EX-99.1
2
g00260exv99w1.txt
EX-99.1 PRESS RELEASE 03/14/06


                                                                    EXHIBIT 99.1

(AMERICAN HOMEPATIENT LOGO)                                         NEWS RELEASE
--------------------------------------------------------------------------------



Contact:  Joseph F. Furlong          or          Stephen L. Clanton
          President and CEO                      Executive VP & CFO
          (615) 221-8884                         (615) 221-8884
                                                 PRIMARY CONTACT


FOR IMMEDIATE RELEASE


               AMERICAN HOMEPATIENT REPORTS FINANCIAL RESULTS FOR
              THE FOURTH QUARTER AND YEAR ENDED DECEMBER 31, 2005
--------------------------------------------------------------------------------

BRENTWOOD, Tenn. (March 14, 2006) -- American HomePatient, Inc. (OTC: AHOM or
AHOM.OB), one of the nation's largest home health care providers, today
announced its financial results for the fourth quarter and year ended December
31, 2005.

Revenues for the fourth quarter of 2005 were $83.6 million compared to $84.2
million for the fourth quarter of 2004, representing a decrease of $0.6 million,
or 0.7%. For the year ended December 31, 2005, revenues were $328.4 million
compared to $335.8 million for the year ended December 31, 2004, representing a
decrease of $7.4 million, or 2.2%. Without the 2005 reimbursement reductions
associated with the Medicare Prescription Drug, Improvement, and Modernization
Act of 2003 ("MMA") described below, revenues would have increased $2.4 million,
or 2.9%, for the fourth quarter and $5.2 million, or 1.5%, for the year ended
December 31, 2005.

Net income for the fourth quarter of 2005 was $1.7 million compared to $8.2
million for the fourth quarter of 2004, representing a decrease of $6.5 million,
or 79.3%. For the year ended December 31, 2005, net income was $7.7 million
compared to $13.2 million for the year ended December 31, 2004, representing a
decrease of $5.5 million, or 41.7%. Diluted earnings per share for the fourth
quarter were $0.10 compared to $0.48 for the same quarter last year. For the
year, diluted earnings per share were $0.43 for 2005 compared to $0.78 for 2004.
Net income for the fourth quarter and twelve months ended December 31, 2005 was
materially impacted by the MMA reimbursement reductions as described below.
Also, during the latter half of 2004, the Company began implementing
productivity improvements in order to reduce operating expenses





in anticipation of the MMA reimbursement reductions that began in 2005. Net
income in the fourth quarter of 2004 reflected the favorable impact of these
operating expense reductions prior to the commencement of the negative impact of
the MMA reimbursement reductions.

Revenues and net income in the fourth quarter and the current year have been
negatively impacted by the 2005 reimbursement changes associated with the MMA.
These reimbursement changes reduced net income for the fourth quarter by
approximately $4.3 million, comprised of $3.0 million in reimbursement
reductions and $1.3 million in increased cost of sales. The reimbursement
reductions of $3.0 million include reductions in inhalation drugs of $0.5
million, reductions in certain items of durable medical equipment of $0.6
million, and reductions in oxygen of $1.9 million.

For the year ended December 31, 2005, reimbursement changes associated with the
MMA reduced net income by approximately $17.1 million, comprised of $12.6
million in reimbursement reductions and $4.5 million in increased cost of sales.
The reimbursement reductions of $12.6 million include reductions in inhalation
drugs of $4.5 million, reductions in certain items of durable medical equipment
of $2.1 million, and reductions in oxygen of $6.0 million.

Net income was positively impacted in the year ended December 31, 2005 by
reductions in operating expenses compared to 2004. For the year, operating
expenses decreased approximately $8.4 million, or 5.0%. The reductions in
operating expenses are a direct result of the Company's initiatives to improve
productivity and reduce costs in its branches and billing centers.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) is a
non-GAAP financial measurement that is calculated as net income excluding
interest, taxes, depreciation and amortization. EBITDA for the fourth quarter of
2005 was $13.4 million compared to $19.3 million for the same period last year.
For the twelve months of 2005, EBITDA was $53.2 million compared to $58.5
million for 2004. Adjusted EBITDA (calculated as EBITDA excluding reorganization
items) for the fourth quarter of 2005 was $13.4 million, or 16.0% of revenues,
compared to $19.4 million, or 23.0% of revenues, for the fourth quarter of 2004.
For the year ended December 31, 2005, adjusted EBITDA was $53.5 million, or
16.3% of revenues,





compared to $59.2 million, or 17.6% of revenues, for 2004. The 2005
reimbursement reductions, as discussed above, reduced EBITDA and adjusted EBITDA
by $4.3 million in the fourth quarter of 2005 and by $17.1 million in the year
ended December 31, 2005.

American HomePatient, Inc. is one of the nation's largest home health care
providers with 263 centers in 34 states. Its product and service offerings
include respiratory services, infusion therapy, parenteral and enteral
nutrition, and medical equipment for patients in their home. American
HomePatient, Inc.'s common stock is currently traded in the over-the-counter
market or, on application by broker-dealers, in the NASD's Electronic Bulletin
Board under the symbol AHOM or AHOM.OB.

American HomePatient, Inc. prepares its financial statements in accordance with
U.S. generally accepted accounting principles (GAAP). American HomePatient, Inc.
also provides information related to non-GAAP financial measurements such as,
EBITDA, adjusted EBITDA and, from time to time, other non-GAAP financial
measurements that adjust for certain items outside of the ordinary course of its
business. To enable interested parties to reconcile non-GAAP measures to the
Company's GAAP financial statements, the Company clearly defines EBITDA and
adjusted EBITDA, and quantifies all other adjustments to GAAP measurements (see
Schedule B). The Company provides EBITDA information, a widely used non-GAAP
financial measurement, as a performance measure to assist in analyzing the
Company's operations and in comparing the Company to its competitors. The
Company provides other non-GAAP financial measurements, such as adjusted EBITDA,
that adjust for certain items outside of the ordinary course of business in
order to assist in comparing the Company's current operating performance to its
historical performance. These adjustments typically reflect non-recurring items
but sometimes reflect items, such as dispositions of assets and restructuring
charges that are not technically non-recurring but are outside of the ordinary
course of operations. Investors should note that such measures may not be
comparable to similarly titled measures used by other companies, and investors
are encouraged to use this information only in connection with the information
contained in the Company's GAAP financial statements.

Certain statements made in this press release may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Such forward-looking statements are based on 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 materially differ
from any future results or performance expressed or implied by such
forward-looking statements. These statements involve risks and uncertainties,
including, without limitation, risks and uncertainties regarding current and
future reimbursement rates, as well as reimbursement reductions and the
Company's ability to mitigate the impact of the reductions. These risks and
uncertainties are in addition to risks, uncertainties, and other factors
detailed from time to time in the Company's filings with the Securities and
Exchange Commission. The Company cautions investors that any forward-looking
statements made by the Company are not necessarily indicative of future
performance. The Company is not responsible for updating the information
contained in this press release beyond the published date, or for changes made
to this document by wire services or Internet services.



AMERICAN HOMEPATIENT, INC.                                       SCHEDULE A
SUMMARY FINANCIAL DATA
(In thousands, except per share data)

THREE MONTHS ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, ----------------------- ------------------------- 2005 2004 2005 2004 -------- -------- --------- --------- (UNAUDITED) (UNAUDITED) Revenues, net $ 83,606 $ 84,236 $ 328,418 $ 335,823 Cost of sales and related services 20,799 18,015 79,441 71,934 Cost of rentals and other revenues, including rental equipment depreciation 10,106 9,695 39,879 38,779 Operating expenses 39,943 39,372 158,851 167,285 Bad debt expense 2,360 1,484 9,438 10,671 General and administrative expenses 4,265 3,887 16,749 16,597 Depreciation, excluding rental equipment, and amortization 1,206 989 3,645 3,423 Interest expense, net 4,234 4,396 17,141 18,290 Other income, net 52 (222) (365) (344) Earnings from unconsolidated joint ventures (1,192) (1,494) (4,816) (4,751) -------- -------- --------- --------- INCOME FROM OPERATIONS BEFORE REORGANIZATION ITEMS AND INCOME TAXES 1,833 8,114 8,455 13,939 Reorganization items 51 138 384 658 -------- -------- --------- --------- INCOME FROM OPERATIONS BEFORE INCOME TAXES 1,782 7,976 8,071 13,281 Provision for income taxes 57 (250) 327 50 -------- -------- --------- --------- NET INCOME $ 1,725 $ 8,226 $ 7,744 $ 13,231 ======== ======== ========= ========= Basic income per common share $ 0.10 $ 0.49 $ 0.45 $ 0.80 Diluted income per common share $ 0.10 $ 0.48 $ 0.43 $ 0.78 ---------------------------------------------------------------------------------------------------------------------------
DECEMBER 31, DECEMBER 31, 2005 2004 ------------ ------------ (UNAUDITED) Cash and cash equivalents $ 4,444 $ 5,772 Restricted cash 650 650 Net patient receivables 55,222 50,851 Other receivables 1,242 1,666 --------- --------- Total receivables 56,464 52,517 Other current assets 22,871 22,308 --------- --------- Total current assets 84,429 81,247 Property and equipment, net 56,981 58,005 Goodwill 121,834 121,834 Other assets 24,390 21,978 --------- --------- TOTAL ASSETS $ 287,634 $ 283,064 ========= ========= Accounts payable $ 18,110 $ 17,842 Current portion of long-term debt and capital leases 908 885 Other current liabilities 30,276 30,951 --------- --------- Total current liabilities 49,294 49,678 Long-term debt and capital leases, less current portion 250,111 251,033 Other noncurrent liabilities 50 2,548 --------- --------- Total liabilities 299,455 303,259 Minority interest 635 534 Total shareholders' deficit (12,456) (20,729) --------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ 287,634 $ 283,064 ========= =========
AMERICAN HOMEPATIENT, INC SCHEDULE B RECONCILIATION OF NON-GAAP FINANCIAL MEASUREMENTS TO GAAP FINANCIAL STATEMENTS (In thousands)
THREE MONTHS ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, 2005 2004 2005 2004 ------- -------- ------- ------- (UNAUDITED) (UNAUDITED) Net income $ 1,725 $ 8,226 $ 7,744 $13,231 Add: Provision for income taxes 57 (250) 327 50 Interest expense, net 4,234 4,396 17,141 18,290 Rental equipment depreciation 6,135 5,902 24,307 23,502 Other depreciation and amortization 1,206 989 3,645 3,423 ------- -------- ------- ------- Earnings before interest, taxes, depreciation, and amortization (EBITDA) 13,357 19,263 53,164 58,496 Add: Reorganization items 51 138 384 658 ------- -------- ------- ------- Adjusted EBITDA (EBITDA excluding reorganization items) $13,408 $ 19,401 $53,548 $59,154 ======= ======== ======= =======

The following information was filed by American Homepatient Inc on Wednesday, March 15, 2006 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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