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 September 30, 2001 or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
------------------ ------------------
Commission File Number 0-23639
PROVINCE HEALTHCARE COMPANY
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 62-1710772
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
105 WESTWOOD PLACE
SUITE 400
BRENTWOOD, TENNESSEE 37027
(Address of Principal Executive Offices) (Zip Code)
(615) 370-1377
(Registrant's Telephone Number, Including Area Code)
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 12 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
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
CLASS OUTSTANDING AT NOVEMBER 12, 2001
COMMON STOCK, $.01 PAR VALUE 31,643,706
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Condensed Consolidated Balance Sheets
September 30, 2001 and December 31, 2000.....................1
Condensed Consolidated Statements of Income
Three Months Ended September 30, 2001 and 2000...............2
Condensed Consolidated Statements of Income
Nine Months Ended September 30, 2001 and 2000................3
Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2001 and 2000................4
Notes to Condensed Consolidated Financial Statements.............5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS...................................12
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK.................................................22
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
September 30, December 31,
2001 2000
------------ ------------
(Unaudited) (Note 1)
ASSETS
Current assets:
Cash and cash equivalents $ 14,296 $ --
Accounts receivable, less allowance for doubtful accounts
of $36,463 in 2001 and $8,321 in 2000 96,848 89,208
Inventories 13,501 11,805
Prepaid expenses and other 19,957 7,282
--------- --------
Total current assets 144,602 108,295
Property, plant and equipment, net 271,917 210,277
Other assets:
Cost in excess of net assets acquired 181,956 183,331
Other assets 37,963 28,949
--------- --------
Total assets $ 636,438 $530,852
========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 16,697 $ 12,359
Accrued salaries and benefits 16,604 14,736
Accrued expenses 19,663 15,655
Current maturities of long-term obligations 1,948 2,179
--------- --------
Total current liabilities 54,912 44,929
Long-term obligations, less current maturities 217,440 162,086
Other liabilities 10,231 7,343
Minority interest 1,939 1,780
Stockholders' equity:
Common stock - $0.01 par value; 50,000,000 shares authorized; issued and
outstanding 31,639,366 and 30,908,588 shares at September 30, 2001
and December 31, 2000, respectively 316 309
Additional paid-in-capital 288,792 273,858
Accumulated other comprehensive loss (874) --
Retained earnings 63,682 40,547
--------- --------
Total stockholders' equity 351,916 314,714
--------- --------
Total liabilities and stockholders' equity $ 636,438 $530,852
========= ========
See accompanying notes.
1
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended September 30,
-------------------------------
2001 2000
----------- -------------
Revenue:
Net patient service revenue $ 126,393 $113,854
Management and professional services 2,260 2,763
Reimbursable expenses 1,376 1,459
Other 1,741 1,603
--------- --------
Net operating revenue 131,770 119,679
Expenses:
Salaries, wages and benefits 51,586 45,528
Reimbursable expenses 1,376 1,459
Purchased services 12,731 13,284
Supplies 14,562 13,913
Provision for doubtful accounts 13,578 12,251
Other operating expenses 13,754 11,690
Rentals and leases 1,871 1,727
Depreciation and amortization 7,596 6,433
Interest expense 2,833 3,928
Minority interest (10) 75
Loss on sale of assets 5 1
--------- --------
Total expenses 119,882 110,289
--------- --------
Income before provision for income taxes 11,888 9,390
Income taxes 4,993 3,992
--------- --------
Net income $ 6,895 $ 5,398
========= ========
Net income per common share:
Basic $ 0.22 $ 0.18
========= ========
Diluted $ 0.21 $ 0.17
========= ========
See accompanying notes.
2
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Nine Months Ended September 30,
-------------------------------
2001 2000
-------- ---------
Revenue:
Net patient service revenue $361,836 $328,492
Management and professional services 7,123 9,034
Reimbursable expenses 4,252 4,777
Other 4,523 4,311
-------- --------
Net operating revenue 377,734 346,614
Expenses:
Salaries, wages and benefits 146,148 134,288
Reimbursable expenses 4,252 4,777
Purchased services 35,855 36,032
Supplies 41,736 40,323
Provision for doubtful accounts 36,389 31,805
Other operating expenses 38,872 32,935
Rentals and leases 5,479 5,357
Depreciation and amortization 21,184 19,466
Interest expense 7,597 13,338
Minority interest 159 128
Loss on sale of assets 175 15
-------- --------
Total expenses 337,846 318,464
-------- --------
Income before provision for income taxes 39,888 28,150
Income taxes 16,753 11,965
-------- --------
Net income $ 23,135 $ 16,185
======== ========
Net income per common share:
Basic $ 0.74 $ 0.58
======== ========
Diluted $ 0.71 $ 0.56
======== ========
See accompanying notes.
3
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
Nine Months Ended September 30,
-------------------------------
2001 2000
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 37,628 $ 26,424
INVESTING ACTIVITIES
Purchase of property, plant and equipment (49,519) (30,142)
Purchase of hospitals (40,363) (31,608)
--------- ---------
Net cash used in investing activities (89,882) (61,750)
FINANCING ACTIVITIES
Proceeds from long-term debt 125,060 89,891
Repayments of debt (70,216) (154,614)
Issuance of common stock 11,706 9,842
Proceeds from stock offering -- 94,784
Other -- 26
--------- ---------
Net cash provided by financing activities 66,550 39,929
--------- ---------
Net increase in cash and cash equivalents 14,296 4,603
Cash and cash equivalents at beginning of period -- --
--------- ---------
Cash and cash equivalents at end of period $ 14,296 $ 4,603
========= =========
ACQUISITIONS
Fair value of assets acquired $ 41,865 $ 36,870
Liabilities assumed (1,502) (5,262)
--------- ---------
Cash paid $ 40,363 $ 31,608
========= =========
See accompanying notes.
4
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
SEPTEMBER 30, 2001
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with accounting principles generally accepted
in the United States 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 accounting principles generally
accepted in the United States for complete financial statements. Interim results
are not necessarily indicative of results that may be expected for the full
year. In the opinion of management, the accompanying interim financial
statements contain all material adjustments, consisting only of normal recurring
adjustments, necessary to present fairly the consolidated financial position,
results of operations and cash flows of Province Healthcare Company (the
"Company").
The balance sheet at December 31, 2000, has been derived from the
audited consolidated financial statements at that date, but does not include all
of the financial information and footnotes required by accounting principles
generally accepted in the United States for complete financial statements.
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, 2000.
2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In June 2001, the Financial Accounting Standards Board (FASB) issued
Statements of Financial Accounting Standards (SFAS) No. 141, Business
Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No.
141 was effective July 1, 2001, and SFAS No. 142 is effective for fiscal years
beginning after December 15, 2001. Under the new rules in SFAS No. 142, goodwill
and indefinite lived intangible assets will no longer be amortized, but will be
subject to annual impairment tests. Other intangible assets will continue to be
amortized over their useful lives.
The Company will apply the new rules on accounting for goodwill and
other intangible assets beginning in the first quarter of 2002. Application of
the nonamortization provisions of SFAS No. 142 is expected to result in an
increase in net income of approximately $4.4 million ($0.13 per share) per year,
based upon the Company's 2001 projected net income and diluted shares. During
2002, the Company will perform the first of the required impairment tests of
goodwill and indefinite lived intangible assets as of January 1, 2002 and has
not yet determined what the effect of these tests will be on the earnings and
financial position of the Company.
5
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - (CONTINUED)
In August 2001, the FASB issued Statement of Financial Accounting
Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets ("SFAS 144"), which supersedes SFAS 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of, and the
accounting and reporting provisions of APB Opinion No. 30, Reporting the Effects
of Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions. SFAS 144 removes goodwill from
its scope and clarifies other implementation issues related to SFAS 121. SFAS
144 also provides a single framework for evaluating long-lived assets to be
disposed of by sale. The provisions of this Statement are effective for
financial statements issued for fiscal years beginning after December 15, 2001,
and interim periods within those fiscal years. The Company does not expect SFAS
144 to have a material effect on its results of operations or financial
position.
3. ACQUISITIONS AND DIVESTITURES
ENNIS REGIONAL HOSPITAL
In February 2000, the Company acquired, through a long-term capital
lease agreement, the assets and business of the City of Ennis Hospital in Ennis,
Texas. The hospital had been closed prior to its acquisition by the Company and
was reopened in April 2000.
BOLIVAR MEDICAL CENTER
In April 2000, the Company acquired, through a long-term capital lease
agreement, the assets and business of Bolivar Medical Center in Cleveland,
Mississippi.
OJAI VALLEY COMMUNITY HOSPITAL
In October 2000, the Company sold substantially all of the assets of
Ojai Valley Community Hospital, a 110-bed general acute-care facility located in
Ojai, California, to the Ojai Valley Community Hospital Foundation.
GENERAL HOSPITAL
In December 2000, the Company completed the sale of substantially all
of the assets of General Hospital, a 75-bed acute-care hospital located in
Eureka, California, to St. Joseph Health System.
SELMA BAPTIST HOSPITAL
In July 2001, the Company acquired the assets and business of the
214-bed Selma Baptist Hospital in Selma, Alabama, for approximately $31.0
million, exclusive of working capital. To
6
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - (CONTINUED)
finance the acquisition and the purchase of working capital, the Company
borrowed $34.0 million under its revolving credit facility. The allocation of
the purchase price has been determined based upon currently available
information and is subject to further refinement pending final appraisal. This
is the Company's first Alabama hospital, allowing entrance into a new market.
This acquisition, and the subsequent acquisition of the only other hospital in
the area (see Note 9), will allow the Company to merge the two facilities,
establishing a regional hospital that provides more intensive services to the
large area it will serve.
ASHLAND REGIONAL MEDICAL CENTER
In August 2001, the Company acquired the assets and business of the
126-bed Ashland Regional Medical Center in Ashland, Pennsylvania, for
approximately $4.0 million, exclusive of working capital. To finance the
acquisition and the purchase of working capital, the Company borrowed $4.7
million under its revolving credit facility. The allocation of the purchase
price has been determined based upon currently available information and is
subject to further refinement pending final appraisal. This is the Company's
first Pennsylvania hospital, and is the only hospital in the community. By
bringing new services, updated facilities and additional highly qualified
physicians to this community, the Company has the opportunity to make this
hospital the leading provider of quality healthcare in the area.
The following pro forma information reflects the operations of the
entities acquired in 2001 and 2000, as if the respective transactions had
occurred at the beginning of the periods presented (in thousands, except per
share data):
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
2001 2000 2001 2000
---------- ---------- ---------- ----------
Net operating revenue $ 133,954 $ 132,196 $ 406,049 $ 397,811
Net income $ 6,626 $ 4,038 $ 21,341 $ 12,355
Net income per common share:
Basic 0.21 0.13 0.68 0.44
Diluted 0.20 0.13 0.65 0.43
The pro forma results of operations do not purport to represent what
the Company's results of operations would have been had such transactions, in
fact, occurred at the beginning of the periods presented or to project the
Company's results of operations in any future period.
OTHER INFORMATION
In accordance with its stated policy, management of the Company
evaluated independently all acquisitions prior to July 1, 2001, to determine the
appropriate amortization period for cost in excess of net assets acquired. Each
evaluation included an analysis of factors such as historic and projected
financial performance, evaluation of the estimated useful lives of buildings
7
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - (CONTINUED)
and fixed within local markets, and lease terms where applicable. In accordance
with SFAS No. 141 and No. 142, the acquisitions after June 30, 2001, were
accounted for as purchase business combinations, and goodwill resulting from the
acquisitions will not be amortized.
The foregoing acquisitions were accounted for using the purchase method
of accounting. The operating results of the acquired companies have been
included in the accompanying consolidated statements of income from the
respective dates of acquisition.
4. LONG-TERM OBLIGATIONS
Beginning March 31, 2001, the $295.0 million revolving credit facility
was permanently reduced $25.0 million each quarter, leaving a remaining balance
of $220.0 million on September 30, 2001. On November 13, 2001, the senior credit
facility, including the revolving credit facility, was amended and restated (see
note 9).
At September 30, 2001, the Company had $60.7 million outstanding under
its revolving credit facility and $117.9 million available, which includes
availability under the end-loaded lease facility that can be converted to
revolver availability at the Company's option.
5. COMPREHENSIVE INCOME
The following table presents the components of comprehensive income,
net of related taxes (in thousands):
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
2001 2000 2001 2000
---------- ---------- ---------- ----------
Net income $ 6,895 $ 5,398 $ 23,135 $ 16,185
Net change in fair value of interest
rate swap (602) -- (874) --
---------- ---------- ---------- ----------
Comprehensive income $ 6,293 $ 5,398 $ 22,261 $ 16,185
========== ========== ========== ==========
6. INCOME TAXES
The income tax provision for the three and nine months ended September
30, 2001 and 2000, differs from the statutory income tax computation primarily
due to permanent differences and the provision for state income taxes.
8
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - (CONTINUED)
7. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted
earnings per share (in thousands, except per share data):
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- --------------------------
2001 2000 2001 2000
--------- --------- --------- ---------
Numerator:
Net income $ 6,895 $ 5,398 $ 23,135 $ 16,185
========= ========= ========= =========
Denominator:
Denominator for basic income per share--
Weighted-average shares 31,540 30,624 31,308 27,914
Effective of dilutive securities--
Employee stock options 1,687 1,481 1,356 987
--------- --------- --------- ---------
Denominator for diluted income per share--
Adjusted weighted average shares 33,227 32,105 32,664 28,901
========= ========= ========= =========
Basic net income per share $ 0.22 $ 0.18 $ 0.74 $ 0.58
========= ========= ========= =========
Diluted net income per share $ 0.21 $ 0.17 $ 0.71 $ 0.56
========= ========= ========= =========
During the three-month period ended September 30, 2001, employees
exercised options to acquire 157,272 shares of common stock at an average
exercise price of $17.91 per share. During the nine-month period ended September
30, 2001, employees exercised options to acquire 542,936 shares of common stock
at an average exercise price of $17.91 per share, and the Company issued 189,388
shares of common stock at a price of $10.77 per share under its Employee Stock
Purchase Plan. There were 4% and 13% more diluted shares outstanding in the
three and nine-month periods ended September 30, 2001, respectively.
8. CONTINGENCIES
Management continually evaluates contingencies based on the best
available evidence and believes that adequate provision for losses has been
provided to the extent necessary. In the opinion of management, the ultimate
resolution of the following contingencies will not have a material effect on the
Company's results of operations or financial position.
9
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - (CONTINUED)
GENERAL AND PROFESSIONAL LIABILITY RISKS
Effective January 1, 2001, the Company purchased a professional
liability claim reporting policy. This coverage is subject to a $50,000
deductible per occurrence and limited to an annual deductible cap of $500,000.
The policy provides coverage up to $51,000,000 for claims incurred during the
annual policy term. The Company subsequently purchased an unlimited claim
reporting provision in the commercial insurance market to transfer risk for its
professional liability, effective January 1, 2001.
LITIGATION
The Company currently is, and from time to time is expected to be,
subject to claims and suits arising in the ordinary course of business.
NET PATIENT SERVICE REVENUE
Final determination of amounts earned under the Medicare and Medicaid
programs often occurs in subsequent periods because of audits by the programs,
rights of appeal and the application of numerous technical provisions.
Differences between original estimates and subsequent revisions (including
settlements) are included in the consolidated statements of income in the period
in which revisions are made, and resulted in minimal adjustments for the
three-month and nine-month periods ended September 30, 2001 and 2000.
FINANCIAL INSTRUMENTS
Interest rate swap agreements are used to manage the Company's interest
rate exposure under the credit facility. In 1998, the Company entered into an
interest rate swap agreement, which effectively converted for a five-year period
$45.0 million of floating-rate borrowings to fixed-rate borrowings. In January
2001, the Company terminated $16.5 million of the $45.0 million swap agreement,
leaving a notional amount of $28.5 million converted to fixed-rate borrowings.
The Company secured a 5.625% fixed interest rate on the swap agreement. This
agreement exposes the Company to credit losses in the event of non-performance
by the counterparty to the financial instrument. The Company anticipates that
the counterparty will fully satisfy its obligations under the contract.
10
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - (CONTINUED)
9. SUBSEQUENT EVENTS
On October 1, 2001, the Company acquired the assets and business of the 125-bed
Vaughan Regional Medical Center ("Vaughan") in Selma, Alabama, for approximately
$28.0 million, exclusive of working capital. To finance the acquisition, the
Company borrowed $28.0 million under its revolving credit facility. On October
4, 2001, the Company acquired the assets and business of the 96-bed Medical
Center of Southern Indiana ("Charlestown") in Charlestown, Indiana, for
approximately $16.0 million, exclusive of working capital. To finance the
acquisition, the Company borrowed $16.0 million under its revolving credit
facility. In accordance with SFAS No. 141 and 142, the acquisitions will be
accounted for as purchase business combinations, and any goodwill resulting from
the acquisitions will not be amortized. The operating results of Vaughan and
Charlestown will be included in the operations of the Company from the purchase
dates forward.
On October 10, 2001, the Company sold $172.5 million of Convertible
Subordinated Notes due October 10, 2008. Net proceeds of approximately $166.4
million were used to reduce the outstanding balance on the revolving line of
credit and for general corporate purposes, including acquisitions. The notes
bear interest at 4 1/4 % per year, payable semi-annually on April 10 and October
10, beginning, April 10, 2002.
On November 13, 2001, the Company entered into an amended and restated
senior credit facility providing for loans and letters of credit availability in
an aggregate amount of $250.0 million, including a revolving line of credit and
an end-loaded lease facility.
11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
You should read the following along with the Condensed Consolidated
Financial Statements and accompanying notes.
OVERVIEW
We are a healthcare services company focused on acquiring and operating
hospitals in attractive non-urban markets in the United States. As of September
30, 2001, we owned or leased 16 general acute care hospitals in 11 states with a
total of 1,751 licensed beds, and managed 34 hospitals in 13 states, with a
total of 2,727 licensed beds.
Our owned and leased hospitals accounted for 97.2% and 96.3% of our net
operating revenue in the three months ended September 30, 2001 and 2000,
respectively, and 97.0% and 95.8% of our net operating revenue in the nine
months ended September 30, 2001 and 2000, respectively.
IMPACT OF ACQUISITIONS AND DIVESTITURES
2000 Acquisitions
In February 2000, we acquired through a long-term capital lease
agreement, the assets and business of the 45-bed City of Ennis Hospital from the
City of Ennis, Texas. The aggregate rental payments required under the
thirty-year lease total $3.0 million, including a prepayment of $2.0 million. To
finance the lease prepayment, we borrowed $2.0 million under our revolving
credit facility. The hospital had been closed prior to our acquisition, and we
reopened the hospital in April 2000.
In April 2000, we acquired, through a long-term capital lease
agreement, the assets and business of the 165-bed Bolivar Medical Center in
Cleveland, Mississippi, from Bolivar County. Aggregate rental payments required
under the forty-year lease total $26.4 million and were prepaid at the date of
the acquisition. To finance the prepaid lease payment and the purchase of
working capital, we borrowed $24.6 million under our revolving credit facility.
2001 Acquisitions
In July 2001, we acquired the assets and business of the 214-bed Selma
Baptist Hospital in Selma, Alabama, for approximately $31.0 million, exclusive
of working capital. To finance the acquisition and the purchase of working
capital, we borrowed $34.0 million under our revolving credit facility.
In August 2001, we acquired the assets and business of the 126-bed
Ashland Regional Medical Center in Ashland, Pennsylvania, for approximately $4.0
million, exclusive of working capital. To finance the acquisition and the
purchase of working capital, we borrowed $4.7 million under our revolving credit
facility.
12
The acquisitions described above were accounted for as purchase
business combinations, and the results of operations of the hospitals have been
included in our results of operations from the purchase dates forward. The
September 30, 2001 results include City of Ennis Hospital and Bolivar Medical
Center for the entire period, Selma Baptist Hospital effective July 1, 2001 and
Ashland Regional Medical Center effective August 16, 2001. The September 30,
2000 results include seven and one-half months of start-up operations for City
of Ennis Hospital and five and one-half months of operations for Bolivar Medical
Center.
Due to the relatively small number of hospitals owned and leased by us,
each hospital acquisition can affect materially our overall operating margin.
Upon the acquisition of a hospital, we typically take a number of steps to lower
operating costs. The impact of such actions may be offset by other cost
increases to expand services, strengthen medical staff and improve market
position. The benefits of these investments and of other activities to improve
operating margins generally do not occur immediately. Consequently, the
financial performance of a newly acquired hospital may adversely affect overall
operating margins in the short term. As we make additional hospital
acquisitions, we expect that this effect will be mitigated by the expanded
financial base of existing hospitals and the allocation of corporate overhead
among a larger number of hospitals.
Divestitures
In October 2000, we sold substantially all of the assets of Ojai Valley
Community Hospital, a 110-bed general acute-care facility located in Ojai,
California, to the Ojai Valley Community Hospital Foundation. In December 2000,
we completed the sale of substantially all of the assets of General Hospital, a
75-bed acute-care hospital located in Eureka, California, to St. Joseph Health
System. The September 30, 2000 results include nine months of operations for the
sold hospitals.
13
RESULTS OF OPERATIONS
The following table presents, for the periods indicated, information
expressed as a percentage of net operating revenue. Such information has been
derived from our unaudited Condensed Consolidated Statements of Income included
elsewhere in this report. The results of operations for the periods presented
include hospitals from their acquisition dates, as discussed above.
Three Months Ended September 30, Percentage
-------------------------------- Increase(Decrease)
2001 2000 of Dollar Amounts
------- ------- ------------------
Net operating revenue 100.0% 100.0% 10.1%
Operating expenses (1) (83.1) (83.4) 9.6
------- -------
EBITDA (2) 16.9 16.6 12.5
Depreciation and amortization (5.8) (5.4) 18.1
Interest (2.1) (3.3) (27.9)
Other -- (0.1) (106.6)
------- -------
Income before income taxes 9.0 7.8 26.6
Provision for income taxes (3.8) (3.3) 25.1
------- -------
Net income 5.2% 4.5% 27.7%
======= =======
Nine Months Ended September 30, Percentage
------------------------------- Increase(Decrease)
2001 2000 of Dollar Amounts
------------ ------------ ------------------
Net operating revenue 100.0% 100.0% 9.0%
Operating expenses (1) (81.7) (82.4) 8.1
------- -------
EBITDA (2) 18.3 17.6 12.9
Depreciation and amortization (5.6) (5.6) 8.8
Interest (2.0) (3.8) (43.0)
Other (0.2) -- 133.6
------- -------
Income before income taxes 10.5 8.2 41.7
Provision for income taxes (4.4) (3.5) 40.0
------- -------
Net income 6.1% 4.7% 42.9%
======= =======
(1) Operating expenses represent expenses before interest, minority
interest, loss on sale of assets, income taxes, depreciation and
amortization expense.
(2) EBITDA represents the sum of income before income taxes, interest,
minority interest, depreciation and amortization, and loss on sale of
assets. We understand that industry analysts generally consider EBITDA
to be one measure of the financial performance of a company that is
presented to assist investors in analyzing the operating performance of
the Company and its ability to service debt. We believe that an
increase in EBITDA level is an indicator of our improved ability to
service existing debt, to sustain potential future increases in debt
and to satisfy capital requirements. However, EBITDA is not a measure
of financial performance under accounting principles generally accepted
in the United States and should not be considered an alternative to net
income as a measure of operating performance or to cash flows from
operating, investing, or financing activities as a measure of
liquidity. Given that EBITDA is not a measurement determined in
accordance with accounting principles generally accepted in the
14
United States and is thus susceptible to varying calculations, EBITDA,
as presented, may not be comparable to other similarly titled measures
of other companies.
SELECTED OPERATING STATISTICS - OWNED OR LEASED HOSPITALS
The following table sets forth certain operating statistics for our
company's owned or leased hospitals for each of the periods presented.
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------------- ---------------------------------
2001 2000 2001 2000
------------- ------------- ------------- -------------
Consolidated Hospitals:
Number of hospitals at end of period 16 16 16 16
Licensed beds at end of period 1,751 1,511 1,751 1,511
Beds in service at end of period 1,530 1,401 1,530 1,401
Inpatient admissions 13,638 12,262 39,552 34,895
Patient days 59,025 55,928 169,825 162,034
Adjusted patient days 97,839 97,973 279,071 280,948
Average length of stay (days) 4.3 4.6 4.3 4.6
Occupancy rates (average licensed beds) 36.6% 40.2% 35.5% 39.1%
Occupancy rates (average beds in service) 41.9% 43.4% 40.7% 42.2%
Gross inpatient revenue $ 157,215,349 $ 130,518,413 $ 454,540,055 $ 386,174,388
Gross outpatient revenue 103,367,565 98,097,088 292,328,682 283,195,399
THREE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 2000
Net operating revenue was $131.8 million for the three months ended
September 30, 2001, compared to $119.7 million for the comparable period of
2000, an increase of $12.1 million or 10.1%. We divested two hospitals in the
fourth quarter of 2000, which adversely impacted total revenue comparisons.
Excluding those two hospitals from both quarters, net operating revenues
increased 23% in the third quarter of 2001, compared to the same quarter in the
prior year. Cost report settlements and the filing of cost reports resulted in
minimal revenue adjustments for the three months ended September 30, 2001 and
2000. Net patient service revenue generated by hospitals owned during both
periods increased $14.6 million, or 14.4%, resulting from inpatient volume
increases, new services and price increases.
Operating expenses were $109.5 million, or 83.1% of net operating
revenue, for the three months ended September 30, 2001, compared to $99.9
million, or 83.4% of net operating revenue, for the comparable period of 2000.
Salaries and benefits, as a percentage of revenue,
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increased to 39.1% for the three months ended September 30, 2001, compared to
38.0% in the third quarter of 2000, as a result of shifting expense from
purchased services. The provision for doubtful accounts increased to 10.3% of
net operating revenue in 2001 from 10.2% of net operating revenue in 2000.
EBITDA was $22.3 million, or 16.9% of net operating revenue, for the
three months ended September 30, 2001, compared to $19.8 million, or 16.6% of
net operating revenue, for the comparable period of 2000, primarily as a result
of improved operations at hospitals owned during both periods.
Depreciation and amortization expense was $7.6 million, or 5.8% of net
operating revenue, for the three months ended September 30, 2001, compared to
$6.4 million, or 5.4% of net operating revenue for the comparable period of
2000. The increase in depreciation and amortization resulted primarily from
capital expenditures at hospitals owned during both periods.
Interest expense was $2.8 million for the three months ended September
30, 2001, compared to $3.9 million for the comparable period of 2000, a decrease
of $1.1 million or 27.9%. This was a result of our using the net proceeds of the
common stock offering in April 2000 to reduce the amount of indebtedness
outstanding under the revolving credit facility. Also, proceeds from the sale of
our 4 1/2% convertible subordinated notes in November 2000, were used to reduce
the higher-rate amount of indebtedness outstanding under the revolving credit
facility.
Income before provision for income taxes was $11.9 million for the
three months ended September 30, 2001, compared to $9.4 million for the
comparable period of 2000, an increase of $2.5 million or 26.6%.
Our provision for income taxes was $5.0 million for the three months
ended September 30, 2001, compared to $4.0 million for the comparable period of
2000. These provisions reflect effective income tax rates of 42.0% for the 2001
period, compared to 42.5% for the 2000 period. As a result of the foregoing, our
net income was $6.9 million, or 5.2% of net operating revenue, for the three
months ended September 30, 2001, compared to $5.4 million, or 4.5% of net
operating revenue for the comparable period of 2000.
NINE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2000
Net operating revenue was $377.7 million for the nine months ended
September 30, 2001, compared to $346.6 million for the comparable period of
2000, an increase of $31.1 million or 9.0%. Excluding the two hospitals sold in
the fourth quarter of 2000, net operating revenues increased 22% in the nine
months ended September 30, 2001, compared to the same period of 2000. Cost
report settlements and the filing of cost reports resulted in minimal revenue
adjustments for the nine months ended September 30, 2001 and 2000. Net patient
service revenue generated by hospitals owned during both periods increased $46.5
million, or 16.3%, resulting from inpatient volume increases, new services and
price increases.
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Operating expenses were $308.7 million, or 81.7% of net operating
revenue, for the nine months ended September 30, 2001, compared to $285.5
million, or 82.4% of net operating revenue, for the comparable period of 2000.
The provision for doubtful accounts increased to 9.6% of net operating revenue
in 2001 from 9.2% of net operating revenue in 2000.
EBITDA was $69.0 million, or 18.3% of net operating revenue, for the
nine months ended September 30 2001, compared to $61.1 million, or 17.6% of net
operating revenue, for the comparable period of 2000, primarily as a result of
improved operations at hospitals owned during both periods.
Depreciation and amortization expense was $21.2 million, or 5.6% of net
operating revenue, for the nine months ended September 30, 2001, compared to
$19.5 million, or 5.6% of net operating revenue for the comparable period of
2000. The increase in depreciation and amortization resulted primarily from
capital expenditures at hospitals owned during both periods.
Interest expense was $7.6 million for the nine months ended September
30, 2001, compared to $13.3 million for the comparable period of 2000, a
decrease of $5.7 million or 43.0%. This was a result of our using the net
proceeds of the common stock offering in April 2000 to reduce the amount of
indebtedness outstanding under the revolving credit facility. Also, proceeds
from the sale of our 4 1/2% convertible subordinated notes were used to reduce
the higher-rate amount of indebtedness outstanding under the revolving credit
facility.
Income before provision for income taxes was $39.9 million for the nine
months ended September 30, 2001, compared to $28.2 million for the comparable
period of 2000, an increase of $11.7 million or 41.7%.
Our provision for income taxes was $16.8 million for the nine months
ended September 30, 2001, compared to $12.0 million for the comparable period of
2000. These provisions reflect effective income tax rates of 42.0% for the 2001
period, compared to 42.5% for the 2000 period. As a result of the foregoing, our
net income was $23.1 million, or 6.1% of net operating revenue, for the nine
months ended September 30, 2001, compared to $16.2 million, or 4.7% of net
operating revenue for the comparable period of 2000.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 2001, we had working capital of $89.7 million,
including cash and cash equivalents of $14.3 million. The ratio of current
assets to current liabilities was 2.6 to 1.0 at September 30, 2001, and 2.4 to
1.0 at December 31, 2000.
Cash provided by operations was $37.6 million for the nine months ended
September 30, 2001. Cash used in investing activities was $89.9 million for the
nine months ended September 30, 2001, relating to capital expenditures and
acquisitions. Net cash provided by financing activities was $66.6 million for
the nine months ended September 30, 2001, primarily as a result of borrowings
under our revolving credit facility and issuance of common stock through
exercises of stock options and through the Employee Stock Purchase Plan.
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The allowance for doubtful accounts increased to $36.5 million at
September 30, 2001, from $8.3 million at December 31, 2000, an increase of $28.2
million. The allowance for doubtful accounts as a percent of accounts
receivable, net of contractuals, increased to 27.4% at September 30, 2001,
compared to 8.5% at December 31, 2000. This is the result of a change in the
timing of write-offs of fully-reserved patient accounts receivable to conform to
industry practice. Accounts are now written off when they are returned from the
collection agency, as opposed to the prior practice of writing off the account
when it was sent to the collection agency. There has been no change in our
policy related to the provision for bad debts.
Total long-term obligations, less current maturities, increased to
$217.4 million at September 30, 2001, from $162.1 million at December 31, 2000.
The increase resulted primarily from additional borrowings under the revolving
credit facility to fund acquisitions and for working capital, offset by capital
lease payments.
In October 2001, we sold $172.5 million of Convertible Subordinated
Notes due October 10, 2008. Net proceeds of approximately $166.4 million were
used to reduce the outstanding balance on the revolving line of credit and for
general corporate purposes, including acquisitions. The notes are unsecured and
bear interest at 4 1/4% per year, payable semi-annually on April 10 and October
10, beginning, April 10, 2002.
In November 2001, we entered into an amended and restated senior credit
facility providing for loans and letters of credit availability in an aggregate
amount of $250.0 million, including a revolving line of credit and an end-loaded
lease facility.
We intend to acquire additional acute care facilities, and are actively
seeking out such acquisitions. There can be no assurance that we will not
require additional debt or equity financing for any particular acquisition.
Also, we continually review our capital needs and financing opportunities and
may seek additional equity or debt financing for our acquisition program or
other needs.
Capital expenditures, excluding acquisitions, for the nine months ended
September 30, 2001 and 2000, were $49.5 million and $30.1 million, respectively,
inclusive of construction projects. Capital expenditures for the owned hospitals
may vary from year to year depending on facility improvements and service
enhancements undertaken by the hospitals. We expect to make total capital
expenditures in 2001 of approximately $59.9 million, exclusive of any
acquisitions of businesses. Planned capital expenditures for 2001 consist
principally of capital improvements to owned and leased hospitals. We expect to
fund these expenditures through cash provided by operating activities and
borrowings under our revolving credit facility.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In June 2001, the Financial Accounting Standards Board (FASB) issued
Statements of Financial Accounting Standards (SFAS) No. 141, Business
Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No.
141 was effective July 1, 2001, and SFAS No. 142 is effective for fiscal years
beginning after December 15, 2001. Under the new rules in SFAS No. 142, goodwill
and indefinite lived intangible assets will no longer be amortized, but
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will be subject to annual impairment tests. Other intangible assets will
continue to be amortized over their useful lives.
We will apply the new rules on accounting for goodwill and other
intangible assets beginning in the first quarter of 2002. Application of the
nonamortization provisions of SFAS No. 142 is expected to result in an increase
in net income of approximately $4.4 million ($0.13 per share) per year, based
upon our 2001 projected net income and diluted shares. During 2002, we will
perform the first of the required impairment tests of goodwill and indefinite
lived intangible assets as of January 1, 2002 and have not yet determined what
the effect of these tests will be on our earnings and financial position.
In August 2001, the FASB issued Statement of Financial Accounting
Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets ("SFAS 144"), which supersedes SFAS 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, and the
accounting and reporting provisions of APB Opinion No. 30, Reporting the Effects
of Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions. SFAS 144 removes goodwill from
its scope and clarifies other implementation issues related to SFAS 121. SFAS
144 also provides a single framework for evaluating long-lived assets to be
disposed of by sale. The provisions of this Statement are effective for
financial statements issued for fiscal years beginning after December 15, 2001,
and interim periods within those fiscal years. We do not expect SFAS 144 to have
a material effect on our results of operations or financial position.
MARKET RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS
Our interest expense is sensitive to changes in the general level of
interest rates. To mitigate the impact of fluctuations in interest rates, we
generally maintain 50% - 75% of our debt at a fixed rate, either by borrowings
on a long-term basis or entering into an interest rate swap. At September 30,
2001, approximately 100% of our outstanding debt and end-loaded lease facility
amounts were effectively at a fixed rate. Our interest rate swap contract allows
us to periodically exchange fixed rate and floating rate payments over the life
of the agreement. Floating-rate payments are based on LIBOR and fixed-rate
payments are dependent upon market levels at the time the interest rate swap was
consummated. Our interest rate swap is a cash flow hedge, which effectively
converts an aggregate notional amount of $28.5 million of floating rate
borrowings to fixed rate borrowings at September 30, 2001. Our policy is not to
hold or issue derivatives for trading purposes and to avoid derivatives with
leverage features. We are exposed to credit losses in the event of
nonperformance by the counterparty to the financial instrument. We anticipate
that the counterparty will fully satisfy its obligations under the contract.
GENERAL
The Medicare program accounted for approximately 54.7% and 54.9% of
hospital patient days for the three and nine-month periods ended September 30,
2001, respectively. The Medicaid programs accounted for approximately 19.0% and
18.4% of hospital patient days for the three and nine-month periods ended
September 30, 2001, respectively. The payment rates under the Medicare program
for inpatients are prospective, based upon the diagnosis of a patient. The
Medicare payment rate increases historically have been less than actual
inflation.
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Both federal and state legislatures are continuing to scrutinize the
healthcare industry for the purpose of reducing heath care costs. While we are
unable to predict what, if any, future health reform legislation may be enacted
at the federal or state level, we expect continuing pressure to limit
expenditures by governmental healthcare programs. The Balanced Budget Act of
1997 imposed certain limitations on increases in the inpatient Medicare rates
paid to acute care hospitals. Payments for Medicare outpatient services provided
at acute care hospitals and home health services historically have been paid
based on costs, subject to certain limits, but now are reimbursed on prospective
payment systems as mandated by the Balanced Budget Act of 1997. The Balanced
Budget Act of 1997 also includes a managed care option that could direct
Medicare patients to managed care organizations. Further changes in the Medicare
or Medicaid programs and other proposals to limit healthcare spending could have
a material adverse effect on the healthcare industry and our company.
Some of our acute care hospitals, like most acute care hospitals in the
United States, have significant unused capacity. The result is substantial
competition for patients and physicians. Inpatient utilization continues to be
affected negatively by payor-required pre-admission authorization and by payor
pressure to maximize outpatient and alternative health care delivery services
for less acutely ill patients. We expect increased competition and admission
constraints to continue in the future. The ability to respond successfully to
these trends, as well as spending reductions in governmental health care
programs, will play a significant role in determining the ability of our
hospitals to maintain their current rate of net revenue growth and operating
margins.
We expect the industry trend in increased outpatient services to
continue because of the increased focus on managed care and advances in
technology. Outpatient revenue of our owned or leased hospitals was
approximately 39.7% and 39.1% of gross patient service revenue for the three and
nine-month periods ended September 30, 2001, respectively, compared to 42.9% and
42.3% of gross patient service revenue for the three and nine-month periods
ended September 30, 2000.
The billing and collection of accounts receivable by hospitals are
complicated by:
o the complexity of the Medicare and Medicaid regulations;
o increases in managed care;
o hospital personnel turnover;
o the dependence of hospitals on physician documentation of
medical records; and
o the subjective judgment involved.
These factors, or any combination of them, may impact our ability to
bill and collect our accounts receivable at the rates we have anticipated, which
could negatively affect our future cash flows.
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The federal government and a number of states are increasing the
resources devoted to investigating allegations of fraud and abuse in the
Medicare and Medicaid programs. At the same time, regulatory and law enforcement
authorities are taking an increasingly strict view of the requirements imposed
on providers by the Social Security Act and Medicare and Medicaid regulations.
Although we believe that we are in material compliance with such laws, a
determination that we have violated such laws, or even the public announcement
that we were being investigated concerning possible violations, could have a
material adverse effect on our company.
Our historical financial trend has been impacted favorably by our
success in acquiring acute care hospitals. While we believe that trends in the
healthcare industry described above may create possible future acquisition
opportunities, there can be no assurances that we can continue to maintain our
current growth rate through hospital acquisitions and successfully integrate the
hospitals into our system.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires us to make estimates
and assumptions that affect the amounts reported in our financial statements.
Resolution of matters, for example, final settlements with third party payors,
may result in changes from those estimates. The timing and amount of such
changes in estimates may cause fluctuations in our quarterly or annual operating
results.
FORWARD-LOOKING STATEMENTS
Our disclosure and analysis in this report contain some forward-looking
statements. Forward-looking statements give our current expectations or
forecasts of future events. You can identify these statements by the fact that
they do not relate strictly to historical or current facts. Such statements may
include words such as "anticipate," "estimate," "expect," "project," "intend,"
"plan," "believe" and other words and terms of similar meaning in connection
with any discussion of future operating or financial performance. Any or all of
our forward-looking statements in this report may turn out to be wrong. They can
be affected by inaccurate assumptions we might make or by known or unknown risks
and uncertainties. Many factors mentioned in our discussion in this report will
be important in determining future results. Consequently, no forward-looking
statement can be guaranteed. Actual future results may vary materially. Factors
that may cause our plans, expectations, future financial condition and results
to change include, but are not limited to:
o the highly competitive nature of the healthcare business;
o the efforts of insurers, healthcare providers and others to
contain healthcare costs;
o possible changes in the levels and terms of reimbursement for
our charges by government programs, including Medicare and
Medicaid or other third-party payors;
o changes in or failure to comply with federal, state or local
laws and regulations affecting the healthcare industry;
o the possible enactment of federal or state healthcare reform;
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o the departure of key members of our management;
o claims and legal actions relating to professional liability;
o our ability to implement successfully our acquisition and
development strategy;
o our ability to attract and retain qualified personnel and
recruit physicians;
o potential federal or state investigations;
o fluctuations in the market value of our common stock or debt
instruments;
o changes in accounting principles generally accepted in the
United States; and
o changes in demographic, general economic and business
conditions, both nationally and in the regions in which we
operate.
Except as required by law, we undertake no obligation to publicly
update any forward-looking statements, whether as a result of new information,
future events or otherwise. We advise you, however, to consult any additional
disclosures we make in our Form 10-Q, 8-K and 10-K reports to the Securities and
Exchange Commission, as well as the discussion of risks and uncertainties under
the caption "Risk Factors" contained in our Registration Statement on Form S-3,
filed with the Securities and Exchange Commission on January 24, 2001
(Commission File No. 333-54192), and any amendments or supplements to such
registration statement. These are factors that we think could cause our actual
results to differ materially from expected results. Other factors besides those
listed here also could affect us adversely. This discussion is provided as
permitted by the Private Securities Litigation Reform Act of 1995.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
During the three and nine-month periods ended September 30, 2001, there
were no material changes in the quantitative and qualitative disclosures about
market risks presented in our Annual Report on Form 10-K for the year ended
December 31, 2000. Our only derivative instrument relates to an interest rate
swap agreement.
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PART II
OTHER INFORMATION
ITEM 5. OTHER INFORMATION.
The deadline for delivering your notice of a shareholder proposal,
other than a proposal to be included in the proxy statement, for the 2002 Annual
Meeting of Shareholders will be March 11, 2002, pursuant to Rule 14a-4 under the
Securities Exchange Act of 1934. The persons named as proxies in the proxy
statement may exercise discretionary voting authority with respect to any matter
that is not submitted to us by such date.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
Exhibit
Number Description of Exhibits
3.1 Amended and Restated Certificate of Incorporation of Province
Healthcare Company, as filed with the Delaware Secretary of
State on June 16, 2000 (a)
3.2 Amended and Restated Bylaws of Province Healthcare Company (b)
- ------------------
(a) Incorporated by reference to the exhibits filed with
the Registrant's Quarterly Report filed on Form 10-Q,
for the quarterly period ended September 30 2000,
Commission File No. 0-23639.
(b) Incorporated by reference to the exhibits filed with
the Registrant's Registration Statement on Form S-1,
Registration No. 333-34421.
(b) Reports on Form 8-K
During the three months ended September 30, 2001, we filed the
following reports on Form 8-K:
(i) Form 8-K, filed on July 9, 2001, with respect to the
closing of the acquisition of Selma Baptist Hospital,
the announcement of a definitive agreement to acquire
Ashland Regional Medical Center and the announcement
that Province entered into a letter of intent to
acquire an additional hospital facility and that as
of that date Province had three letters of intent
outstanding.
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(ii) Form 8-K, filed on August 24, 2001, with respect to
the closing of the acquisition of Ashland Regional
Medical Center in Ashland, Pennsylvania.
(iii) Form 8-K, filed on September 4, 2001, with respect to
the announcement of a definitive agreement to acquire
Vaughan Regional Medical Center in Selma, Alabama and
the announcement that Province entered into a letter
of intent to acquire an additional hospital.
(iv) Form 8-K, filed on September 17, 2001, with respect
to the opening of Northeastern Nevada Regional
Hospital and the announcement of a definitive
agreement to acquire Lakewood Medical Center in
Morgan City, Louisiana.
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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.
PROVINCE HEALTHCARE COMPANY
Date: November 14, 2001 By: /s/ Brenda B. Rector
-----------------------------
Brenda B. Rector
Vice President and Controller
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