Skilled Healthcare Q1 debt totals $451 million, adjusted EPS down 41%

By Lisa Kerner

Charlotte, N.C., May 7 - Skilled Healthcare Group, Inc.'s long-term debt, including amounts due in less than one year, increased by $2.7 million from Dec. 31, to $451.7 million.

The company's long-term debt, including the current portion, is comprised of a $406.2 million first-lien senior secured term loan, net of $2.8 million of original issue discount; $40 million of outstanding borrowings under a revolving line of credit facility due in 2015; and $5.5 million of other debt, according to comments made by executive vice president and chief financial Dev Ghose during the company's first-quarter 2013 earnings conference call on Tuesday.

At March 31, Skilled Healthcare had about $56.4 million of available liquidity under its revolver, after considering $3.6 million of outstanding letters of credit, and about $5.1 million in cash, said Ghose.

The long-term debt had a weighted average reaming duration of 2.9 years and an average all-in interest rate of 7.7%.

"Our interest coverage and leverage ratios continue to remain with our debt covenants," Ghose said.

"For the first quarter of 2013, our fixed-charge coverage ratio was up 2.5 times compared to the minimum requirement of 1.75, and our leverage ratio was 4.5 (times), compared to the maximum of 4.75."

Boyd Hendrickson, chairman and chief executive officer was "encouraged by the stable underlying business metrics" but disappointed with the company's adjusted earnings per share of $0.10 for the quarter, a 41.2% decline from the first quarter of 2012.

Skilled Healthcare reported first-quarter revenue of $218.9 million, a decrease of 0.2% from the prior-year period.

EBITDA was 8.2% of revenue and down 31.2% from the same quarter last year at $17.9 million.

Net income was down more than about 50% at $3.1 million, while adjusted net income was down 42.5% from the first quarter of 2012 at $3.6 million.

For the full year 2013, Skilled Healthcare expects consolidated revenue to be between $880 million and $890 million, EBITDA to be in the range of $95 million to $99 million, EBITDAR to be in the range of $114.5 million to $118.5 million and net income per common diluted share to be between $0.57 and $0.63.

Skilled Healthcare is a Foothill Ranch, Calif.-based operator of skilled nursing facilities, assisted living facilities, rehabilitation therapy and hospice businesses and home health care.

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