Healthcare Group, Inc.
Reconciliation of Income (Loss) Before Provision for Income Taxes to Adjusted Net Income
(In thousands, except per share data)
(Unaudited)
Three Months Ended Year Ended December 31,
December 31,
------------
2012 2011 2012 2011
---- ---- ---- ----
Income (loss)
from operations $8,777 $10,662 $34,035 $(201,018)
Debt retirement
costs - - 4,126 -
Double bond
interest
expense for
bond - - 1,192 -
Recovery of
expenses
related to
Westside
divestiture - - - (265)
Disposals of
property and
equipment - - - 290
Impairment of
long-lived
assets - - - 270,478
Litigation
settlement
costs, net of
recoveries - - - (4,488)
Expenses related
to the
exploration of
strategic
alternatives - - - 716
Exit costs
related to the
Northern
California
divestiture - - - 820
Legal Expenses
for non-
routine matters 634 - 1,226 -
IT outsourcing
evaluation
costs 110 - 514 -
2011 Hospice cap
accrual - - 1,900 -
Adjusted income
before
provision for
income taxes 9,521 10,662 42,993 66,533
----- ------ ------ ------
Provision for
income taxes 3,383 3,936 15,768 24,928
Add back tax
credit
valuation
allowance
related to
Northern
California
divestiture - - - (388)
Adjusted net
income $6,138 $6,726 $27,225 $41,993
====== ====== ======= =======
Weighted-
average common
shares
outstanding,
diluted 37,543 37,285 37,589 37,353
Adjusted net
income per
share, diluted $0.16 $0.18 $0.72 $1.13
Effective tax
rate 35.5% 36.9% 36.7% 36.9%
Skilled Healthcare Group, Inc.
Reconciliation of Forecasted Net Income to Forecasted EBITDA and Forecasted EBITDAR
Year Ending December 31, 2013
(In millions)
(Unaudited)
Outlook
-------
Low High
--- ----
Net income
guidance $25.3 $27.8
Interest
expense, net
of interest
income 34.0 34.0
Provision for
income taxes 16.2 17.7
Depreciation
and
amortization
expense 25.5 25.5
EBITDA
guidance 101.0 105.0
Rent cost of
revenue 19.5 19.5
EBITDAR
guidance $120.5 $124.5
------ ------
We believe that a report of adjusted net income per share, EBITDA, EBITDAR, Adjusted EBITDA and Adjusted EBITDAR provides consistency in our financial reporting and provides a basis for the comparison of results of core business operations between our current, past and future periods. Adjusted net income per share, EBITDA, EBITDAR, Adjusted EBITDA and Adjusted EBITDAR are primary indicators management uses for planning and forecasting in future periods, including trending and analyzing the core operating performance of our business from period-to-period without the effect of U.S. GAAP expenses, revenues and gains (losses) that are unrelated to the day-to-day performance of our consolidated and segmented business. We also use adjusted net income per share, EBITDA, EBITDAR, Adjusted EBITDA and Adjusted EBITDAR to benchmark the performance of our consolidated and segmented business against expected results, analyzing year-over-year trends as described below and to compare our operating performance to that of our competitors.
Management uses adjusted net income per share, EBITDA, EBITDAR, Adjusted EBITDA and Adjusted EBITDAR to assess the performance of our core business operations, to prepare operating budgets and to measure our performance against those budgets on a consolidated and segment level. Segment management uses these metrics to measure performance on a business unit by business unit basis. We typically use adjusted net income per share, Adjusted EBITDA and Adjusted EBITDAR for these purposes on a consolidated basis as the adjustments to adjusted net income per share, EBITDA and EBITDAR are not generally allocable to any individual business unit and we typically use EBITDA and EBITDAR to compare the operating performance of each skilled nursing and assisted living facility, as well as to assess the performance of our operating segments. EBITDA, EBITDAR, Adjusted EBITDA and Adjusted EBITDAR are useful in this regard because they do not include such costs as interest expense (net of interest income), income taxes, depreciation and amortization expense, rent cost of revenue (in the case of EBITDAR and Adjusted EBITDAR) and special charges, which may vary from business unit to business unit and period-to-period depending upon various factors, including the method used to finance the business, the amount of debt that we have determined to incur, whether a facility is owned or leased, the date of acquisition of a facility or business, the original purchase price of a facility or business unit or the tax law of the state in which a business unit operates. These types of charges are dependent on factors unrelated to the underlying business unit performance. As a result, we believe that the use of adjusted net income per share, EBITDA, EBITDAR, Adjusted EBITDA and Adjusted EBITDAR provides a meaningful and consistent comparison of our underlying business units between periods by eliminating certain items required by U.S. GAAP which have little or no significance to their day-to-day operations.
The use of adjusted net income per share, EBITDA, EBITDAR, Adjusted EBITDA, Adjusted EBITDAR and other non-GAAP financial measures has certain limitations. Our presentation of adjusted net income per share, EBITDA, EBITDAR, Adjusted EBITDA, Adjusted EBITDAR or other non-GAAP financial measures may be different from the presentation used by other companies and therefore comparability may be limited. Depreciation and amortization expense, interest expense, income taxes and other items have been and will be incurred and are not reflected in the presentation of adjusted net income per share, EBITDA, EBITDAR, Adjusted EBITDA or Adjusted EBITDAR. Each of these items should also be considered in the overall evaluation of our results. Additionally, adjusted net income per share, EBITDA, EBITDAR, Adjusted EBITDA, Adjusted EBITDAR do not consider capital expenditures and other investing activities and should not be considered as a measure of our liquidity. We compensate for these limitations by providing the relevant disclosure of our depreciation and amortization, interest and income taxes, capital expenditures and other items both in our reconciliations to the U.S. GAAP financial measures and in our consolidated financial statements, all of which should be considered when evaluating our performance.
Adjusted net income per share, EBITDA, EBITDAR, Adjusted EBITDA, Adjusted EBITDAR and certain other non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with U.S. GAAP. Adjusted net income per share, EBITDA, EBITDAR, Adjusted EBITDA, Adjusted EBITDAR and other non-GAAP financial measures should not be considered as an alternative to net income, operating income, or any other operating performance measure prescribed by U.S. GAAP, nor should these measures be relied upon to the exclusion of U.S. GAAP financial measures. Adjusted net income per share, EBITDA, EBITDAR, Adjusted EBITDA, Adjusted EBITDAR and other non-GAAP financial measures reflect additional ways of viewing our operations that we believe, when viewed with our U.S. GAAP results and the reconciliations to the corresponding U.S. GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. You are strongly encouraged to review our financial information in its entirety and not to rely on any single financial measure.
Investor Contact:
Skilled Healthcare Group, Inc.
Dev Ghose or Chris Felfe
(949) 282-5800
SOURCE Skilled Healthcare Group, Inc.
