Kindred Healthcare, Inc. (NYSE: KND) turned in a better-than-expected third quarter, beating analysts’ estimates for revenue and announcing ongoing partnerships with its soon-to-be-sold portfolio of skilled nursing assets.
The Louisville, Ky.-based operator has sold 68 of the 89 SNFs involved in its exit from the space, in a deal initially announced back in June, with the remaining facilities expected to be sold off by the end of the year.
That megadeal with BM Eagle Holdings, a joint venture run by affiliates of the New York City-based alternative asset management firm BlueMountain Capital Management, also included seven assisted living facilities; four have since been sold, Kindred CEO Benjamin Breier said in the company’s quarterly earnings release.
But while Kindred will no longer directly operate any SNFs by 2018 if all goes to plan, the company will still have extensive partnerships with the new operators: Kindred’s contract therapy arm, RehabCare, has reached agreements to provide services at 45 of the sold locations, Breier said in the release, with more expected as the sales continue.
RehabCare offers physical, occupational, and speech-language rehab services in a variety of settings, including SNFs, assisted living facilities, and outpatient providers.
“We continue to believe that the sale of our skilled nursing facility business will significantly enhance shareholder value, enable us to sharpen our focus on higher-margin and faster-growing businesses, and further advance our efforts to transform Kindred,” Breier said in the statement.
Kindred took in $1.48 billion in revenues during the third quarter, down 5.1% from last year but exceeding analysts’ expectations by $20 million, according to SeekingAlpha. That represents a loss of $18 million for the quarter, or a diluted loss per share of $0.11 — a nine-cent improvement over expectations.
“We made good progress during the quarter on each of our ongoing key initiatives, including our plan to fully exit the skilled nursing facility business and our continuing efforts to mitigate the impact of long-term acute care patient criteria,” Breier said.
He also pointed to the recent natural disasters when framing the company’s better-than-expected results, noting that Kindred took a $16 million hit from Hurricanes Harvey and Irma.
“Thanks to the talented and dedicated teammates across our organization, Kindred delivered solid operating results,” Breier said.
KND closed Monday’s trading up $0.10, or 1.69%, to finish at an even $6 per share.
Written by Alex Spanko