MedCath Corp. (MDTH, Financial) filed Quarterly Report for the period ended 2008-12-31.
Medcath Corporation focuses on the diagnosis and treatment of cardiovascular disease. They design develop own and operate hospitals in partnership with cardiologists and cardiovascular surgeons that they believe have established reputations for clinical excellence. While each of their hospitals is licensed as a general acute care hospital which provides comprehensive medical care for patients needing a wide range of healthcare services they focus on serving the unique needs of patients suffering from cardiovascular disease. MedCath Corp. has a market cap of $123.28 million; its shares were traded at around $10.02 with a P/E ratio of 7.31 and P/S ratio of 0.2. MedCath Corp. had an annual average earning growth of 0.9% over the past 5 years.
Interest expense. Interest expense decreased $1.1 million or 27.3% to $2.8 million for the first quarter of fiscal 2009 from $3.9 million for the first quarter of fiscal 2008. The $1.1 million decrease in interest expense is primarily attributable to the overall reduction in our outstanding debt and the capitalization of interest on our capital expansion projects.
Loss on early extinguishment of debt. During December 2008, we redeemed all of our outstanding 9 7/8% Senior Notes for $111.2 million, which included the payment of a repurchase premium of $5.0 million and accrued interest of $4.2 million. The Senior Notes were redeemed through borrowings under the Credit Facility and available cash on hand. In addition, we incurred $2.0 million in expenses related to the write-off of previously incurred financing costs associated with the Senior Notes.
Income from discontinued operations, net of taxes. Income from discontinued operations, net of taxes, reflects the results of Dayton Heart Hospital and Cape Cod Cardiology for the first quarter of fiscal 2009 and Dayton Heart Hospital, Cape Cod Cardiology and the Heart Hospital of Lafayette for the first quarter of fiscal 2008, respectively. Income from discontinued operations increased to $3.9 million, net of tax, for the first quarter of fiscal 2009 from $0.8 million, net of tax, for the first quarter of fiscal 2008. The increase is the result of the gain recognized on the sale of Cape Cod Cardiology during the first quarter of fiscal 2009. The gain, net of tax, was approximately $4.0 million offset by losses for Dayton Heart Hospital related to the write off of uncollected accounts receivable.
Capital Expenditures. Expenditures, including accrued but unpaid amounts, for property and equipment for the first quarter of fiscal years 2009 and 2008 were $26.2 million and $14.9 million, respectively. Cash paid for property and equipment was $30.0 million and $14.0 million for the first quarter of fiscal years 2009 and 2008, respectively. During the first quarter ended December 31, 2008, we continued to develop our hospital in Kingman, Arizona and various expansion projects at our existing hospitals. The amount of capital expenditures we incur in future periods will depend largely on the type and size of strategic investments we make in future periods.
Obligations and Availability of Financing. At December 31, 2008, we had $132.9 million of outstanding debt, $15.3 million of which was classified as current. Of the outstanding debt, $86.2 million was outstanding under our Credit Facility. See Note 6 to the consolidated financial statements in this report. $46.4 million was outstanding to various lenders to our hospitals, and the remaining $0.3 million of debt was outstanding to lenders for MedCath Partners diagnostic services under capital leases and other miscellaneous indebtedness. Of the $86.2 million outstanding under our Credit Facility, $11.2 million was outstanding under the Revolver. The maximum availability under the Revolver is $85.0 million which is reduced by the aforementioned outstanding borrowings under the Revolver and outstanding letters of credit totaling $3.5 million.
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Medcath Corporation focuses on the diagnosis and treatment of cardiovascular disease. They design develop own and operate hospitals in partnership with cardiologists and cardiovascular surgeons that they believe have established reputations for clinical excellence. While each of their hospitals is licensed as a general acute care hospital which provides comprehensive medical care for patients needing a wide range of healthcare services they focus on serving the unique needs of patients suffering from cardiovascular disease. MedCath Corp. has a market cap of $123.28 million; its shares were traded at around $10.02 with a P/E ratio of 7.31 and P/S ratio of 0.2. MedCath Corp. had an annual average earning growth of 0.9% over the past 5 years.
Highlight of Business Operations:
Personnel expense. Personnel expense increased 0.5% to $50.7 million for the first quarter of fiscal 2009 from $50.4 million for the first quarter of fiscal 2008. The $0.3 million increase in personnel expense was due primarily to the increase in clinical labor to support the increase in adjusted admissions and annual merit increases offset by a reduction in stock based compensation expense. Stock based compensation expense was $1.0 million for the first quarter of fiscal 2009 compared to $3.7 million for the first quarter of fiscal 2008.Interest expense. Interest expense decreased $1.1 million or 27.3% to $2.8 million for the first quarter of fiscal 2009 from $3.9 million for the first quarter of fiscal 2008. The $1.1 million decrease in interest expense is primarily attributable to the overall reduction in our outstanding debt and the capitalization of interest on our capital expansion projects.
Loss on early extinguishment of debt. During December 2008, we redeemed all of our outstanding 9 7/8% Senior Notes for $111.2 million, which included the payment of a repurchase premium of $5.0 million and accrued interest of $4.2 million. The Senior Notes were redeemed through borrowings under the Credit Facility and available cash on hand. In addition, we incurred $2.0 million in expenses related to the write-off of previously incurred financing costs associated with the Senior Notes.
Income from discontinued operations, net of taxes. Income from discontinued operations, net of taxes, reflects the results of Dayton Heart Hospital and Cape Cod Cardiology for the first quarter of fiscal 2009 and Dayton Heart Hospital, Cape Cod Cardiology and the Heart Hospital of Lafayette for the first quarter of fiscal 2008, respectively. Income from discontinued operations increased to $3.9 million, net of tax, for the first quarter of fiscal 2009 from $0.8 million, net of tax, for the first quarter of fiscal 2008. The increase is the result of the gain recognized on the sale of Cape Cod Cardiology during the first quarter of fiscal 2009. The gain, net of tax, was approximately $4.0 million offset by losses for Dayton Heart Hospital related to the write off of uncollected accounts receivable.
Capital Expenditures. Expenditures, including accrued but unpaid amounts, for property and equipment for the first quarter of fiscal years 2009 and 2008 were $26.2 million and $14.9 million, respectively. Cash paid for property and equipment was $30.0 million and $14.0 million for the first quarter of fiscal years 2009 and 2008, respectively. During the first quarter ended December 31, 2008, we continued to develop our hospital in Kingman, Arizona and various expansion projects at our existing hospitals. The amount of capital expenditures we incur in future periods will depend largely on the type and size of strategic investments we make in future periods.
Obligations and Availability of Financing. At December 31, 2008, we had $132.9 million of outstanding debt, $15.3 million of which was classified as current. Of the outstanding debt, $86.2 million was outstanding under our Credit Facility. See Note 6 to the consolidated financial statements in this report. $46.4 million was outstanding to various lenders to our hospitals, and the remaining $0.3 million of debt was outstanding to lenders for MedCath Partners diagnostic services under capital leases and other miscellaneous indebtedness. Of the $86.2 million outstanding under our Credit Facility, $11.2 million was outstanding under the Revolver. The maximum availability under the Revolver is $85.0 million which is reduced by the aforementioned outstanding borrowings under the Revolver and outstanding letters of credit totaling $3.5 million.
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