EXHIBIT 99.1
[IASIS HEALTHCARE LOGO]
INVESTOR CONTACT: NEWS MEDIA CONTACT:
David R. White Tomi Galin
Chairman and Chief Executive Officer Vice-President, Marketing
or & Communications
W. Carl Whitmer (615) 467-1255
Chief Financial Officer
(615) 844-2747
IASIS HEALTHCARE ANNOUNCES
FIRST QUARTER RESULTS
NET REVENUE INCREASES 15.3%
FRANKLIN, Tennessee (February 4, 2003) -- IASIS Healthcare(R) Corporation today
announced results for the first fiscal quarter ended December 31, 2002.
Net revenue for the quarter ended December 31, 2002, increased 15.3% to
$254.8 million compared with $220.9 million in the same quarter of last year.
Earnings before interest expense, gain on sale of assets, minority interests,
income taxes and depreciation and amortization (EBITDA) for the first quarter
increased 30.2% to $33.2 million compared with $25.5 million in the prior year
period. Net earnings were $7.5 million for the quarter ended December 31, 2002,
compared with $300,000 in the same period of last year, excluding the cumulative
effect of a change in accounting principle related to the adoption of SFAS No.
142.
In commenting on the quarterly results, David R. White, chairman and
chief executive officer of IASIS, said, "The operating results of the first
quarter of fiscal year 2003 reflect the fourth consecutive quarter of net
revenue and EBITDA growth over the prior year periods. Our emphasis on
profitable product lines, operational efficiencies and increasing volume has
been the driving force behind these results. This emphasis has also allowed
management to identify a number of growth initiatives at our existing hospitals
that will position the Company for continued success."
Acute Care Service Segment - Net revenue for the acute care service
segment for the quarter ended December 31, 2002, increased 16.0% to $217.8
million compared with net revenue of $187.7 million in the same prior year
period. EBITDA for the quarter ended December 31, 2002, increased 28.8% to $31.3
million compared with $24.3 million in the same prior year period.
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IASIS Healthcare Announces First Quarter Results
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February 4, 2003
Same facility net patient revenue per adjusted admission increased by
6.9% for the quarter ended December 31, 2002, compared with the same prior year
period. Same facility hospital admissions and adjusted admissions for the
quarter ended December 31, 2002, increased over the prior year period by 8.0%
and 9.8%, respectively.
Health Insurance Business Segment - Net revenue for Health Choice, the
Medicaid health plan in the Company's Phoenix, Arizona market, for the quarter
ended December 31, 2002, increased 11.1% to $36.9 million compared with $33.2
million in the same prior year period. Enrollment at Health Choice increased
11.9% from 53,833 members at December 31, 2001, to 60,242 members at December
31, 2002. Health Choice EBITDA for the quarter ended December 31, 2002, was $1.8
million compared with $1.1 million for the same prior year period.
The Company sold two of its surgery centers during the quarter ended
December 31, 2002, for net proceeds of $2.8 million, resulting in a gain on the
sales of approximately $780,000.
As previously reported, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets," in
the prior fiscal year. As a result, the Company recorded a non-cash reduction to
goodwill of $39.5 million as of October 1, 2001. The reduction to goodwill was
reflected as a cumulative effect of a change in accounting principle and had no
impact on the Company's EBITDA or cash flow.
At December 31, 2002, the Company's net working capital was $65.1
million compared with $57.0 million at September 30, 2002. Net accounts
receivable increased $1.2 million from $154.5 million at September 30, 2002, to
$155.7 million at December 31, 2002, and amounted to 59 days of net revenue
outstanding at December 31, 2002, compared with 60 days at September 30, 2002,
excluding Medicare settlement accounts. Cash flows from operating activities for
the quarter ended December 31, 2002, was $8.3 million compared with $1.5 million
in the same quarter of last year. The Company had $29.5 million outstanding
under its revolving credit facility at December 31, 2002, compared with $18.0
million at September 30, 2002.
The Company is in the process of refinancing its existing senior
secured credit facility with a new $475 million senior credit facility. The new
credit facility will consist of a $125 million, five-year revolving credit
facility and a $350 million, six-year term loan. As of December 31, 2002, $353
million was outstanding under the Company's existing senior credit facility.
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February 4, 2003
The terms of the new agreement will reduce the Company's current
mandatory principal repayments and provide for additional annual capital
expenditure amounts as compared with the existing senior credit facility, among
other matters. Closing of the new credit facility, which is subject to
documentation and closing conditions, is expected to be completed in February.
A listen-only simulcast and 30-day replay of IASIS Healthcare
Corporation's year-end conference call will be available through the Company's
website at www.iasishealthcare.com beginning at 11:00 a.m. Eastern Time on
February 4, 2003.
IASIS Healthcare(R) Corporation, located in Franklin, Tenn., is a
leading owner and operator of acute care hospitals and develops and operates
networks of medium-sized hospitals in high-growth urban and suburban markets.
The Company operates its hospitals with a strong community focus by offering and
developing healthcare services to meet the needs of the markets it serves,
promoting strong relationships with physicians and working with local managed
care plans. Currently, IASIS Healthcare(R) owns or leases 14 hospitals with a
total of 2,116 beds in service. These hospitals are located in four regions:
Salt Lake City, UT; Phoenix, AZ; Tampa-St. Petersburg, FL; and three cities in
the state of Texas, including San Antonio. IASIS Healthcare(R) also operates
three ambulatory surgery centers and a Medicaid health plan that currently
serves over 60,000 members in Arizona. For more information on IASIS
Healthcare(R) Corporation, please visit the Company's website at
www.iasishealthcare.com
This press release contains forward-looking statements within the
meaning of the federal securities laws, which are intended to be covered by the
safe harbors created thereby. These forward-looking statements include all
statements that are not historical statements of fact and those regarding our
intent, belief or expectations including, but not limited to, the discussions of
our operating and growth strategy (including possible acquisitions and
dispositions), projections of revenue, income or loss, and future operations.
Forward-looking statements involve risks and uncertainties including, without
limitation, those associated with our ability to enter into favorable contracts
with managed care plans; the highly competitive nature of the healthcare
industry; possible changes in Medicare and Medicaid reimbursement levels and
other federal or state healthcare reforms; future cost containment initiatives
undertaken by purchasers of healthcare services; our ability to attract and
retain qualified management and personnel, including physicians and nurses; our
ability to service our significant indebtedness; the effect of existing and
future governmental regulations, including the Balanced Budget Act of 1997, the
Balanced Budget Refinement Act of 1999 and the Benefits Improvement Protection
Act of 2000; the impact of possible governmental investigations; our ability to
successfully integrate our management information systems at our hospitals; our
limited operating history; our ability to successfully manage the risks of our
Medicaid managed care plan, Health Choice; our ability to successfully complete
and integrate acquisitions of other companies or facilities; general economic
and business conditions; and those risks, uncertainties and other matters
detailed in our Annual Report on Form 10-K for the fiscal year ended September
30, 2002, and from time to time in our filings with the Securities and Exchange
Commission.
Although we believe that the assumptions underlying the forward-looking
statements contained in this press release are reasonable, any of these
assumptions could prove to be inaccurate, and, therefore, there can be no
assurance that the forward-looking statements included in this press release
will prove to be accurate. In light of the significant uncertainties inherent in
the forward-looking statements included herein, you should not regard the
inclusion of such information as a representation by the Company or any other
person that our objectives and plans will be achieved. We undertake no
obligation to publicly release any revisions to any forward-looking statements
contained herein to reflect events and circumstances occurring after the date
hereof or to reflect the occurrence of unanticipated events.
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IASIS Healthcare Announces First Quarter Results
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February 4, 2003
IASIS HEALTHCARE CORPORATION
CONDENSED AND CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS)
THREE MONTHS ENDED
DECEMBER 31,
-----------------------
2002 2001
--------- ---------
Net revenue $ 254,765 $ 220,881
Cost and expenses:
Salaries and benefits 88,799 77,727
Supplies 35,683 31,293
Other operating expenses 77,414 69,596
Provision for bad debts 19,711 16,774
Interest, net 13,317 14,503
Depreciation and amortization 12,851 10,488
--------- ---------
Total costs and expenses 247,775 220,381
--------- ---------
Earnings before gain on sale of assets, minority interests, income
taxes and cumulative effect of a change in accounting principle 6,990 500
Gain on sale of assets, net 780 12
Minority interests (278) (223)
--------- ---------
Earnings before income taxes and cumulative effect of a change
in accounting principle 7,492 289
Income tax expense -- --
--------- ---------
Net earnings before cumulative effect of a change in accounting principle 7,492 289
Cumulative effect of a change in accounting principle -- (39,497)
--------- ---------
Net earnings (loss) $ 7,492 $ (39,208)
========= =========
EBITDA $ 33,158 $ 25,491
========= =========
EBITDA margin 13.0% 11.5%
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IASIS HEALTHCARE CORPORATION
CONDENSED AND CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE AMOUNTS)
<Table>
DEC. 31, SEPT. 30,
2002 2002
----------- ---------
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $ -- $ --
Accounts receivable, net of allowance for doubtful
accounts of $39,520 and $34,450, respectively 155,665 154,452
Inventories 24,065 23,909
Prepaid expenses and other current assets 15,448 15,697
Assets held for sale 22,106 22,106
--------- ---------
Total current assets 217,284 216,164
Property and equipment, net 405,446 402,171
Goodwill 252,204 252,397
Other assets, net 27,737 27,751
--------- ---------
Total assets $ 902,671 $ 898,483
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 46,286 $ 51,920
Salaries and benefits payable 19,643 16,692
Accrued interest payable 9,670 15,016
Medical claims payable 30,333 30,262
Other accrued expenses and other current liabilities 16,172 19,023
Current portion of long-term debt and capital lease obligations 30,041 26,252
--------- ---------
Total current liabilities 152,145 159,165
Long-term debt and capital lease obligations 560,975 556,691
Other long-term liabilities 23,337 22,347
Minority interest 3,178 4,736
--------- ---------
Total liabilities 739,635 742,939
Stockholders' equity:
Preferred stock - $0.01 par value, authorized 5,000,000 shares;
no shares issued and outstanding at December 31, 2002
and September 30, 2002 -- --
Common stock - $0.01 par value, authorized 100,000,000 shares;
31,984,779 shares issued and 31,955,863 shares outstanding at
December 31, 2002 and September 30, 2002 320 320
Nonvoting common stock - $0.01 par value, authorized 10,000,000
shares; no shares issued and outstanding at December 31, 2002
and September 30, 2002 -- --
Additional paid-in capital 450,718 450,718
Treasury stock, at cost, 16,306,541 shares at December 31, 2002
and September 30, 2002 (155,300) (155,300)
Accumulated deficit (132,702) (140,194)
--------- ---------
Total stockholders' equity 163,036 155,544
--------- ---------
Total liabilities and stockholders' equity $ 902,671 $ 898,483
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IASIS HEALTHCARE CORPORATION
CONDENSED AND CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
THREE MONTHS ENDED
DECEMBER 31,
-----------------------
2002 2001
--------- ---------
Cash flows from operating activities:
Net earnings (loss) $ 7,492 $ (39,208)
Adjustments to reconcile net earnings (loss) to
net cash provided by operating activities:
Depreciation and amortization 12,851 10,488
Minority interests 278 223
Cumulative effect of a change in accounting principle -- 39,497
Gain on sale of assets (780) (12)
Changes in operating assets and liabilities, net of disposals:
Accounts receivable (1,069) 712
Inventories, prepaid expenses and other current assets (1,041) (4,522)
Accounts payable and other accrued liabilities (9,471) (5,646)
--------- ---------
Net cash provided by operating activities 8,260 1,532
--------- ---------
Cash flows from investing activities:
Purchases of property and equipment (14,415) (6,945)
Purchase of real estate -- (55,338)
Proceeds from sale of assets 2,463 12
Change in other assets (861) (1,900)
--------- ---------
Net cash used in investing activities (12,813) (64,171)
--------- ---------
Cash flows from financing activities:
Proceeds from issuance of common stock -- 222
Proceeds from senior bank debt borrowings 62,200 94,600
Payment of debt and capital leases (57,347) (35,914)
Debt financing costs incurred -- (2,325)
Distribution of minority interests (300) --
--------- ---------
Net cash provided by financing activities 4,553 56,583
--------- ---------
Decrease in cash and cash equivalents -- (6,056)
Cash and cash equivalents at beginning of period -- 6,056
--------- ---------
Cash and cash equivalents at end of period $ -- $ --
========= =========
Supplemental disclosure of cash flow information:
Cash paid for interest $ 18,720 $ 22,931
========= =========
Cash paid for income taxes $ -- $ --
========= =========
Supplemental schedule of noncash investing and financing activities:
Capital lease obligations incurred to acquire equipment $ 3,318 $ --
========= =========
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IASIS HEALTHCARE CORPORATION
SEGMENT INFORMATION (UNAUDITED)
(IN THOUSANDS)
THREE MONTHS ENDED
DECEMBER 31,
-----------------------
2002 2001
--------- ---------
ACUTE CARE SERVICE:
Net patient revenue $ 219,725 $ 189,148
Revenue between segments (1,908) (1,437)
--------- ---------
Net revenue 217,817 187,711
Salaries and benefits 87,243 76,488
Supplies 35,561 31,193
Other operating expenses 43,975 38,909
Provision for bad debts 19,711 16,774
--------- ---------
EBITDA 31,327 24,347
Interest expense, net 13,317 14,551
Depreciation and amortization 12,818 10,459
Gain on sale of assets, net (780) (12)
--------- ---------
Earnings (loss) before minority interests, income taxes
and cumulative effect of a change in accounting principle 5,972 (651)
Minority interests 278 223
--------- ---------
Earnings (loss) before income taxes and cumulative
effect of a change in accounting principle $ 5,694 $ (874)
========= =========
Segment assets $ 900,221 $ 904,763
========= =========
HEALTH CHOICE:
Capitation premiums and other payments $ 36,948 $ 33,170
Revenue between segments -- --
--------- ---------
Net revenue 36,948 33,170
Salaries and benefits 1,556 1,239
Supplies 122 100
Other operating expenses 33,439 30,687
Provision for bad debts -- --
--------- ---------
EBITDA 1,831 1,144
Interest income -- (48)
Depreciation and amortization 33 29
--------- ---------
Earnings before minority interests, income taxes
and cumulative effect of a change in accounting principle 1,798 1,163
Minority interests -- --
--------- ---------
Earnings before income taxes and cumulative
effect of a change in accounting principle $ 1,798 $ 1,163
========= =========
Segment assets $ 2,450 $ 15,760
========= =========
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IASIS HEALTHCARE CORPORATION
FINANCIAL AND OPERATING DATA (UNAUDITED)
THREE MONTHS ENDED
DECEMBER 31,
---------------------
2002 2001
------- -------
Number of hospitals at end of period 14 14
Licensed beds at end of period 2,590 2,520
Beds in service at end of period 2,116 2,092
Average length of stay (days) 4.40 4.18
Occupancy rates for same facilities (average beds in service) 45.3% 40.3%
Admissions 20,034 18,558
Same facility % change 8.0%
Adjusted admissions 34,098 31,065
Same facility % change 9.8%
Patient days 88,148 77,492
Adjusted patient days 143,302 126,415
Outpatient revenue as a % of gross patient revenue 38.1% 39.1%
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