KINDRED HEALTHCARE ANNOUNCES THE PURCHASE OF 22 UNDER-PERFORMING FACILITIES FROM VENTAS, INC.
Louisville, KY (June 29, 2007) – Kindred Healthcare, Inc. ("Kindred" or the "Company") (NYSE:KND) today announced that it has purchased for resale 22 under-performing facilities previously leased from Ventas, Inc. (“Ventas”) (NYSE:VTR). As previously announced, Kindred had entered into definitive agreements with Ventas to acquire 21 nursing centers and one long-term acute care hospital (collectively, the “Facilities”) for $171.5 million. In addition, Kindred paid a lease termination fee of $3.5 million. The current annual rents for the Facilities are approximately $10.3 million.
The Facilities, which contain 2,634 licensed nursing center beds and 220 licensed hospital beds, generated pretax losses of approximately $10 million for the year ended December 31, 2006. Upon closing, Kindred will account for the operations of the Facilities as discontinued operations.
Kindred expects to generate between $80 million and $90 million in proceeds from the sale of the Facilities and the related operations. Kindred expects to record a net loss of approximately $60 million to $70 million in the second quarter of 2007 relating to these divestitures. Kindred expects a total net (after tax) cash outlay of approximately $46 million to $52 million.
“We are focused on disposing of these facilities as soon as possible,” said Paul J. Diaz, President and Chief Executive Officer of the Company. “Completing this transaction allows us to divest of these operating losses and reposition our portfolio to focus on our cluster market strategic growth opportunities.”
Forward Looking Statements
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding the Company’s expected future financial position, results of operations, cash flows, financing plans, business strategy, budgets, capital expenditures, competitive positions, growth opportunities, plans and objectives of management and statements containing the words such as “anticipate,” “approximate,” “believe,” “plan,” “estimate,” “expect,” “project,” “could,” “should,” “will,” “intend,” “may” and other similar expressions, are forward-looking statements.
Such forward-looking statements are inherently uncertain, and stockholders
and other potential investors must recognize that actual results may differ
materially from the Company’s expectations as a result of a variety
of factors, including, without limitation, those discussed below. Such
forward-looking statements are based upon management’s current expectations
and include known and unknown risks, uncertainties and other factors,
many of which the Company is unable to predict or control, that may cause
the Company’s actual results or performance to differ materially
from any future results or performance expressed or implied by such forward-looking
statements. These statements involve risks, uncertainties and other factors
discussed below and detailed from time to time in the Company’s
filings with the Securities and Exchange Commission.
In addition to the factors set forth above, other factors that may affect
the Company’s plans or results include, without limitation, (a)
the Company’s ability to operate pursuant to the terms of its debt
obligations and its master leases with Ventas; (b) the Company’s
ability to meet its rental and debt service obligations; (c) the Company’s
ability to complete the resale of the Facilities; (d) the Company’s
and AmerisourceBergen Corporation’s (NYSE:ABC) ability to complete
the proposed merger of their respective institutional pharmacy operations,
including the receipt of all required regulatory approvals and the satisfaction
of other closing conditions to the proposed transaction; (e) adverse developments
with respect to the Company’s results of operations or liquidity;
(f) the Company’s ability to attract and retain key executives and
other healthcare personnel; (g) increased operating costs due to shortages
in qualified nurses, therapists and other healthcare personnel; (h) the
effects of healthcare reform and government regulations, interpretation
of regulations and changes in the nature and enforcement of regulations
governing the healthcare industry; (i) changes in the reimbursement rates
or methods of payment from third party payors, including the Medicare
and Medicaid programs, changes arising from and related to the Medicare
prospective payment system for long-term acute care hospitals, the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003, and changes
in Medicare and Medicaid reimbursements for the Company’s nursing
centers; (j) national and regional economic conditions, including their
effect on the availability and cost of labor, materials and other services;
(k) the Company’s ability to control costs, particularly labor and
employee benefit costs; (l) the Company’s ability to successfully
pursue its development activities and successfully integrate new operations,
including the realization of anticipated revenues, economies of scale,
cost savings and productivity gains associated with such operations; (m)
the increase in the costs of defending and insuring against alleged professional
liability claims and the Company’s ability to predict the estimated
costs related to such claims; (n) the Company’s ability to successfully
reduce (by divestiture of operations or otherwise) its exposure to professional
liability claims; (o) the Company’s ability to successfully dispose
of unprofitable facilities; and (p) the Company’s ability to ensure
and maintain an effective system of internal controls over financial reporting.
Many of these factors are beyond the Company’s control. The Company
cautions investors that any forward-looking statements made by the Company
are not guarantees of future performance. The Company disclaims any obligation
to update any such factors or to announce publicly the results of any
revisions to any of the forward-looking statements to reflect future events
or developments.
About Kindred Healthcare
Kindred Healthcare, Inc. (NYSE:KND) is a Fortune 500 healthcare services company, based in Louisville, Kentucky, with annualized revenues of $4.5 billion that provides services in approximately 600 locations in 38 states. Kindred through its subsidiaries operates long-term acute care hospitals, skilled nursing centers, institutional pharmacies and a contract rehabilitation services business, Peoplefirst Rehabilitation Services, across the United States. Kindred’s 56,000 employees are committed to providing high quality patient care and outstanding customer service to become the most trusted and respected provider of healthcare services in every community we serve. For more information, go to www.kindredhealthcare.com.
CONTACT:
Richard A. Lechleiter
Executive Vice President and Chief Financial Officer
(502) 596-7734
