<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the quarterly period ended June 30, 1995.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the transition period.
COMMISSION FILE NUMBER: 1-10989
VENCOR, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 61-1055020
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3300 PROVIDIAN CENTER
400 WEST MARKET STREET
LOUISVILLE, KENTUCKY 40202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (502) 569-7300
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
The number of shares outstanding of the Registrant's common stock, $.25 par
value, at July 31, 1995 was 28,365,117.
<PAGE> 2
VENCOR, INC.
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PAGE
NUMBER
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets at
June 30, 1995 and December 31, 1994 3
Condensed Consolidated Statements of Operations
for the three months ended June 30, 1995 and 1994 and 4
the six months ended June 30, 1995 and 1994
Condensed Consolidated Statements of Cash Flows for the
six months ended June 30, 1995 and 1994 5
Notes to Condensed Consolidated Financial Statements
-- June 30, 1995 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1
VENCOR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30 December 31
1995 1994
(Unaudited) (Note)
------------- ------------
(In thousands)
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 3,496 $ 3,055
Accounts receivable, less allowance for doubtful
accounts of $2,912,000 in 1995 and $1,478,000 in 1994 120,091 98,246
Inventories 6,952 4,751
Other current assets 23,021 19,572
-------- --------
Total Current Assets 153,560 125,624
Property and equipment, less accumulated depreciation of
$50,153,000 in 1995 and $40,074,000 in 1994 295,205 239,820
Investments available for acquistions and general corporate purposes 20,469
Other Assets 26,554 24,928
-------- --------
Total Assets $495,788 $390,372
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $23,625 $19,536
Accrued compensation and benefits 24,101 19,353
Income taxes payable 7,682 7,199
Accrued interest 1,725 1,725
Current portion of long-term debt 836 904
-------- --------
Total Current Liabilities 57,969 48,717
Deferred Credits and Other Liabilities 18,116 16,029
Long-Term Debt
6% Convertible Subordinated Notes due 2002 114,992 115,000
Note payable - Revolving line of credit 28,500 26,000
Other long-term debt, net of current portion 793 899
-------- --------
Total Long-Term Debt 144,285 141,899
Shareholders' Equity
Preferred Stock, par value $1.00 per share; authorized
1,000,000 in 1995 and 1994; none issued and outstanding
Common Stock, par value $.25 per share; authorized
60,000,000 in 1995 and 1994; issued
30,010,146 in 1995 and 27,739,246 in 1994 7,502 6,934
Paid-in capital 181,556 116,806
Retained Earnings 107,578 87,617
-------- --------
296,636 211,357
Less cost of Common Stock held in treasury (1,661,650
shares in 1995 and 2,173,799 in 1994) 21,218 27,630
-------- --------
Total Shareholders' Equity 275,418 183,727
-------- --------
Total Liabilities and Shareholders' Equity $495,788 $390,372
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
Note: The balance sheet at December 31, 1994 has been derived
from the audited financial statements at that date.
3
<PAGE> 4
VENCOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands except net income per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
---------------------- ----------------------
1995 1994 1995 1994
---------- --------- --------- -----------
<S> <C> <C> <C> <C>
NET REVENUES
Net patient revenues $139,391 $97,436 $259,005 $183,741
Other revenues 1,272 1,098 2,089 1,756
-------- ------- -------- --------
Total Net Revenues 140,663 98,534 261,094 185,497
EXPENSES
Hospital operating expenses 107,161 73,574 198,412 140,106
Corporate general and
administrative expenses 7,398 5,686 13,731 10,383
Depreciation and amortization 6,197 5,443 11,898 9,531
-------- ------- -------- --------
Total operating expenses 120,756 84,703 224,041 160,020
Interest 2,202 1,700 4,349 3,473
-------- ------- -------- --------
Total Expenses 122,958 86,403 228,390 163,493
-------- ------- -------- --------
Income Before Income Taxes 17,705 12,131 32,704 22,004
Income taxes 6,892 4,849 12,743 8,802
-------- ------- -------- --------
Net Income $ 10,813 $ 7,282 $ 19,961 $ 13,202
======== ======= ======== ========
Net Income per share
Primary $ 0.37 $ 0.28 $ 0.71 $ 0.51
======== ======= ======== ========
Fully diluted $ 0.35 $ 0.26 $ 0.66 $ 0.49
======== ======= ======== ========
Shares used in per share calculation
Primary 28,871 25,784 28,083 25,719
======== ======= ======== ========
Fully diluted 33,294 30,207 32,506 30,142
======== ======= ======== ========
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 5
VENCOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30
------------------------
1995 1994
-------- ---------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $19,961 $13,202
Adjustments to reconcile net income to net
cash provided from operating activities:
Other adjustments to net income 14,781 12,573
Changes in operating assets and liabilities (13,158) (19,435)
------- -------
Net Cash Provided by Operating Activities 21,584 6,340
INVESTING ACTIVITIES
Property and equipment additions (39,463) (24,355)
Net assets of acquired facilities (29,006) (18,066)
Net change in investments available for
acquistions and general corporate purposes (20,469) 14,961
Net change in short-term investments (3,081)
Other assets (1,312) (1,953)
------- -------
Net Cash Used in Investing Activities (90,250) (32,494)
FINANCING ACTIVITIES
Borrowings on long term debt 42,134 13,000
Payments on long-term debt (39,973) (206)
Net proceeds from common stock offering 66,494
Net proceeds from shareholders' equity transactions 452 168
------- -------
Net Cash Provided by Financing Activities 69,107 12,962
------- -------
Increase (Decrease) in Cash 441 (13,192)
Cash and Cash Equivalents at Beginning of Year 3,055 16,011
------- -------
Cash and Cash Equivalents at End of Period $ 3,496 $ 2,819
======= =======
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE> 6
VENCOR, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 1995
Note 1 - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the three and
six month periods ended June 30, 1995 are not necessarily indicative of the
results that may be expected for the year ended December 31, 1995. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's annual report on Form 10-K for the year ended
December 31, 1994.
Note 2 - Stock Split
The Company's Board of Directors approved a 3-for-2 stock split on
September 29, 1994. The new shares were distributed on October 25, 1994 to
stockholders of record at the close of business on October 10, 1994.
Retroactive recognition has been given for all share and per share amounts in
the accompanying financial statements.
Note 3 - Professional Liability Risks
The Company insures for medical malpractice losses through claims-made
policies, and provides an estimated reserve for deductibles for outstanding
claims and incurred but not reported claims (IBNR). In the opinion of
management, insurance coverage and estimated reserves for outstanding and IBNR
claims are adequate to cover significant losses, if any. Should the
claims-made policies not be renewed or replaced with equivalent insurance,
claims based on occurrences during their terms but reported subsequently will
be uninsured. The Company intends to continue to carry such insurance.
Note 4 - Long-Term Debt
In January 1995, the Company's revolving credit agreement was amended
to increase the principal amount available from $100,000,000 to $200,000,000.
6
<PAGE> 7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 1995 (Continued)
Note 5 - Pro Forma Information
During the first six months of 1995, the Company purchased five
hospitals and certain other ancillary healthcare entities (aggregate net cost
of $29 million), the most significant of which was a hospital in Arlington,
Virginia ("Arlington") purchased on May 1, 1995 for approximately $8 million.
The following unaudited pro forma information reflects the combined operating
results of the Company and Arlington as if the acquisition had occurred at the
beginning of the periods indicated (dollars in thousands, except per share
data):
<TABLE>
<CAPTION>
Six Months Ended June 30
1995 1994
---- ----
<S> <C> <C>
Net revenues $272,309 $203,946
Net income 20,857 14,526
Net income per common share:
Primary .74 .56
Fully diluted .68 .53
</TABLE>
Note 6 - Proposed Merger Transaction
On April 23, 1995, the Company entered into a definitive agreement to
merge with the Hillhaven Corporation ("Hillhaven"). Subject to the terms and
conditions of the agreement, Hillhaven's common stockholders will receive for
each share of Hillhaven common stock a number (the "Conversion Number") of
shares of Company common stock (and associated preferred stock purchase rights)
determined by dividing $32.25 by the average closing price on the New York
Stock Exchange of Company common stock for the ten consecutive trading days
ending with the second trading day immediately preceding the effective time of
the transaction (the "Average Company Price"), provided that the Conversion
Number will not be less than 0.768 or more than 0.977. In the event that the
Conversion Number multiplied by the Average Company Price is less than $31.00,
the Company may elect to increase the Conversion Number to the amount required
to arrive at $31.00 or, if the Company does not do so, Hillhaven may terminate
the merger agreement.
The transaction is expected to be tax-free to Vencor and Hillhaven
common stockholders and treated as a pooling of interests for accounting
purposes. The merger agreement is subject to certain regulatory approvals, as
well as approval by the stockholders of each company. In connection therewith,
the Company and Hillhaven are preparing proxy materials to be distributed to
stockholders of both companies as soon as practicable.
Conditioned upon and concurrent with the consummation of the merger,
the Company expects to enter into a senior credit facility (the "Credit
Facility") aggregating $1 billion, the term of which will approximate five and
one-half years. The Credit Facility will, among other things, (i) replace
prior revolving credit agreements associated with both the Company and
Hillhaven, (ii) provide for the liquidation of outstanding Hillhaven preferred
stock in accordance with the terms of the merger agreement and (iii) support
anticipated refinancings of certain Hillhaven long-term debt. The Company
anticipates that after-tax losses incurred in connection with such refinancing
activities could reduce net income of the combined entity by approximately $18
million.
The Company and Hillhaven expect to incur certain expenses in
connection with the proposed merger, including costs associated with financial
advisory, legal and accounting services, printing and distribution of proxy
materials and accelerated vesting of certain employee benefits. These costs
are expected to approximate $50 million before income taxes.
7
<PAGE> 8
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PROPOSED MERGER TRANSACTION
As discussed in Note 6 of the Notes to Condensed Consolidated
Financial Statements, the Company entered into a definitive agreement
on April 23, 1995 to merge with Hillhaven in a tax-free
stock-for-stock transaction to be accounted for as a pooling of
interests.
Unless otherwise stated, the following discussion and analysis
is based on the historical condensed consolidated financial statements
of the Company and does not include the effects of the proposed
Hillhaven merger.
RESULTS OF OPERATIONS
Three Months Ended June 30, 1995 Compared to June 30, 1994
Net revenues for the three months ended June 30, 1995 increased
to $140,663,000 from $98,534,000, an increase of 42.8%. Net patient
revenues increased to $139,391,000 from $97,436,000. Of the
$41,955,000 increase in net patient revenues, $12,496,000 was
attributable to a higher patient census and payment rates at the
hospitals that were in operation during both periods and $15,515,000
was attributable to increased net revenues from expansion of the
Company's Vencare program, with the remainder of the increase related
to hospitals that have opened since June 30, 1994.
Patient days for the three months ended June 30, 1995 increased
to 124,686 from 101,546 for the three months ended June 30, 1994, an
increase of 22.8%. Of the 23,140 increase in patient days, 58.6% was
attributable to hospitals added since the second quarter of last year.
The number of hospitals in operation increased from 31 at June 30,
1994 to 36 at June 30, 1995.
Net revenues from non-government sources (e.g., commercial
insurance companies, HMOs, PPOs, contract services) increased 52.0%
from $38,961,000 in 1994 to $59,208,000 in 1995. Non-government net
revenues as a percentage of total net revenues increased from 39.5% to
42.1%. This increase was primarily attributable to the increase in
revenues derived from expansion of the Company's Vencare program.
Net revenues from the Company's Vencare program, which includes
contract, subacute and other respiratory care services at nursing
homes, management of hospital respiratory therapy departments and
hospice services, increased to $24,477,000, or 17.6% of net patient
revenues for the three months ended June 30, 1995 compared to
$8,984,000, or 9.2% of net patient revenues for the three months ended
June 30, 1994.
Total expenses for the period increased from $86,403,000 to
$122,958,000, an increase of 42.3%. Of the $36,555,000 increase,
$11,528,000, or 31.5%, was due to higher operating expenses associated
with increased patient census at those hospitals that were in
operation during both periods. The remaining increase in expenses was
primarily due to operating expenses at new facilities as well as costs
related to the Company's Vencare program.
8
<PAGE> 9
Three Months Ended June 30, 1995 Compared to June 30, 1994 (Continued)
Corporate general and administrative expenses increased 30.1%
from $5,686,000 to $7,398,000. For 1994 and 1995, these expenses were
5.8% and 5.3% of net revenues, respectively.
Depreciation and amortization increased 13.9% from $5,443,000 in
1994 to $6,197,000 in 1995, as the Company purchased and renovated
additional hospital facilities. Net depreciable assets were
$212,430,000 and $157,546,000 at June 30, 1995 and 1994, respectively.
The Company's interest expense of $2,202,000 in 1995 and
$1,700,000 in 1994 related primarily to its 6% convertible notes. The
increase in interest expense in 1995 was primarily due to increased
borrowings under the Company's revolving credit agreement.
Six Months Ended June 30, 1995 Compared to June 30, 1994
Net revenues for the six months ended June 30, 1995 increased to
$261,094,000 from $185,497,000, an increase of 40.8%. Net patient
revenues increased to $259,005,000 from $183,741,000. Of the
$75,264,000 increase in net patient revenues, $28,731,000 was
attributable to a higher patient census and payment rates at the
hospitals that were in operation during both periods and $29,370,000
was attributable to increased net revenues from expansion of the
Company's Vencare program, with the remainder of the increase related
to hospitals that have opened since June 30, 1994.
Patient days for the six months ended June 30, 1995 increased to
237,851 from 201,670 for the six months ended June 30, 1994, an
increase of 17.9%. Of the 36,181 increase in patient days, 53.8% was
attributable to a higher census at those hospitals in operation during
both periods. The number of hospitals in operation increased from 31
at June 30, 1994 to 36 at June 30, 1995.
Net revenues from non-government sources (e.g., commercial
insurance companies, HMOs, PPOs, contract services) increased 53.2%
from $70,467,000 in 1994 to $107,952,000 in 1995. Non-government net
revenues as a percentage of total net revenues increased from 38.0% to
41.3%. This increase was primarily attributable to the increase in
revenues derived from expansion of the Company's Vencare program.
Net revenues from the Company's Vencare program, which includes
contract, subacute and other respiratory care services at nursing
homes, management of hospital respiratory therapy departments and
hospice services, increased to $43,763,000, or 16.8% of net patient
revenues for the six months ended June 30, 1995 compared to
$14,415,000, or 7.8% of net patient revenues for the six months ended
June 30, 1994.
Total expenses for the period increased from $163,493,000 to
$228,390,000, an increase of 39.7%. Of the $64,897,000 increase,
$28,717,000, or 44.3%, was due to higher operating expenses associated
with higher patient census at those hospitals that were in operation
during both periods. The remaining increase in expenses was due
primarily to operating expenses at new facilities as well as costs
related to the Company's Vencare program.
9
<PAGE> 10
Six Months Ended June 30, 1995 Compared to June 30, 1994 (Continued)
Corporate general and administrative expenses increased 32.2%
from $10,383,000 to $13,731,000. For 1994 and 1995, these expenses
were 5.6% and 5.3% of net revenues, respectively.
Depreciation and amortization increased 24.8% from $9,531,000 in
1994 to $11,898,000 in 1995, as the Company purchased and renovated
additional hospital facilities. Of the $2,367,000 increase in
depreciation and amortization, $1,010,000 was attributable to those
hospitals that were not in operation at June 30, 1994.
The Company's interest expense of $4,349,000 in 1995 and
$3,473,000 in 1994 related primarily to its 6% convertible notes. The
increase in interest expense in 1995 was primarily due to increased
borrowings under the Company's revolving credit agreement.
LIQUIDITY AND CAPITAL RESOURCES
Six Months Ended June 30, 1995 Compared to June 30, 1994
Historically, the Company has financed its growth and operations
principally through the issuance of equity and debt securities, bank
borrowings and cash flow from operations.
The Company expends capital for the acquisition and renovation
of new hospital facilities, property and equipment additions and the
acquisition of businesses. During the year ended December 31, 1994,
the Company expended capital of approximately $100,000,000 for these
purposes. During the six months ending June 30, 1995, such capital
expenditures totaled $68 million. The Company expects to expend a
similar amount of capital for these purposes for the remainder of the
year.
In January 1995, the Company's revolving credit agreement was
amended to increase the principal amount available from $100,000,000
to $200,000,000. At June 30, 1995, the Company had an outstanding
balance of $28,500,000 under this line of credit.
On February 22, 1995, the Company sold 2,200,000 shares of
common stock in a public offering. The net proceeds totaled
$66,494,000, approximately $33 million of which were used to reduce
the Company's outstanding indebtedness under its revolving credit
agreement. The balance of the net proceeds has been invested pending
its use for additional capital expenditures.
Working capital was $95,591,000 and $74,133,000 as of June 30,
1995 and June 30, 1994, respectively. Cash, cash equivalents and
short-term investments totaled $3,496,000 and $6,519,000 at June 30,
1995, and June 30, 1994, respectively.
The Company's principal source of liquidity, in addition to its
cash and credit resources, is payments received on accounts
receivable. Net patient accounts receivable increased 38.7% from
$86,605,000 at June 30, 1994 to $120,091,000 at June 30, 1995.
Accounts receivable days outstanding were 79 at June 30, 1995 and 81
at June 30, 1994.
10
<PAGE> 11
Six Months Ended June 30, 1995 Compared to June 30, 1994 (Continued)
The Company intends to continue to expand its hospital
operations by purchasing or leasing approximately 10 to 12 additional
hospitals over the next two to three years and converting them into
intensive care hospitals. The Company also expects to enter into at
least 200 additional respiratory and subacute care services contracts
during each of the next two to three years. The Company expects to
finance its liquidity, capital expenditure and expansion programs using
the proceeds of its February 1995 equity offering, as well as funds
generated from internal operations, funds available under its
revolving credit agreement or additional borrowings.
Net cash provided by operating activities was $21,584,000 in the
first half of 1995 compared to $6,340,000 in the same period of 1994.
Net income increased 51.2% to $19,961,000 for the six months ended
June 30, 1995 compared to $13,202,000 in 1994.
Net cash used in investing activities was $90,250,000 in the
first half of 1995 compared to $32,494,000 in the same period of 1994.
Cash used in investing activities in 1994 and 1995 was primarily
attributable to the purchase of additional hospital facilities as well
as renovation costs of newly acquired and existing hospital
facilities. Net cash used in investing activities in 1995 also
includes the investment of $20 million in short-term obligations as a
result of the Company's February 1995 stock offering.
Net cash provided by financing activities for the six months
ended June 30, 1995 was $69,107,000 compared to $12,962,000 for the
same period last year. Cash provided by financing activities in 1995
includes the proceeds from the Company's February 1995 common stock
offering of $66,494,000.
OTHER INFORMATION
In connection with the proposed merger with Hillhaven, the
Company will assume Hillhaven's outstanding long-term debt
(aggregating approximately $660 million at June 30, 1995) and expects
to enter into a $1 billion senior credit facility to, among other
things, (i) replace prior revolving credit agreements associated with
both the Company and Hillhaven, (ii) liquidate outstanding Hillhaven
preferred stock in accordance with the merger agreement and (iii)
refinance certain Hillhaven long-term debt. The Company anticipates
that after-tax losses incurred in connection with such refinancing
activities could reduce net income of the combined entity by
approximately $18 million.
The Company and Hillhaven expect to incur certain expenses in
connection with the proposed merger, including costs associated with
financial advisory, legal and accounting services, printing and
distribution of proxy materials and accelerated vesting of certain
employee benefits. These costs are expected to approximate $50
million before income taxes.
11
<PAGE> 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings None
Item 2. Changes in Securities None
Item 3. Defaults Upon Senior Securities None
Item 4. Submission of Matters to a Vote of Security Holders
The Company's Annual Meeting of Stockholders was held on May 9,
1995. At the meeting, stockholders elected a Board of eight
directors pursuant to the following votes: William C. Ballard,
Jr.: 24,735,658 votes in favor, 340,414 shares withheld; Michael
R. Barr: 24,779,398 votes in favor, 296,674 shares withheld;
Donna R. Ecton: 24,808,343 votes in favor, 267,729 shares
withheld; Greg D. Hudson: 24,810,083 votes in favor, 265,989
shares withheld; William H. Lomicka: 24,810,293 votes in favor,
265,779 shares withheld; W. Bruce Lunsford: 24,779,101 votes in
favor, 296,971 shares withheld; W. Earl Reed, III: 24,779,248
votes in favor, 296,824 shares withheld; R. Gene Smith:
24,779,148 votes in favor, 296,924 shares withheld.
Item 5. Other Information None
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are included herein:
(11) Statement Re Computation of Earnings Per Share
(27) Financial Data Schedule (included only in filings
under the Electronic Data, Gathering, Analysis, and
Retrieval System for SEC use only.)
(b) Reports on Form 8-K
On April 23, 1995, the Company filed a report on Form
8-K in connection with the announcement of a definitive
agreement to merge with Hillhaven.
On May 5, 1995, the Company filed a report on Form 8-K
which included a copy of the definitive agreement to merge
with Hillhaven.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VENCOR, INC.
Date August 14, 1995 By /s/ W. Bruce Lunsford, Esq.
----------------------------------- ---------------------------
W. Bruce Lunsford, Esq.
Chairman of the Board,
President and Chief
Executive Officer
Date August 14, 1995 By /s/ W. Earl Reed, III
----------------------------------- ----------------------------
W. Earl Reed, III
Vice President, Finance and
Development (Principal
Financial and Accounting
Officer)
13
<PAGE> 1
EXHIBIT 11
VENCOR, INC.
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
1995 1994 1995 1994
-------- --------- ---------- -------
<S> <C> <C> <C> <C>
PRIMARY:
Weighted average of shares outstanding 27,966 24,926 27,184 24,861
Incremental shares resulting from dilutive effect of
stock options 905 672 899 672
Share adjustment for contingent liability - 186 - 186
------- ------- ------- -------
Totals 28,871 25,784 28,083 25,719
======= ======= ======= =======
Net income $10,813 $7,282 $19,961 $13,202
Amortization relating to contingent liability - (108) - (179)
------- ------- ------- -------
Adjusted net income $10,813 $7,174 $19,961 $13,023
======= ======= ======= =======
Earnings per share $ 0.37 $ 0.28 $ 0.71 $ 0.51
======= ======= ======= =======
FULLY DILUTED:
Weighted average of shares outstanding 27,966 24,926 27,184 24,861
Incremental shares resulting from dilutive effect of
stock options 905 672 899 672
Share adjustment for contingent liability - 186 - 186
Equivalent shares related to 6% convertible notes 4,423 4,423 4,423 4,423
------- ------- ------- -------
Totals 33,294 30,207 32,506 30,142
======= ======= ======= =======
Net income $10,813 $7,282 $19,961 $13,202
Amortization relating to contingent liability - (108) - (179)
Interest related to 6% convertible notes, net of
reimbursement and income tax effect 686 698 1,365 1,750
------- ------- ------- -------
Adjusted net income $11,499 $7,872 $21,326 $14,773
======= ======= ======= =======
Earnings per share $ 0.35 $ 0.26 $ 0.66 $ 0.49
======= ======= ======= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AT JUNE 30, 1995 (UNAUDITED) AND THE
CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 30,
1995 (UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 3,496
<SECURITIES> 0
<RECEIVABLES> 123,003
<ALLOWANCES> 2,912
<INVENTORY> 6,952
<CURRENT-ASSETS> 153,560
<PP&E> 345,358
<DEPRECIATION> 50,153
<TOTAL-ASSETS> 495,788
<CURRENT-LIABILITIES> 57,969
<BONDS> 144,285
<COMMON> 7,502
0
0
<OTHER-SE> 267,916
<TOTAL-LIABILITY-AND-EQUITY> 495,788
<SALES> 259,005
<TOTAL-REVENUES> 261,094
<CGS> 0
<TOTAL-COSTS> 198,412
<OTHER-EXPENSES> 29,978
<LOSS-PROVISION> 442
<INTEREST-EXPENSE> 4,349
<INCOME-PRETAX> 32,704
<INCOME-TAX> 12,743
<INCOME-CONTINUING> 19,961
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,961
<EPS-PRIMARY> .71
<EPS-DILUTED> .66
</TABLE>
