Kindred Healthcare, Inc. (KND) Reports In-Line Q1 EPS; Reaffirms

Kindred Healthcare, Inc. (NYSE: KND) reported Q1 EPS of $0.32, in-line with the analyst estimate of $0.32. Revenue for the quarter came in at $1.3 billion versus the consensus estimate of $1.32 billion.

Kindred Healthcare, Inc. sees FY2014 EPS of $1.05-$1.25, versus the consensus of $1.16.

Paul J. Diaz, Chief Executive Officer of the Company, commented, “We are very pleased to report a solid start to 2014. As we expected, hospital volumes improved sequentially in the first quarter, which historically has been our seasonally strongest quarter. That said, we continued to experience the same volume and utilization challenges experienced recently by many healthcare providers and successfully managed costs to mitigate the impact.”

Mr. Diaz further noted, “Our RehabCare division continues to make great progress, as evidenced by our operating income increase and margin improvement, notwithstanding Medicare reimbursement reductions. In addition, we added 45 net new skilled nursing rehabilitation sites of service during the quarter. The efforts we have made to reshape our nursing center division are continuing to pay off as we saw a significant improvement in operating margins in the first quarter. We are developing three additional transitional care centers in Indianapolis, Phoenix and Las Vegas, which will add to the momentum in this division.”

“Our Care Management division continues to make operating improvements in our home health and hospice operations as we assimilate numerous acquisitions and execute on a more standardized operating model. Our recent acquisitions of Senior Home Care and Kindred Home Based Primary Care (formerly Western Reserve Senior Care) have performed well and strengthen our commitment to further expand our Care Management division. We have made significant improvements in our management, processes and technology and hope to apply those tools across a larger platform over time.”

Benjamin A. Breier, President and Chief Operating Officer of the Company, commented, “Our recently announced acquisition of the Silver State Accountable Care Organization (‘ACO’) in Las Vegas, Nevada, is a very exciting transaction for Kindred, and the partnership marks our first ownership and direct management of an ACO anywhere in the country. We are always identifying opportunities to learn and grow, and Silver State, along with our home-based primary care physician strategy, and our care transitions programs in many of our integrated markets are all examples of our efforts to develop, test and deploy new care delivery and payment models across our platform. Our stated goal of advancing value-based care models in multiple markets over the next few years remains on track.”

Commenting on the Company’s strategic initiatives, Mr. Diaz commented, “We continue to make great strides in completing our efforts to reposition our business with the ongoing transfer of the 59 Ventas nursing centers. We also closed the previously announced acquisition of two leased nursing centers and terminated the lease of an unprofitable hospital.”

“Our recent $2.25 billion debt refinancing reinforces our capabilities to expand our continuum of post-acute care services in our Integrated Care Markets and provides the flexibility to return capital to our shareholders through a recurring quarterly dividend. We remain committed to improving our long-term growth, profitability and financial position and enhancing our Integrated Care Market capabilities, particularly in home health and hospice services. We also continue to evaluate various opportunities to redeploy our management capabilities, industry leading infrastructure and financial resources as we move forward with the growth phase of our strategic plan.”

For earnings history and earnings-related data on Kindred Healthcare, Inc. (KND) click here.

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