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For the quarter ended December 31, 2007, revenues were $412.3 million, a12.0% increase over revenues of $368.1 million for the fourth quarter of 2006.The Company estimates that the increase in net revenues was comprised ofapproximately 12.5% internal growth and 2.1% acquisition growth, partiallyoffset by Medicare price changes taking effect in 2007. Net income for thequarter ended December 31, 2007, was $57.6 million compared to net income of$57.0 million for the fourth quarter of 2006. Diluted earnings per share were$0.70 for the quarter ended December 31, 2007, compared with $0.59 dilutedearnings per share for the comparable prior year period.
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Revenues for the year ended December 31, 2007, were $1.60 billion, a 13.2%increase over revenues of $1.41 billion for the comparable period in 2006.The Company estimates that the increase in net revenues was comprised ofapproximately 11.3% internal growth and 3.5% acquisition growth, partiallyoffset by Medicare price changes taking effect in 2007. Net income for theyear ended December 31, 2007, was $226.1 million compared to net income of$213.0 million for the prior year. Diluted earnings per share were $2.58 forthe year ended December 31, 2007, compared with $2.16 diluted earnings pershare for the comparable period last year.
Lincare added ten new operating centers in the fourth quarter, with nineof those locations derived from internal expansion and one location derivedfrom acquisition. For the year ended December 31, 2007, Lincare added 41 newoperating centers, with 40 derived from internal expansion and one derivedfrom acquisition. The total number of Lincare locations expanded to 1,019 atthe end of 2007.
During the fourth quarter and year ended December 31, 2007, Lincarecompleted the acquisition of three businesses with annual revenues ofapproximately $4.3 million. The acquired businesses were located in Alabama,Florida and Mississippi.
John P. Byrnes, Lincare's Chief Executive Officer, said, "We are pleasedwith Lincare's operating and financial performance in 2007. We continue togain market share in our core respiratory business while controlling costs andreinvesting capital to sustain growth. We remain committed to our strategy toremain the market leader in the provision of home-based respiratory therapyservices and to expand our reach into markets where we believe we can addvalue and compete on the basis of efficiency and quality of care."
Lincare generated $406.2 million of cash from operating activities during2007. Investments of cash during the year included $129.8 million in netcapital expenditures and $4.8 million in business acquisition expenditures.As of December 31, 2007, total debt outstanding was $838.2 million and cashand short-term investments were $150.0 million. The Company repurchased18,423,994 shares of its common stock during the year for $673.4 million andcommon shares outstanding at December 31, 2007 were 74,193,793 shares.
The Company's revenues and earnings are expected to be impacted in fiscalyear 2008 by reductions in Medicare reimbursement for certain items providedby the Company to Medicare beneficiaries. The Company is still evaluating thepotential impact of these changes to its business, but estimates that revenuesin 2008 will be negatively impacted by approximately $65.0 million to $70.0million. Based on the expected timing of the implementation of thereimbursement changes, the Company estimates that 10% of the impact will berealized in the first quarter of 2008, 27% in the second quarter, 31% in thethird quarter and 32% in the fourth quarter. The Medicare reimbursement
