EXHIBIT 99
LIFEPOINT
HOSPITALS, INC.
CONTACT: MICHAEL J. CULOTTA
SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
(615) 372-8512
LIFEPOINT HOSPITALS REPORTS 65% INCREASE
IN THIRD QUARTER 2002 EPS
BRENTWOOD, TENNESSEE (October 21, 2002) - LifePoint Hospitals, Inc. (NASDAQ:
LPNT) today announced results for the third quarter and nine months ended
September 30, 2002.
For the third quarter ended September 30, 2002, net revenues were
$182.2 million, up 22.2% from $149.2 million a year ago. Income before
extraordinary item for the quarter totaled $15.2 million, or $0.39 per diluted
share, versus net income of $7.5 million, or $0.20 per diluted share, in the
prior-year period, representing increases of 102.8% and 95.0%, respectively.
Including extraordinary items, net income for the quarter ended September 30,
2002, totaled $12.7 million, or $0.33 per diluted share, compared with net
income for the quarter ended September 30, 2001, of $7.5 million, or $0.20 per
diluted share. Earnings before interest, income taxes, depreciation,
amortization, ESOP expense, minority interest and extraordinary loss (EBITDA)
increased 33.9% to $40.5 million from $30.3 million in the same period last
year.
For the nine months ended September 30, 2002, net revenues were $541.7
million, up 19.0% from $455.1 million a year ago. Income before extraordinary
item for the nine-month period totaled $42.8 million, or $1.11 per diluted
share, versus $24.6 million, or $0.67 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 74.1% and 65.7%, respectively. During the nine months
ended September 30, 2002, the Company repurchased $147.1 million of the 10 3/4%
Senior Subordinated Notes due 2009. Including extraordinary items, net income
for the nine months ended September 30, 2002, totaled $23.9 million, or $0.65
per diluted share, compared with net income for the nine months ended September
30, 2001, of $23.0 million, or $0.63 per diluted share. Earnings before
interest, income taxes, depreciation, amortization, ESOP expense, minority
interest, gain on previously impaired asset and extraordinary loss (EBITDA)
increased 26.8% to $121.8 million from $96.1 million in the same period last
year.
Kenneth C. Donahey, chairman and chief executive officer of LifePoint
Hospitals, said, "Our hospitals continue to deliver exceptional value and
quality care to our communities. We are improving and adding services,
recruiting the necessary physicians and specialists, and maintaining our fiscal
discipline. We expect to continue our momentum throughout this year, and we look
forward to the opportunities of 2003."
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LPNT Announces Third Quarter Results
Page 2
October 21, 2002
Subsequent to the close of the third quarter, the Company completed its
acquisition of Russellville Hospital in Russellville, Alabama. Accredited by the
Joint Commission on Accreditation of Healthcare Organizations, Russellville
Hospital is a 100-bed acute care facility serving Franklin County.
Earlier this month, LifePoint purchased the remaining 30% interest in
Dodge City Healthcare Group, Inc., L.P., making it the sole owner of the joint
venture that owns the 110-bed Western Plains Regional Hospital in Dodge City,
Kansas.
A listen-only simulcast and replay of LifePoint Hospitals' third
quarter conference call will be available on-line at www.lifepointhospitals.com
and www.companyboardroom.com on October 22, 2002, beginning at 10:00 a.m.
Eastern Time.
LifePoint Hospitals, Inc. operates 24 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
capital improvements 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 the Company's liquidity
needs could change; and (xi) 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.
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LPNT Announces Third Quarter Results
Page 3
October 21, 2002
LIFEPOINT HOSPITALS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------------------------- ---------------------------------------
2002 2001 2002 2001
------------------- ------------------ ----------------- -----------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
------- ------ -------- ------ ------- ------ ------ ------
Revenues(1) $ 182.2 100.0% $ 149.2 100.0% $ 541.7 100.0% $455.1 100.0%
Salaries and benefits 71.0 39.0% 59.3 39.7% 212.6 39.3% 179.0 39.3%
Supplies 22.6 12.4% 19.0 12.7% 67.4 12.4% 57.4 12.6%
Other operating expenses(1) 35.6 19.5% 29.1 19.6% 101.1 18.6% 88.5 19.5%
Provision for
doubtful accounts 12.5 6.9% 11.5 7.7% 38.8 7.2% 34.1 7.5%
------- ------ -------- ------ ------- ------ ------ ------
141.7 77.8% 118.9 79.7% 419.9 77.5% 359.0 78.9%
------- ------ -------- ------ ------- ------ ------ ------
EBITDA 40.5 22.2% 30.3 20.3% 121.8 22.5% 96.1 21.1%
Depreciation & amortization 8.9 4.8% 8.2 5.5% 28.0 5.2% 24.8 5.4%
Interest expense, net 3.0 1.7% 4.0 2.7% 9.9 1.8% 14.2 3.1%
Gain on previously
impaired assets -- -- -- -- -- -- (0.5) (0.1)%
ESOP expense 2.2 1.2% 3.0 2.0% 7.4 1.4% 8.0 1.8%
------- ------ -------- ------ ------- ------ ------ ------
Income before minority
interests, income taxes
and extraordinary item 26.4 14.5% 15.1 10.1% 76.5 14.1% 49.6 10.9%
Minority interests 0.7 0.4% 0.6 0.4% 2.2 0.4% 1.9 0.4%
------- ------ -------- ------ ------- ------ ------ ------
Income before income taxes
and extraordinary item 25.7 14.1% 14.5 9.7% 74.3 13.7% 47.7 10.5%
Provision for income taxes 10.5 5.8% 7.0 4.7% 31.5 5.8% 23.1 5.1%
------- ------ -------- ------ ------- ------ ------ ------
Income before
extraordinary item 15.2 8.3% 7.5 5.0% 42.8 7.9% 24.6 5.4%
Extraordinary loss on early
retirement of debt, net 2.5 1.3% -- -- 18.9 3.5% 1.6 0.3%
------- ------ -------- ------ ------- ------ ------ ------
Net income $ 12.7 7.0% $ 7.5 5.0% $ 23.9 4.4% $ 23.0 5.1%
======= ====== ======== ====== ======= ====== ====== ======
Shares used in diluted
EPS (000's) 43,899 38,230 41,134 36,740
Diluted earnings per share:
Income before gain
on previously
impaired assets and
extraordinary item $ 0.39 $ 0.20 $ 1.11 $ 0.66
Gain on previously
impaired assets, net -- -- -- 0.01
Extraordinary loss on
early retirement
of debt, net (0.06) -- (0.46) (0.04)
------- -------- ------- ------
Net income(2) $ 0.33 $ 0.20 $ 0.65 $ 0.63
------- -------- ------- ------
(1) The Company recorded net adjustments to estimated third-party payor
settlements that increased revenues by $5.8 million for the third
quarter of 2002 compared with $1.1 million for the same period last
year. For the nine months ended September 30, 2002, the Company has
recorded net adjustments to estimated third-party payor settlements that
increased revenues by $7.9 million compared with $1.9 million for the
same period last year. The net adjustments to estimated settlements are
primarily related to the favorable settlement of a Kentucky Medicaid
rate appeal for $5.0 million, which is offset by related expenses of
$0.9 million and included in other operating expenses.
(2) 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,
resulting in a $0.03 decrease in net income per diluted share from $0.65
to $0.62 for the nine months ended September 30, 2002, but no change in
net income per diluted share for the three months ended September 30,
2002.
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LPNT Announces Third Quarter Results
Page 4
October 21, 2002
LIFEPOINT HOSPITALS, INC.
UNAUDITED STATISTICS
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------------------- -----------------------------------
% %
2002 2001 CHANGE 2002 2001 CHANGE
--------- -------- ------ -------- -------- ------
ACTUAL:
Number of hospitals at end of period 23 21 9.5% 23 21 9.5%
Licensed beds at end of period 2,196 1,963 11.9% 2,196 1,963 11.9%
Weighted average licensed beds 2,191 1,963 11.6% 2,195 1,974 11.2%
Average daily census 799 740 8.0% 853 783 8.9%
Average length of stay 4.0 4.0 --% 4.1 4.0 2.5%
Revenues ($ in millions) $ 182.2(2) $ 149.2 22.2% $ 541.7(3) $ 455.1 19.0%
Revenues per equivalent admission $ 5,049 $ 4,774 5.8% $ 4,934 $ 4,756 3.7%
Equivalent admissions(1) 36,097 31,248 15.5% 109,799 95,702 14.7%
Outpatient factor(1) 1.97 1.85 6.6% 1.91 1.81 5.7%
Outpatient surgeries 16,233 14,387 12.8% 48,478 42,192 14.9%
Inpatient surgeries 5,513 4,832 14.1% 16,897 14,733 14.7%
Emergency room visits 89,841 79,145 13.5% 262,931 232,919 12.9%
Admissions 18,297 16,875 8.4% 57,396 52,903 8.5%
Net outpatient revenues as a
percentage of net revenues 51.4% 49.4% N/A 50.1% 47.6% N/A
SAME-HOSPITAL(4):
Number of hospitals at end of period 21 21 -- % 21 21 -- %
Licensed beds at end of period 1,962 1,963 (0.1)% 1,962 1,963 (0.1)%
Weighted average licensed beds 1,962 1,963 (0.1)% 1,961 1,974 (0.7)%
Average daily census 738 740 (0.3)% 783 783 -- %
Average length of stay 4.0 4.0 -- % 4.0 4.0 -- %
Revenues ($ in millions) $ 169.7(2) $ 149.3 13.7% $ 499.2(3) $ 455.0 9.7%
Revenues per equivalent admission $ 5,175 $ 4,776 8.4% $ 5,024 $ 4,754 5.7%
Equivalent admissions(1) 32,795 31,248 5.0% 99,362 95,702 3.8%
Outpatient factor(1) 1.94 1.85 4.6% 1.88 1.81 4.0%
Outpatient surgeries 15,332 14,387 6.6% 45,439 42,192 7.7%
Inpatient surgeries 5,128 4,832 6.1% 15,613 14,733 6.0%
Emergency room visits 80,997 79,145 2.3% 237,673 232,919 2.0%
Admissions 16,930 16,875 0.3% 52,796 52,903 (0.2)%
(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 $20.4 million over the
prior year period, 2001 acquisitions increased the growth in actual
revenues by $12.6 million.
(3) In addition to same-hospital revenue growth of $44.2 million over the
prior year period, 2001 acquisitions increased the growth in actual
revenues by $42.4 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.
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LPNT Announces Third Quarter Results
Page 5
October 21, 2002
LIFEPOINT HOSPITALS, INC.
CONSOLIDATED BALANCE SHEETS
DOLLARS IN MILLIONS
SEPTEMBER 30, DECEMBER 31,
2002 2001
------------ ------------
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $ 183.8 $ 57.2
Accounts receivable, net 71.5 56.7
Inventories 17.0 16.3
Deferred income taxes and other current assets 20.1 18.7
-------- --------
292.4 148.9
Property and equipment:
Land 10.7 10.7
Buildings and improvements 270.0 262.0
Equipment 281.6 263.4
Construction in progress 22.4 7.2
-------- --------
584.7 543.3
Accumulated depreciation (231.0) (204.9)
-------- --------
353.7 338.4
Deferred loan costs, net 9.1 7.1
Goodwill 47.9 47.1
Other 12.6 12.8
-------- --------
$ 715.7 $ 554.3
======== ========
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 20.8 $ 19.0
Accrued salaries 20.9 18.6
Other current liabilities 19.6 10.7
Estimated third-party payor settlements 15.3 17.9
-------- --------
76.6 66.2
Long-term debt 252.9 150.0
Deferred income taxes 22.2 21.0
Professional liability risks and other liabilities 23.8 16.9
Minority interests in equity of consolidated entity 4.7 5.2
Stockholders' equity:
Preferred stock -- --
Common stock 0.4 0.4
Capital in excess of par value 294.0 285.0
Unearned ESOP compensation (20.1) (22.5)
Notes receivable for shares sold to employees (0.5) (5.7)
Retained earnings 61.7 37.8
-------- --------
335.5 295.0
-------- --------
$ 715.7 $ 554.3
======== ========
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LPNT Announces Third Quarter Results
Page 6
October 21, 2002
LIFEPOINT HOSPITALS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
DOLLARS IN MILLIONS
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------- -----------------------
2002 2001 2002 2001
---------- ---------- ---------- ---------
Cash flows from operating activities:
Net income $ 12.7 $ 7.5 $ 23.9 $ 23.0
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 8.9 8.2 28.0 24.8
ESOP expense 2.2 3.0 7.4 8.0
Minority interests in earnings of consolidated entity 0.7 0.6 2.2 1.9
Deferred income taxes (benefit) 1.4 1.3 0.6 0.6
Reserve for professional liability risk, net 2.4 2.2 7.5 6.3
Extraordinary loss on early retirement of debt 4.2 -- 30.5 2.6
Gain on previously impaired assets -- -- -- (0.5)
Tax benefit from stock option exercises 0.3 7.4 1.3 8.1
Increase (decrease) in cash from operating assets
and liabilities, net of effects of acquisitions:
Accounts receivable 3.4 0.7 (14.8) (8.8)
Inventories and other current assets 1.7 (0.2) (1.4) --
Accounts payable and accrued expenses 7.5 11.6 11.6 14.4
Income taxes payable 2.4 (1.9) (0.1) 1.2
Estimated third-party payor settlements (7.0) (0.2) (2.6) 8.7
Other 0.5 0.8 (0.2) 1.3
-------- ---------- ---------- ---------
Net cash provided by operating activities 41.3 41.0 93.9 91.6
Cash flows from investing activities:
Purchases of property and equipment, net (15.4) (5.9) (42.2) (28.5)
Purchase of facilities -- (0.1) -- (5.8)
Maturities of short-term investments 21.5 -- -- --
Other (0.9) (0.5) (2.2) 4.3
-------- ---------- ---------- ---------
Net cash provided by (used in) investing activities 5.2 (6.5) (44.4) (30.0)
Cash flows from financing activities:
Proceeds from stock offering, net -- -- -- 100.4
Repayments of bank debt -- -- -- (139.3)
Repurchases of senior subordinated notes (22.8) -- (173.1) --
Proceeds from issuance of convertible notes, net (0.2) -- 242.5 --
Proceeds from exercise of stock options 0.2 10.5 2.4 12.0
Proceeds from employee loans 5.2 -- 5.2 --
Other (0.2) (1.0) 0.1 (0.9)
-------- ---------- ---------- ---------
Net cash (used in) provided by financing activities (17.8) 9.5 77.1 (27.8)
Change in cash and cash equivalents 28.7 44.0 126.6 33.8
Cash and cash equivalents at beginning of period 155.1 29.5 57.2 39.7
-------- ---------- ---------- ---------
Cash and cash equivalents at end of period $ 183.8 $ 73.5 $ 183.8 $ 73.5
======== ========== ========== =========
Interest payments $ 0.6 $ -- $ 9.0 $ 12.2
Income taxes paid, net $ 5.0 $ 0.2 $ 18.2 $ 12.0
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