EXHIBIT 99
LIFEPOINT
HOSPITALS, INC.
CONTACT: MICHAEL J. CULOTTA
SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
(615) 372-8512
LIFEPOINT HOSPITALS REPORTS 54.5% INCREASE
IN SECOND QUARTER 2002 EPS BEFORE EXTRAORDINARY LOSS
BRENTWOOD, TENNESSEE (July 22, 2002) - LifePoint Hospitals, Inc. (NASDAQ: LPNT)
today announced results for the second quarter and six months ended June 30,
2002.
For the second quarter ended June 30, 2002, net revenues were $177.9
million, up 17.3% from $151.6 million a year ago. Income before extraordinary
item for the quarter totaled $13.1 million, or $0.34 per diluted share, versus
$8.5 million, or $0.22 per diluted share, in the prior-year period, representing
increases of 54.6% and 54.5%, respectively. As was previously announced, the
Company recorded an after-tax extraordinary charge to income of $15.6 million
for the quarter ended June 30, 2002, related to the repurchase of $120.5 million
of an original $150.0 million in principal amount of outstanding 10 3/4% Senior
Subordinated Notes due 2009 issued by the Company's wholly owned subsidiary,
LifePoint Hospitals Holdings, Inc. This charge includes the premium paid for the
Notes (the amount paid in excess of the face value of the Notes), deferred loan
costs allocable to the Notes purchased and fees and expenses incurred in
connection with the purchases. During the three months ended June 30, 2001, the
Company wrote off $2.6 million of deferred loan costs related to the original
credit agreement, which resulted in an extraordinary charge of $1.6 million, or
$0.04 per diluted share. Including extraordinary items in both periods, net loss
for the quarter ended June 30, 2002, totaled $2.5 million, or $0.06 per diluted
share, compared with net income for the prior year of $6.9 million, or $0.18 per
diluted share. Earnings before interest, income taxes, depreciation,
amortization, ESOP expense, minority interest and extraordinary loss (EBITDA)
increased 21.8% to $38.7 million from $31.8 million in the same period last
year.
For the six months ended June 30, 2002, net revenues were $359.5
million, up 17.5% from $305.9 million a year ago. Income before extraordinary
item for the six-month period totaled $27.6 million, or $0.71 per diluted share,
versus $17.1 million, or $0.47 per diluted share (including a $0.5 million
pre-tax gain, or $0.01 per diluted share), in the prior-year period,
representing increases of 61.6% and 51.1%, respectively. The after-tax
extraordinary charges to income mentioned above were $16.4 million and $1.6
million for the six months ended June 30, 2002 and 2001, respectively. For the
six months ended June 30, 2002, the Company repurchased $128 million of the
10 3/4% Senior Subordinated Notes due 2009. Including extraordinary items in
both periods, net income for the six months ended June 30, 2002, totaled $11.2
million, or $0.30 per diluted share, compared with net income for the six months
ended June 30, 2001, of $15.5 million, or $0.43 per diluted share. Earnings
before interest, income taxes, depreciation, amortization, ESOP expense,
minority interest, gain on previously impaired asset and extraordinary loss
(EBITDA) increased 23.6% to $81.3 million from $65.8 million in the same period
last year.
-MORE-
LPNT Announces Second Quarter Results
Page 2
July 22, 2002
During the quarter, the Company completed an offering of an aggregate
of $250 million of its 4 1/2% Convertible Subordinated Notes due June 1, 2009.
After paying expenses associated with the offering, LifePoint realized net
proceeds from the offering of $242.7 million.
Kenneth C. Donahey, chairman and chief executive officer of LifePoint
Hospitals, said, "During the second quarter, the Company took steps to
facilitate continued strong financial performance by substantially strengthening
its balance sheet. Our repurchase of a majority of the outstanding 10 3/4%
Senior Subordinated Notes due 2009 and our issuance of $250 million in 4 1/2%
Convertible Subordinated Notes due June 1, 2009, along with funds available
under our $200 million revolving credit facility, give us the resources
necessary to support our financial goals. From acquisitions to physician
recruiting to adding new technology, I believe we are well positioned to
continue our strong performance."
Mr. Donahey continued, "I'm proud of the efforts of our employees in
delivering another exceptional quarter. I am personally grateful to each of you
for your contribution and hard work, and I am honored to be your colleague.
Delivering strong performance for our shareholders is commendable, but doing so
by providing outstanding care in our communities is indeed a higher calling."
A listen-only simulcast and replay of LifePoint Hospitals' second
quarter conference call will be available on-line at www.lifepointhospitals.com
and www.companyboardroom.com on July 23, 2002, beginning at 10:00 a.m. Eastern
Time.
LifePoint Hospitals, Inc. operates 23 hospitals in non-urban areas. In
most cases, the LifePoint facility is the only hospital in its community.
LifePoint's non-urban operating strategy offers continued operational
improvement by focusing on its five core values: delivering high quality patient
care, supporting physicians, creating excellent workplaces for its employees,
providing community value, and ensuring fiscal responsibility. Headquartered in
Brentwood, Tennessee, LifePoint Hospitals is affiliated with over 7,000
employees.
******
The above statements include forward-looking statements based on
current management expectations. Numerous factors exist which may cause results
to differ from these expectations. Many of the factors that will determine the
Company's future results are beyond the ability of the Company to control or
predict. These statements are subject to risks and uncertainties relating to the
Company, including without limitation, (i) possible changes in reimbursement to
healthcare providers and insurers that may reduce payments; (ii) its ability to
attract and retain qualified management and personnel, including physicians,
nurses and clinical support personnel; (iii) the geographic concentration of the
Company's operations; (iv) risks associated with the Company's acquisition and
disposition strategies; (v) the management of healthcare risks as a result of
the delivery of patient care; (vi) the regulated nature of the healthcare
industry; (vii) the highly competitive nature of the healthcare business; (viii)
the potential adverse impact of government investigations and litigation
involving the business practices of HCA (to the extent relating to periods prior
to the Company's formation); (ix) fluctuations in the market value of the
Company's common stock; (x) the possibility that existing accounting practices
relating to the treatment of the extraordinary charge to be incurred by the
Company will be changed based on current proposals; (xi) the possibility that
the Company's judgment regarding the tax implications of the purchase of its
10 3/4% Senior Subordinated Notes could be challenged; (xii) the possibility
that the Company's liquidity needs could change; and (xiii) those risks and
uncertainties detailed from time to time in the Company's filings with the
Securities and Exchange Commission. Therefore, the Company's actual results may
differ materially. The Company undertakes no obligation to update any
forward-looking statements, or to make any other forward-looking statements,
whether as a result of new information, future events or otherwise.
All references to "Company" and "LifePoint" as used throughout this
document refer to LifePoint Hospitals, Inc. and its affiliates.
-MORE-
LPNT Announces Second Quarter Results
Page 3
July 22, 2002
LIFEPOINT HOSPITALS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------------------------- ------------------------------------------
2002 2001 2002 2001
------------------- ------------------ ------------------ -------------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
------ ------ ------ ------ ------ ------ ------ ------
Revenues $177.9 100.0% $151.6 100.0% $359.5 100.0% $305.9 100.0%
Salaries and benefits 70.9 39.8% 59.4 39.2% 141.6 39.4% 119.7 39.1%
Supplies 21.9 12.3% 18.8 12.4% 44.8 12.5% 38.4 12.5%
Other operating expenses 33.3 18.7% 31.0 20.4% 65.5 18.2% 59.4 19.5%
Provision for
doubtful accounts 13.1 7.4% 10.6 7.0% 26.3 7.3% 22.6 7.4%
------ ----- ------ ----- ------ ----- ------ -----
139.2 78.2% 119.8 79.0% 278.2 77.4% 240.1 78.5%
------ ----- ------ ----- ------ ----- ------ -----
EBITDA 38.7 21.8% 31.8 21.0% 81.3 22.6% 65.8 21.5%
Depreciation and
amortization 9.7 5.5% 8.5 5.7% 19.1 5.4% 16.6 5.4%
Interest expense, net 2.8 1.6% 3.7 2.4% 6.9 1.9% 10.2 3.3%
Gain on previously
impaired assets -- -- -- -- -- -- (0.5) (0.2)%
ESOP expense 2.7 1.5% 2.4 1.6% 5.2 1.4% 5.0 1.7%
------ ----- ------ ----- ------ ----- ------ -----
Income before minority
interests, income taxes
and extraordinary item 23.5 13.2% 17.2 11.3% 50.1 13.9% 34.5 11.3%
Minority interests 0.8 0.4% 0.7 0.4% 1.5 0.4% 1.3 0.5%
------ ----- ------ ----- ------ ----- ------ -----
Income before income taxes
and extraordinary item 22.7 12.8% 16.5 10.9% 48.6 13.5% 33.2 10.8%
Provision for income taxes 9.6 5.4% 8.0 5.3% 21.0 5.8% 16.1 5.2%
------ ----- ------ ----- ------ ----- ------ -----
Income before
extraordinary item 13.1 7.4% 8.5 5.6% 27.6 7.7% 17.1 5.6%
Extraordinary loss on early
retirement of debt, net 15.6 8.8% 1.6 1.0% 16.4 4.6% 1.6 0.5%
------ ----- ------ ----- ------ ----- ------ -----
Net income (loss) $ (2.5) (1.4)% $ 6.9 4.6% $ 11.2 3.1% $ 15.5 5.1%
====== ===== ====== ===== ====== ===== ====== =====
Shares used in diluted
EPS (000's) 38,667 37,662 39,728 35,875
Diluted earnings (loss)
per share:
Income before gain
on previously
impaired assets and
extraordinary item $ 0.34 $ 0.22 $ 0.71 $ 0.46
Gain on previously
impaired assets, net -- -- -- 0.01
Extraordinary loss on
early retirement
of debt, net (0.40) (0.04) (0.41) (0.04)
------ ------ ------ ------
Net income (loss)(1) $(0.06) $ 0.18 $ 0.30 $ 0.43
====== ====== ====== ======
(1) In April 2002, the Financial Accounting Standards Board (FASB) issued FASB
Statement No. 145, "Recission of FASB Statements No. 4, 44 and 64, Amendment
of FASB Statement No. 13, and Technical Corrections." The recission of FASB
Statement No. 4, "Reporting Gains and Losses from Extinguishment of Debt,"
no longer allows companies to report gains or losses from extinguishment of
debt as an extraordinary item. Effective January 1, 2003, the Company will
adopt FASB Statement No. 145. This will result in a $0.01 decrease in net
income (loss) per diluted share from $(0.06) to $(0.07) and from $0.30 to
$0.29 for the three months and six months ended June 30, 2002, respectively.
-MORE-
LPNT Announces Second Quarter Results
Page 4
July 22, 2002
LIFEPOINT HOSPITALS, INC.
UNAUDITED STATISTICS
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------------- -----------------------------------
% %
2002 2001 CHANGE 2002 2001 CHANGE
------- ------- ------ -------- -------- ------
Number of hospitals at
end of period 23 21 9.5% 23 21 9.5%
Licensed beds at end of period 2,197 1,963 11.9% 2,197 1,963 11.9%
Weighted average licensed beds 2,197 1,971 11.5% 2,197 1,980 11.0%
Average daily census 826 755 9.4% 880 805 9.3%
Average length of stay 4.1 4.0 2.5% 4.1 4.0 2.5%
ACTUAL:
Admissions 18,548 17,128 8.3% 39,099 36,028 8.5%
Equivalent admissions(1) 36,114 31,379 15.1% 73,702 64,454 14.3%
Revenues ($ in millions) $ 177.9(2) $ 151.6 17.3% $ 359.5(3) $ 305.9 17.5%
Revenues per equivalent
admission $ 4,924 $ 4,833 1.9% $ 4,877 $ 4,746 2.8%
Outpatient factor(1) 1.95 1.83 1.89 1.79
Total surgeries 21,811 19,109 14.1% 43,629 37,706 15.7%
Outpatient surgeries 16,079 14,250 12.8% 32,245 27,805 16.0%
Emergency room visits 88,103 76,201 15.6% 173,090 153,774 12.6%
Net outpatient revenues as a
percentage of net revenues 51.1% 48.1% 49.4% 46.8%
SAME-HOSPITAL(4):
Admissions 17,123 17,128 --% 35,866 36,028 (0.4)%
Equivalent admissions(1) 32,792 31,379 4.5% 66,567 64,454 3.3%
Revenues ($ in millions) $ 163.1(2) $ 151.6 7.6% $ 329.5(3) $ 305.7 7.8%
Revenues per equivalent
admission $ 4,974 $ 4,833 2.9% $ 4,950 $ 4,744 4.3%
Outpatient factor(1) 1.91 1.83 1.86 1.79
Total surgeries 20,392 19,109 6.7% 40,592 37,706 7.7%
Outpatient surgeries 15,066 14,250 5.7% 30,107 27,805 8.3%
Emergency room visits 79,918 76,201 4.9% 156,676 153,774 1.9%
(1) Equivalent admissions is used by management and investors as a general
measure of combined inpatient and outpatient volume. Equivalent
admissions is computed by multiplying admissions (inpatient volumes) by
the sum of gross inpatient revenue and gross outpatient revenue and then
dividing the resulting amount by gross inpatient revenue. The equivalent
admissions computation "equates" outpatient revenue to the volume
measure (admissions) used to measure inpatient volume resulting in a
general measure of combined inpatient and outpatient volume.
(2) In addition to same-hospital revenue growth of $11.5 million over the
prior year period, 2001 acquisitions increased the growth in actual
revenues by $14.8 million.
(3) In addition to same-hospital revenue growth of $23.8 million over the
prior year period, 2001 acquisitions increased the growth in actual
revenues by $29.8 million.
(4) Same hospital information excludes the operations of hospitals which the
Company either acquired or divested during the years presented. The
costs of corporate overhead are included in same hospital information.
-MORE-
LPNT Announces Second Quarter Results
Page 5
July 22, 2002
LIFEPOINT HOSPITALS, INC.
CONSOLIDATED BALANCE SHEETS
DOLLARS IN MILLIONS
JUNE 30, DECEMBER 31,
2002 2001
-------- ------------
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $ 155.1 $ 57.2
Short-term investments 21.5 --
Accounts receivable, net 74.9 56.7
Inventories 16.8 16.3
Deferred income taxes and other current assets 25.3 18.7
-------- --------
293.6 148.9
Property and equipment:
Land 10.7 10.7
Buildings and improvements 262.9 262.0
Equipment 277.7 263.4
Construction in progress 20.2 7.2
-------- --------
571.5 543.3
Accumulated depreciation (223.1) (204.9)
-------- --------
348.4 338.4
Deferred loan costs, net 9.9 7.1
Goodwill 47.2 47.1
Other 12.5 12.8
-------- --------
$ 711.6 $ 554.3
======== ========
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 18.5 $ 19.0
Accrued salaries 18.4 18.6
Other current liabilities 17.7 10.7
Estimated third-party payor settlements 22.3 17.9
-------- --------
76.9 66.2
Long-term debt 272.0 150.0
Deferred income taxes 21.7 21.0
Professional liability risks and other liabilities 21.5 16.9
Minority interests in equity of consolidated entity 4.5 5.2
Stockholders' equity:
Preferred stock -- --
Common stock 0.4 0.4
Capital in excess of par value 292.2 285.0
Unearned ESOP compensation (20.9) (22.5)
Notes receivable for shares sold to employees (5.7) (5.7)
Retained earnings 49.0 37.8
-------- --------
315.0 295.0
-------- --------
$ 711.6 $ 554.3
======== ========
LPNT Announces Second Quarter Results
Page 6
July 22, 2002
LIFEPOINT HOSPITALS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
DOLLARS IN MILLIONS
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ ------------------
2002 2001 2002 2001
------ ------ ------ ------
Cash flows from operating activities:
Net income (loss) $ (2.5) $ 6.9 $ 11.2 $ 15.5
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 9.7 8.5 19.1 16.6
ESOP expense 2.7 2.4 5.2 5.0
Minority interests in earnings of consolidated entity 0.8 0.7 1.5 1.3
Deferred income taxes (benefit) (1.2) (0.2) (0.8) (0.7)
Reserve for professional liability risk, net 2.0 2.7 5.1 4.1
Extraordinary loss on early retirement of debt 25.0 2.6 26.3 2.6
Gain on previously impaired assets -- -- -- (0.5)
Tax benefit from stock option exercises 0.3 0.7 1.0 0.7
Increase (decrease) in cash from operating assets
and liabilities, net of effects of acquisitions:
Accounts receivable 2.6 4.0 (18.2) (9.5)
Inventories and other current assets (1.7) 0.1 (3.1) 0.2
Accounts payable and accrued expenses 2.6 (4.6) 4.1 2.8
Income taxes payable (14.5) (5.6) (2.5) 3.1
Estimated third-party payor settlements (6.9) (5.4) 4.4 8.9
Other (0.5) 0.2 (0.7) 0.5
------ ------ ------ ------
Net cash provided by operating activities 18.4 13.0 52.6 50.6
Cash flows from investing activities:
Purchases of property and equipment, net (16.8) (13.2) (26.8) (22.6)
Purchase of facilities -- (5.7) -- (5.7)
Purchases of short-term investments (21.5) -- (21.5) --
Other (1.2) 4.8 (1.3) 4.8
------ ------ ------ ------
Net cash used in investing activities (39.5) (14.1) (49.6) (23.5)
Cash flows from financing activities:
Proceeds from stock offering, net -- -- -- 100.4
Repayments of bank debt -- (117.1) -- (139.3)
Repurchases of senior subordinated notes (141.7) -- (150.3) --
Proceeds from issuance of convertible notes, net 242.7 -- 242.7 --
Proceeds from exercise of stock options 1.0 1.2 2.2 1.5
Other 0.4 (0.1) 0.3 0.1
------ ------ ------ ------
Net cash provided by (used in) financing activities 102.4 (116.0) 94.9 (37.3)
Change in cash and cash equivalents 81.3 (117.1) 97.9 (10.2)
Cash and cash equivalents at beginning of period 73.8 146.6 57.2 39.7
------ ------ ------ ------
Cash and cash equivalents at end of period $155.1 $ 29.5 $155.1 $ 29.5
====== ====== ====== ======
Interest payments $ 7.8 $ 9.1 $ 8.4 $ 12.2
Income taxes paid, net $ 15.4 $ 11.8 $ 13.2 $ 11.8
-END-