Skilled Healthcare Group announces unaudited financial results for the third quarter of 2009

Skilled Healthcare GroupNov 3 2009

Skilled Healthcare Group, Inc. (NYSE:SKH) today announced its unaudited consolidated financial operating results for the three- and nine-month periods ended September 30, 2009.

Third Quarter 2009 Consolidated Results

• Total consolidated revenue for the quarter ended September 30, 2009 was $188.4 million, an increase of 3.2 percent, compared to total consolidated revenue of $182.5 million in the third quarter of 2008.
• Adjusted EBITDA was $25.9 million for the quarter ended September 30, 2009, an increase of 3.7 percent, compared to $24.9 million during the same period in 2008.
• Adjusted EBITDAR was $30.4 million for the quarter ended September 30, 2009, up 2.3 percent compared to $29.7 million for the same period in 2008.
• Net income for the quarter ended September 30, 2009 totaled $9.1 million, up 5.6 percent, compared to $8.6 million for the third quarter of 2008.
• Diluted earnings per common share from continuing operations for the quarter ended September 30, 2009 were $0.25, up 8.7 percent, compared to $0.23 for the same period in 2008. Including the loss per common share from discontinued operations for the quarter ended September 30, 2009, diluted earnings per common share were $0.24. During the third quarter, the Company closed its unprofitable hospice business in Ventura, California, which represented less than five percent of total hospice revenues in the nine-month period ended September 30, 2009.

Long-Term Care Services - Third Quarter 2009 Segment Results

• Total revenue for the long-term care services segment, which represented over 88 percent of consolidated revenues, was $166.2 million for the quarter ended September 30, 2009, an increase of $6.6 million, or 4.1 percent, compared to the same period a year ago.
• Skilled mix was 22.4 percent in the third quarter of 2009, compared to 23.0 percent during the same period in 2008.
• Occupancy rates were 83.2 percent during the third quarter of 2009, compared to 84.1 percent in the third quarter of 2008.
• The percentage of Medicare days in the upper nine RUG categories was 41.2 percent in the third quarter of 2009, an increase of 110 basis points, compared to 40.1 percent during the third quarter of 2008.

Ancillary Services – Third Quarter 2009 Segment Results

• The Company’s third-party rehabilitation therapy services’ segment revenue was $19.1 million for the quarter ended September 30, 2009, an increase of 9.8 percent, compared to the same period a year ago.

• Third-party rehabilitation therapy accounted for over 10 percent of total consolidated revenues in the third quarter of 2009, compared to 9.5 percent in the third quarter of 2008.
• The Company’s hospice business, which represented 1.6 percent of total consolidated revenues, reported total revenue of $3.0 million for the quarter ended September 30, 2009, compared to $5.4 million in the third quarter of 2008. Hospice revenues were reduced by a $2.1 million reserve in the third quarter of 2009 due primarily to the statutory Medicare patient reimbursement limitation, or cap, overage which is calculated annually (see Management Discussion below for more detail).