Sunday, June 8, 2014

Gentiva Wants to Dine, Not be Eaten


Recent investor presentations reveal Gentiva is ready to buy other companies in the post-acute care space while fighting off a hostile takeover by Kindred Healthcare.  Also, Chief Financial Officer Eric Slusser confessed Gentiva's leverage ration increased with the Harden buyout, rather than deleveraging.  That's not the first strategy that went other than predicted.  

Take revenue. Gentiva announced the Harden deal to great fanfare:

On a pro-forma basis the company should be able to generate revenues between $2.1 and $2.2 billion, while adjusted EBITDA should come in between $210 and $220 million, excluding share-based compensation.

On March 4, 2014 the company guided:

We expect 2014 revenues of $1.9 billion to $2.1 billion, an adjusted income attributable to Gentiva shareholders to be in the range of $0.85 to $1.15 per diluted share.
Gentiva closed nearly 100 sites after buying Harden's hospice, home health and community care operations.  How did that impact revenue projections? 

The Company reaffirmed its revenue guidance recently and added EBDITA guidance for the first time:

Gentiva leaders provided guidance on Adjusted EBITDA for the fiscal year 2014 which, based on its current outlook, is expected to be in the range of $177 million to $195 million.

CFO Slusser danced around Gentiva's leverage ratio rising from 5.4 to 5.8 times in Q1. Leaders called the Harden acquisition a means to delever.

Strategic Rationale--Improved capacity to de-lever: strong combined cash flows accelerates the ability to reduce leverage ratio over time

It's Gentiva, where words mean their dictionary opposite.  Integration means disintegration. 

There are two more opportunities to hear Gentiva's senior leaders tell their story to the investment community.

Morgan Stanley Leveraged Finance Conference
Wednesday, June 11, 2014
3:15 p.m. CT (4:15 p.m. ET)
New Orleans, LA

Wells Fargo Securities Healthcare Conference
Tuesday, June 17, 2014
9:25 a.m. ET
Boston, MA

Summertime is around the corner and the big boys are hungry for another company to digest.  How are things at Generic?

Anonymous (from Gentiva)

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