American Renal Associates Holdings, Inc. (NYSE:ARA) Files An 8-K Regulation FD DisclosureItem 7.01
Regulation FD Disclosure.
American Renal Associates Holdings, Inc. (NYSE:ARA) Files An 8-K Regulation FD Disclosure
Updated 2018 Outlook for Adjusted EBITDA Less Noncontrolling Interests (NCI)
The Company today also updated its financial guidance, and now expects 2018 Adjusted EBITDA-NCI to be in a range of $105 million to $111 million compared with its prior guidance range of $110 million to $116 million. ARA’s updated outlook assumes the establishment of a network agreement with United effective August 1, 2018, and the Company confirmed that all other key assumptions contemplated in its prior guidance range remain intact. The Company expects to recognize the present value of the settlement in its financial statements for the second quarter ending June 30, 2018. The resulting charge in the second quarter ending June 30, 2018 will not affect the Company’s expected 2018 Adjusted EBITDA-NCI guidance because the expenses relating to the United litigation are added back in calculating Adjusted EBITDA-NCI. The Company’s management will discuss its updated outlook in greater detail during the Company’s second quarter 2018 earnings conference call, which is scheduled for August 8, 2018 at 9:00 a.m. ET.
The Company is not providing a quantitative reconciliation of its Non-GAAP outlook to the corresponding GAAP information because the GAAP measures that it excluded from its Non-GAAP outlook are not available without unreasonable effort on a forward-looking basis due to their unpredictability, high variability, complexity and low visibility. These excluded GAAP measures include noncontrolling interests, interest expense, income taxes and other charges. The Company expects the variability of these charges to have a potentially unpredictable, and potentially significant, impact on its future GAAP financial results.
Please see “Forward-Looking Statements” below for a discussion of certain risks to the Company’s outlook.
Press Release
On July 9, 2018, the Company and United issued a joint press release announcing the resolution of the Company’s pending litigations with United. A copy of the press release is furnished with this report as Exhibit 99.1 and is incorporated by reference into this item.
As provided in General Instruction B.2 of Form 8-K, the information in this Item 7.01 and the exhibit contained in this report shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section, as amended, nor shall this item or the exhibit be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements, which have been included in reliance of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, involve risks and uncertainties and assumptions relating to our operations, financial condition, business, prospects, growth strategy and liquidity, which may cause our actual results to differ materially from those projected by such forward-looking statements, and the Company cannot give assurances that such statements will prove to be correct. You can identify forward-looking statements because they do not relate strictly to historical or current facts. These statements may include words such as “aim,” “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “outlook,” “potential,” “project,” “projection,” “plan,” “intend,” “seek,” “may,” “could,” “would,” “will,” “should,” “can,” “can have,” “likely,” the negatives thereof and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events.
The forward-looking statements appear in a number of places throughout this Current Report on Form 8-K and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate. All forward-looking statements are subject to risks and uncertainties, including but not limited to those risks and uncertainties described in “Risk Factors” and “Special Note Regarding Forward-Looking Statements” in our Annual Report on Form 10-K for the year ended December 31, 2017, as updated by our reports on Form 10-Q filed or to be filed with the Securities and Exchange Commission (“SEC”) that may cause actual results to differ materially from those that we expected.
Some of the factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include, among others, the following:
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continuing decline in the number of patients with commercial insurance, including as a result of changes to the healthcare exchanges or changes in regulations or enforcement of regulations regarding the healthcare exchanges and challenges from commercial payors or any regulatory or other changes leading to changes in the ability of patients with commercial insurance coverage to receive charitable premium support; |
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decline in commercial payor reimbursement rates; |
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the ultimate resolution of the Centers for Medicare and Medicaid Services (“CMS”) Interim Final Rule published December 14, 2016 related to dialysis facilities Conditions for Coverage (CMS 3337-IFC), including an issuance of a different but related Final Rule; |
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reduction of government-based payor reimbursement rates or insufficient rate increases or adjustments that do not cover all of our operating costs; |
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our ability to successfully develop de novo clinics, acquire existing clinics and attract new physician partners; |
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our ability to compete effectively in the dialysis services industry; |
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the performance of our joint venture subsidiaries and their ability to make distributions to us; |
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changes to the Medicare end-stage renal disease (“ESRD”) program that could affect reimbursement rates and evaluation criteria, as well as changes in Medicaid or other non-Medicare government programs or payment rates, including the ESRD prospective payment rate system final rule for 2018 issued on October 27, 2017; |
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federal or state healthcare laws that could adversely affect us; |
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our ability to comply with all of the complex federal, state and local government regulations that apply to our business, including those in connection with federal and state anti-kickback laws and state laws prohibiting the corporate practice of medicine or fee-splitting; |
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heightened federal and state investigations and enforcement efforts; |
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the impact of the litigation by affiliates of United and the resolution thereof, the Department of Justice inquiry, securities and derivative litigation and related matters; |
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the ability of the Company and United to negotiate a final settlement agreement and a national network agreement; |
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changes in the availability and cost of erythropoietin-stimulating agents and other pharmaceuticals used in our business; |
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development of new technologies that could decrease the need for dialysis services or decrease our in-center patient population; |
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our ability to timely and accurately bill for our services and meet payor billing requirements; |
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claims and losses relating to malpractice, professional liability and other matters; the sufficiency of our insurance coverage for those claims and rising insurance costs; and any negative publicity or reputational damage arising from such matters; |
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loss of any members of our senior management; |
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damage to our reputation or our brand and our ability to maintain brand recognition; |
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our ability to maintain relationships with our medical directors and renew our medical director agreements; |
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shortages of qualified skilled clinical personnel, or higher than normal turnover rates; |
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competition and consolidation in the dialysis services industry; |
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deteriorations in economic conditions, particularly in states where we operate a large number of clinics, or disruptions in the financial markets; |
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the participation of our physician partners in material strategic and operating decisions and our ability to favorably resolve any disputes; |
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our ability to honor obligations under the joint venture operating agreements with our physician partners were they to exercise certain put rights and other rights; |
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unauthorized disclosure of personally identifiable, protected health or other sensitive or confidential information; |
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our ability to meet our obligations and comply with restrictions under our substantial level of indebtedness; and |
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the ability of our principal stockholder, whose interests may conflict with yours, to strongly influence or effectively control our corporate decisions. |
The forward-looking statements made in this Current Report on Form 8-K are made only as of the date hereof. Except as required by law, we undertake no obligation to update any forward-looking statement, whether as a result of new information or otherwise. More information about potential factors that could affect our business and financial results is included in our filings with the SEC.
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Item 7.01 |
Financial Statements and Exhibits. |
(d) Exhibits.
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Exhibit Number |
Description |
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Press release, dated July 9, 2018.
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American Renal Associates Holdings, Inc. ExhibitEX-99.1 2 ara-unitedhealthcaresettle.htm EXHIBIT 99.1 Exhibit American Renal Associates and UnitedHealthcare Reach SettlementARA to Enter into Multi-Year National In-Network Agreement with UnitedHealthcare Beverly,…To view the full exhibit click here
About American Renal Associates Holdings, Inc. (NYSE:ARA)
American Renal Associates Holdings, Inc. is a dialysis services provider in the United States. The Company focuses on joint venture partnerships with physicians. The Company’s segment is the ownership and operation of dialysis clinics. It provides patient care and clinical outcomes to patients suffering from the advanced stage of chronic kidney disease, known as end stage renal disease (ESRD). It operates clinics through a joint venture (JV) model, in which it partners with local nephrologists to develop, own and operate dialysis clinics. Each of its clinics is maintained as a separate joint venture in which it has the controlling interest, and its nephrologist partners and other joint venture partners have a non-controlling interest. The Company opens over 20 de novo clinics each year. The Company has owned and operated over 190 dialysis clinics in partnership with approximately 350 nephrologist partners treating over 13,000 patients in over 20 states and the District of Columbia.