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Kindred Healthcare Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 8, 2012 01:22PM

Kindred Healthcare Inc. (KND) filed Quarterly Report for the period ended 2012-06-30. Kindred Healthcare, Inc. has a market cap of $512.1 million; its shares were traded at around $10.79 with a P/E ratio of 6.5 and P/S ratio of 0.1.



Highlight of Business Operations:

As a result of deterioration in professional liability and workers compensation underwriting results of the Company’s limited purpose insurance subsidiary in 2011, the Company made a capital contribution of $9 million during the six months ended June 30, 2012 to its limited purpose insurance subsidiary. Conversely, as a result of improved professional liability underwriting results of the Company’s limited purpose insurance subsidiary in 2010, the Company received a distribution of $3 million during the six months ended June 30, 2011 from its limited purpose insurance subsidiary. These transactions were completed in accordance with applicable regulations. Neither the contribution nor the distribution had any impact on earnings.

The Company’s effective income tax rate was 41.4% and 34.3% in the second quarter of 2012 and 2011, respectively, and 41.1% and 43.6% for the six months ended June 30, 2012 and 2011, respectively. The variances in the effective income tax rates for both 2012 periods compared to the same periods in 2011 primarily related to the impact of lower pretax earnings in 2011 and the impact of the nondeductible income tax treatment of certain transaction costs in 2011 incurred in connection with the RehabCare Merger.

Revenues decreased 6% to $536 million in the second quarter of 2012 compared to $569 million in the same period of 2011 and decreased 5% to $1.1 billion for the six months ended June 30, 2012 from the same period in 2011. The decline in revenues in both periods was primarily a result of the 2011 CMS Rules and a decline in admissions. Same-facility admissions declined 4% in the second quarter of 2012 and 1% for the six months ended June 30, 2012 compared to the same respective prior year periods. Same-facility patient days declined 3% in the second quarter of 2012 and 2% for the six months ended June 30, 2012, compared to the same respective prior year periods, primarily as a result of declines in Medicare average length of stay.

Operating income for the Company’s operating divisions excludes allocations of corporate overhead. These costs aggregated $44 million in the second quarter of both 2012 and 2011, and $87 million and $82 million for the six months ended June 30, 2012 and 2011, respectively. The increase for the six months ended June 30, 2012 was primarily attributable to increased costs of assuming the RehabCare operations. As a percentage of consolidated revenues, corporate overhead totaled 2.9% and 3.4% in the second quarter of 2012 and 2011, respectively, and totaled 2.8% and 3.3% for the six months ended June 30, 2012 and 2011, respectively.

As a result of deterioration in professional liability and workers compensation underwriting results of the Company’s limited purpose insurance subsidiary in 2011, the Company made a capital contribution of $9 million during the six months ended June 30, 2012 to its limited purpose insurance subsidiary. Conversely, as a result of improved professional liability underwriting results of the Company’s limited purpose insurance subsidiary in 2010, the Company received a distribution of $3 million during the six months ended June 30, 2011 from its limited purpose insurance subsidiary. These transactions were completed in accordance with applicable regulations. Neither the contribution nor the distribution had any impact on earnings.

Read the The complete Report



Stocks Discussed: KND,
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