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Ventas Annual Report, Year Ended Dec 31, 1995

Filing Date
Filed March 29, 1996
Period End
December 31, 1995
Security
VTR
In the record · 2016–202610-K1110-Q348-K128

VTR filed 11 annual reports (10-K), 34 quarterly reports (10-Q) and 128 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Apr ’17Apr ’17
  2. Leadership change8-K · Oct ’19Oct ’19
  3. Leadership change8-K · Mar ’22Mar ’22
  4. Material agreement8-K · Jan ’26Jan ’26

01—Abstract

Summary

Summary of the 10-K filed March 29, 1996. Cited figures are marked; the original filing is the authoritative source.

Vencor, Inc. (Louisville, Kentucky; NYSE: VC) reported net loss of $14.9 milliona for 1995 on revenues of $2.32 billion, compared with net income of $85.9 million in 1994 and $65.7 million in 1993.

The loss reflects $109.4 millionb of non-recurring transactions in 1995, including $128.4 million of pretax charges in the third quarter tied primarily to the Hillhaven Merger, plus a $23.3 million after-tax extraordinary loss on debt extinguishment. Income from operations before non-recurring items was stated as $101.9 million, or $1.45 per share fully diluted. Revenues rose 14.3% to $2.32 billion, driven by hospitals (up 26.4%), nursing centers, Vencare contract services (up 183.6%) and pharmacies.

The September 1995 merger with The Hillhaven Corporation, accounted for as a pooling of interests, created one of the largest U.S. providers of elderly-focused healthcare, with 36 long-term intensive care hospitals, 311 nursing centers with 39,480 licensed beds, 55 pharmacy outlets and 23 retirement communities. Management estimates the merger synergies could increase pretax income by approximately $100 millionc per year by 1997. Cash from operations was $113.6 million in 1995, down from $133.0 million in 1994, and the company noted that growth in accounts receivable and delays in state Medicaid and managed care payments had weighed on cash flow.

Balance sheet capacity expanded: total assets rose to $1.91 billion and stockholders' equity to $772.1 milliond, while long-term debt was $778.1 million. A $1 billion Credit Facility was established, with about $300 million available at year-end. The company issued 2.2 million shares in a public offering for $66.5 million and converted or redeemed its convertible debt.

Capital expenditures were $136.9 million in 1995 and are planned at approximately $175 million in 1996. The company disclosed Medicare at 57% and Medicaid at 12% of hospital revenues, and noted ongoing regulatory exposure including Florida hospital rate-setting and proposed federal healthcare spending reductions.

02—Key points

Key Highlights

  1. Net loss of $14.9 million in 1995 versus net income of $85.9 million in 1994, driven by $109.4 million in non-recurring transactions
  2. Revenues increased 14.3% to $2,323,956 thousand (about $2.32 billion) from $2.03 billion in 1994
  3. Income from operations before non-recurring transactions was $101.9 million, or $1.45 per share fully diluted, per the filing
  4. Hillhaven Merger completed September 28, 1995, with management estimating up to $100 million in annual pretax synergies by 1997
  5. Vencare contracts grew to 2,008 at year-end 1995 from 948 in 1994, and Vencare revenues reached $110.4 million
  6. Long-term debt of $778.1 million and stockholders' equity of $772.1 million at December 31, 1995; $300 million available under the $1 billion Credit Facility
  7. Cash provided by operations fell to $113.6 million from $133.0 million, with capital expenditures of $136.9 million

03—Questions

Frequently Asked Questions

  1. Why did Vencor report a net loss in 1995?

    The net loss of $14.9 million reflects $109.4 million of non-recurring transactions, including $128.4 million of pretax charges in the third quarter primarily tied to the Hillhaven Merger, such as $53.8 million of employee benefit and severance costs and $26.9 million of losses on planned nursing center property dispositions. An extraordinary loss of $23.3 million after taxes on debt extinguishment also contributed.

  2. What did the Hillhaven Merger add to Vencor's business?

    The merger, completed September 28, 1995 and accounted for as a pooling of interests, combined Vencor with Hillhaven's operations. At year-end the company operated 36 long-term intensive care hospitals with 3,263 licensed beds, 311 nursing centers with 39,480 licensed beds, 55 pharmacy outlets and 23 retirement communities with 3,122 apartments.

  3. How is the company funding its growth and debt?

    Vencor established a $1 billion Credit Facility with a $400 million term loan and $600 million revolver, of which about $300 million was available at December 31, 1995. In 1995 it raised $66.5 million through a public offering of 2.2 million common shares and redeemed or converted its convertible debt. Management believes operating cash flow and Credit Facility availability are sufficient for expected liquidity needs.

  4. What regulatory and reimbursement risks does the filing highlight?

    Medicare and Medicaid represent a large share of revenues, with Medicare at 57% and Medicaid at 12% of hospital revenues in 1995. The filing cites possible federal Medicare and Medicaid spending reductions tied to budget balancing, Florida hospital rate-setting laws that could materially affect hospital revenues, and certificate-of-need requirements that could limit expansion.

04—Continue

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