American Renal Associates (ARA) Misses Q4 EPS by 9c, Revenues Miss

American Renal Associates (NYSE: ARA) reported Q4 EPS of ($0.22), $0.09 worse than the analyst estimate of ($0.13). Revenue for the quarter came in at $206.08 million versus the consensus estimate of $217.4 million.

“After a 42-year career in the healthcare industry, I am announcing my intention to retire in 2020. Co-founding ARA approximately two decades ago has been the highlight of my career, and it has been a tremendous privilege to lead this organization and our exceptional team ever since. Today, we provide high quality, clinically integrated care to more than 17,300 patients in partnership with 400 physicians in 246 dialysis clinics across 27 states, and I am so proud of the growth we’ve achieved,” Carlucci said. “Now is the right time for a new leader who can build on our established foundation and further realize ARA’s growth opportunities in a way that still prioritizes our Core Values.”

Steven Silver, Senior Managing Director of Centerbridge Partners, L.P., and Member of the Company’s Board of Directors, said: “On behalf of the Board, I would like to personally thank and commend Joe for his leadership. Among his many accomplishments during his long and distinguished career, Joe co-founded ARA and pioneered the physician partnership model within the dialysis sector, establishing the Company as a differentiated physician-driven organization focused on excellent patient care. We are grateful to Joe that he will continue in his role as CEO and Chairman while we work to identify a successor to lead ARA’s next phase of growth and value creation.”

Fourth Quarter 2019 Highlights (all percentage changes compare Q4 2019 to Q4 2018 unless noted):

Certain metrics, including those expressed on an adjusted basis, are Non-GAAP financial measures (See “Use of Non-GAAP Financial Measures” and the reconciliation tables further below).

• Patient service operating revenues decreased 0.8% to $206.1 million;
• Net income attributable to American Renal Associates Holdings, Inc. was $0.1 million, as compared to a net loss of $0.6 million in Q4 2018;
• Adjusted EBITDA less noncontrolling interests (“Adjusted EBITDA-NCI”) was $23.0 million, as compared to $24.7 million in Q4 2018;
• Adjusted net income attributable to American Renal Associates Holdings, Inc. was $6.5 million, or $0.19 per share, for Q4 2019;
• Total dialysis treatments increased 4.8%, of which 3.2% was non-acquired growth. Normalized total treatment growth was 6.0%, and normalized non-acquired treatment growth was 4.4%; and
• As of December 31, 2019, the Company operated 246 outpatient dialysis clinics serving more than 17,300 patients.

Carlucci said, “We are pleased that ARA achieved our 2019 guidance. We remain encouraged by our treatment growth performance, with the fourth quarter and fiscal year 2019 normalized total treatment growth of 6.0% and 7.3%, respectively. These volume trends continue to demonstrate that more patients continue to choose ARA to receive high quality dialysis care.”

Carlucci added, “As indicated in our outlook for 2020, we expect to achieve year-over-year growth in Adjusted EBITDA-NCI despite an anticipated reduction in Calcimimetic reimbursement. We will continue to remain focused on improving our operating efficiency and strengthening our balance sheet, while strategically capturing the growth and development opportunities that remain ahead.”

For earnings history and earnings-related data on American Renal Associates (ARA) click here.

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