American HomePatient Reports Financial Results for the Three Months Ended March 31, 2010

BRENTWOOD, Tenn.--(BUSINESS WIRE)-- American HomePatient, Inc. (OTCBB: AHOM), one of the nation’s largest home health care providers, today announced its financial results for the three months ended March 31, 2010.

Revenues for the first quarter of 2010 were $67.0 million compared to $66.2 million for the first quarter of 2009, representing an increase of $0.8 million, or 1.2%. The increase in revenue is primarily attributable to growth in the Company’s core respiratory product lines of oxygen and sleep therapy, partially offset by reductions in revenue associated with non-respiratory home medical equipment and infusion therapy as a result of the Company’s continued reduction in emphasis of these less profitable product lines.

Operating expenses declined in the first quarter of 2010 compared to the first quarter of 2009 by approximately $0.6 million, or 1.7%. The decrease in operating expenses were primarily the result of improved operating efficiencies.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) is a non-GAAP financial measurement that is calculated as net income excluding interest, taxes, depreciation and amortization. Adjusted EBITDA (EBITDA excluding debt restructuring expenses) was $8.0 million, or 11.9% of net revenue, for the first quarter of 2010 compared to $7.3 million, or 11.1% of net revenue, for the same period of 2009.

Net loss for the first quarter of 2010 was $(3.8) million, or $(0.21) per diluted share, compared to net loss of $(5.2) million, or $(0.29) per diluted share, for the first quarter of 2009.

Prior to January 1, 2010, the Company accounted for its 50%-owned joint ventures as equity investments. Effective January 1, 2010, the Company began consolidating its 50%-owned joint ventures as a result of the Company’s adoption of Accounting Standards Update 2009-17, which is effective for periods beginning after December 15, 2009. For comparative purposes, prior period financial statements have been revised to reflect consolidation of the 50%-owned joint ventures retrospectively.

Secured Debt Maturity and Restructuring Transactions

The Company had secured debt of $226.4 million that was due to be repaid on August 1, 2009. As previously announced, the Company has entered into an agreement with its senior debt holders and its largest stockholder, an investment fund managed by Highland Capital Management, to complete transactions that are intended to result in a going-private transaction followed by a restructuring of the Company’s secured debt. The restructuring agreement contemplates that the Company will seek shareholder approval to reincorporate in Nevada, and, if approved, the Nevada entity will commence a tender offer to acquire all outstanding shares of stock not held by Highland managed accounts for $0.67 per share. If these transactions are completed, the stock of American HomePatient would cease to be publicly traded.

American HomePatient, Inc. is one of the nation’s largest home health care providers with operations in 33 states. Its product and service offerings include respiratory services, infusion therapy, parenteral and enteral nutrition, and medical equipment for patients in their home. American HomePatient, Inc.’s common stock is currently traded in the over-the-counter market or, on application by broker-dealers, in the NASD’s Electronic Bulletin Board under the symbol AHOM or AHOM.OB.

American HomePatient, Inc. prepares its financial statements in accordance with U.S. generally accepted accounting principles (GAAP). American HomePatient, Inc. also provides information related to non-GAAP financial measurements such as EBITDA, and from time to time, other non-GAAP financial measurements that adjust for certain items outside of the ordinary course of its business. To enable interested parties to reconcile non-GAAP measures to the Company’s GAAP financial statements, the Company clearly defines EBITDA and quantifies all other adjustments to GAAP measurements (see Schedule B). The Company provides EBITDA information, a widely used non-GAAP financial measurement, as a performance measure to assist in analyzing the Company’s operations and in comparing the Company to its competitors. The Company provides other non-GAAP financial measurements that adjust for certain items outside of the ordinary course of business in order to assist in comparing the Company’s current operating performance to its historical performance. These adjustments typically reflect non-recurring items but sometimes reflect items, such as dispositions of assets and restructuring charges that are not technically non-recurring but are outside of the ordinary course of operations. Investors should note that such measures may not be comparable to similarly titled measures used by other companies, and investors are encouraged to use this information only in connection with the information contained in the Company’s GAAP financial statements.

Certain statements made in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management’s current expectations and include known and unknown risks, uncertainties and other factors, many of which the Company is unable to predict or control, that may cause the Company’s actual results or performance to materially differ from any future results or performance expressed or implied by such forward-looking statements. These statements involve risks and uncertainties, including, without limitation, risks and uncertainties regarding the maturity of the Company’s secured debt, current and future reimbursement rates, and reimbursement reductions and the Company’s ability to mitigate the impact of the reductions. These risks and uncertainties are in addition to risks, uncertainties, and other factors detailed from time to time in the Company’s filings with the Securities and Exchange Commission. The Company cautions investors that any forward-looking statements made by the Company are not necessarily indicative of future performance. The Company is not responsible for updating the information contained in this press release beyond the published date, or for changes made to this document by wire services or Internet services.


American HomePatient, Inc.

Schedule A

Summary Financial Data

(In thousands, except per share data)
Three Months Ended March 31,
2010 2009
Revenues, net $ 67,005 $ 66,160
Cost of sales and related services 14,569 14,378
Cost of rentals and other revenues, including rental equipment depreciation 8,065 8,568
Operating expenses 34,457 35,065
Bad debt expense 1,796 1,296
General and administrative expenses 5,116 5,126
Depreciation, excluding rental equipment, and amortization 932 1,024
Interest expense, net 3,798 3,866
Other (income) expense (87 ) 14
Change of control income   (3 )   (3 )
Loss from operations before income taxes (1,638 ) (3,174 )
Provision for income taxes 1,135 1,164
Net loss   (2,773 )   (4,338 )
Less: Net income attributable to the noncontrolling interest   (996 )   (830 )
Net loss attributable to American HomePatient, Inc. $ (3,769 ) $ (5,168 )
Basic loss per common share attributable to American HomePatient, Inc common shareholders $ (0.21 ) $ (0.29 )
Diluted loss per common share attributable to American HomePatient, Inc common shareholders $ (0.21 ) $ (0.29 )
March 31, December 31,
2010 2009
Cash and cash equivalents $ 19,832 $ 23,613
Restricted cash - 250
Net patient receivables 32,066 29,447
Other receivables   336     521  
Total receivables 32,402 29,968
Net inventories 11,039 12,240
Other current assets   5,805     6,690  
Total current assets 69,078 72,761
Property and equipment, net 33,483 33,790
Goodwill 123,621 123,621
Other assets   16,531     16,977  
Total Assets $ 242,713   $ 247,149  
Current portion of long-term debt and capital leases $ 227,327 $ 229,120
Accounts payable 15,148 14,153
Other current liabilities   21,809     21,765  
Total current liabilities 264,284 265,038
Long-term debt and capital leases, less current portion - 3
Deferred tax liability 13,026 12,031
Other noncurrent liabilities   101     82  
Total liabilities 277,411 277,154
American HomePatient, Inc. shareholders' deficit (41,908 ) (37,411 )
Noncontrolling interest   7,210     7,406  
Total shareholders' deficit   (34,698 )   (30,005 )
Total Liabilities and Shareholders' Deficit $ 242,713   $ 247,149  
American HomePatient, Inc.

Schedule B

Reconciliation of Non-GAAP Financial Measurements to GAAP Financial Statements

(In thousands)
Three Months Ended March 31,
2010 2009
Net loss $ (3,769 ) $ (5,168 )
Provision for income taxes 1,135 1,164
Interest expense, net 3,798 3,866
Rental equipment depreciation 5,769 6,410
Other depreciation and amortization   932     1,024  
Earnings before interest, taxes, depreciation, and amortization (EBITDA) $ 7,865   $ 7,296  
Debt restructuring expense (Note A) 90 31
Adjusted EBITDA $ 7,955   $ 7,327  
Note A: Debt restructuring expense is excluded to determine adjusted EBITDA, as the expense is non-recurring.


American HomePatient, Inc.
Joseph F. Furlong, President and CEO, 615-221-8884
Primary Contact:
Stephen L. Clanton, Executive VP & CFO, 615-221-8884

KEYWORDS:   United States  North America  Tennessee

INDUSTRY KEYWORDS:   Health  Hospitals  Other Health  Nursing  General Health  Managed Care