Rotech Healthcare first quarter adjusted EBITDA increases 13% to $28.3 million

Rotech Healthcare Inc. (OTCBB: ROHI) (the "Company") today announced financial results for the first quarter ended March 31, 2011.

“This was in spite of a $3.7 million decline in Medicare reimbursements and other non-patient service revenue”

Highlights for the first quarter ended March 31, 2011 include:

CAPITAL STRUCTURE

  • We completed a refinancing of our former Senior Subordinated Notes due 2012 in March 2011 with the issuance of $290.0 million in aggregate principal amount of Senior Second Lien Notes. Along with the October 2010 offering of $230.0 million in Senior Secured Notes to refinance our former payment-in-kind term loan facility, we have now addressed our short-term debt maturities until 2015 and 2018, the respective maturity dates of our Senior Secured Notes and our Senior Second Lien Notes.

GROWTH

  • As of March 31, 2011 revenue generating patients (including patients from equipment and asset purchases) in the core product lines of oxygen and CPAP grew 13.6% compared to March 31, 2010.

ADJUSTED EBITDA

  • Adjusted EBITDA increased 13% to $28.3 million for the three months ended March 31, 2011 from $25.2 million for the three months ended March 31, 2010.
  • The Company's ratio of net debt to last twelve months Adjusted EBITDA decreased to 4.0 times at March 31, 2011 compared to 4.8 times at March 31, 2010.

"In comparing first quarter of 2011 with that of 2010, we are pleased to report improvement in profitability with increases in gross profit and adjusted EBITDA percentages, as well as reductions in SG&A percentage," said Philip Carter, President and Chief Executive Officer. "This was in spite of a $3.7 million decline in Medicare reimbursements and other non-patient service revenue," added Mr. Carter.

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