EXHIBIT 99.1
[PROVINCE HEALTHCARE LOGO] NEWS RELEASE
FOR IMMEDIATE RELEASE
CONTACT: MERILYN H. HERBERT
VICE PRESIDENT,
INVESTOR RELATIONS
(615) 370-1377
PROVINCE HEALTHCARE REPORTS SECOND QUARTER RESULTS
Brentwood, TN, July 30, 2003 - Province Healthcare Company (NYSE:PRV)
today announced results consistent with its previously disclosed expectations
for its second quarter ended June 30, 2003. Diluted earnings per share (EPS)
for the quarter were $0.20, compared with $0.22 in the prior year's second
quarter.
Net operating revenues for the second quarter of 2003 increased 12.5%
to $195.8 million compared with $174.0 million in the same quarter of last
year. Earnings before interest, income taxes, depreciation, amortization, loss
on sale of assets, loss on extinguishment of debt and minority interest
("Adjusted EBITDA") were $32.9 million compared with $32.6 million in last
year's second quarter. Net income for the quarter was $9.7 million, compared
with last year's net income of $11.0 million. Excluding the net loss from the
early extinguishment of debt, net income was $9.9 million. Cash flow from
operations exceeded expectations for the second quarter and totaled $19.3
million, after $7.0 million in semi-annual interest payments on the Convertible
Subordinated Notes and a $10.0 million Federal income tax payment related to
first and second quarter operating results. Accounts receivable days
outstanding stood at 54 days at June 30, 2003.
Net operating revenues for the first six months of 2003 increased
14.9% to $390.2 million compared with $339.6 million in the same period of
2002. Adjusted EBITDA increased to $64.5 million from $63.9 million in the
previous year. Net income for the first half of 2003 was $19.5 million or $0.40
per diluted share, compared with last year's $0.45 per diluted share on net
income of $22.6 million. Excluding the net loss from the early extinguishment
of debt, net income for the first six months of 2003 was $19.8 million, or
$0.40 per diluted share.
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PAGE TWO
Province ended the second quarter of 2003 with 20 owned or leased
hospitals, of which 18 are same-store hospitals. Excluded from same-store
results are Memorial Hospital of Martinsville and Henry County in Martinsville,
Virginia, acquired on May 1, 2002, and Los Alamos Medical Center in Los Alamos,
New Mexico, acquired on June 1, 2002.
While same-store adjusted admissions increased 1.4%, quarter over
quarter, total same-store admissions improved more quickly than expected,
decreasing 0.7%, and only 0.3% after adjusting for units closed in 2002. In
addition, on a same-store basis, net patient service revenue increased 4.6%,
quarter over quarter, and gross outpatient revenue increased 15.1%.
The Company previously announced on May 28, 2003, completion of a
public offering of 7 1/2% Senior Subordinated Notes due 2013. The Company sold
an aggregate of $200.0 million principal amount of the notes at 100% of par.
Net proceeds of the offering were used by the Company to repay $114.3 million
in existing indebtedness under its bank senior credit facility and to
repurchase approximately $69.0 million of the Company's outstanding 4 1/2%
Convertible Subordinated Notes due 2005 in privately negotiated transactions.
Subsequent to quarter end, the Company repurchased an additional $5.0 million
of the 4 1/2% Convertible Subordinated Notes, reducing the outstanding balance
of the 2005 Notes to approximately $76.0 million. In May, the Company announced
that, subject to market conditions, it might repurchase additional outstanding
2005 Notes from time to time at market prices in open market or in privately
negotiated transactions.
Martin S. Rash, Chairman and Chief Executive Officer of Province
Healthcare, said, "Our second quarter results exceeded our expectations, with
same-store net patient service revenue increasing 4.6%, same-store surgeries
actually increasing, and same-store adjusted admissions increasing 1.4%. We
continue to see the positive impact of the large number of physicians recruited
in 2002, evidenced by the substantial increases in our outpatient business.
With 74 physicians already recruited for this year, we anticipate that positive
trends will continue. We expect to continue to reduce the Company's
indebtedness and/or re-enter the acquisition market during the remainder of
2003. We will accomplish this with approximately $250 million available on our
bank credit line, approximately $19.1 million currently in cash, and expected
cash from operations."
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PAGE THREE
A listen-only simulcast, as well as a 30-day replay, of Province
Healthcare's second quarter conference call will be available on-line at
www.prhc.net on July 31, 2003, beginning at 10:00 a.m. Eastern Daylight Time.
The Company owns or leases 20 general acute care hospitals in 13
states with a total of 2,281 licensed beds. The Company also provides
management services to 38 non-urban hospitals in 14 states with a total of
3,130 licensed beds.
Certain statements contained in this release, constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements may include projections of
revenues, income or loss, capital expenditures, capital structure, or other
financial items, statements regarding the plans and objectives of management
for future operations, statements of future economic performance, statements of
the assumptions underlying or relating to any of the foregoing statements, and
other statements which are other than statements of historical fact. These
statements are based on current estimates of future events, and the Company has
no obligation to update or correct these estimates unless considered material
to the Company. Forward-looking statements involve known and unknown risks and
uncertainties which may cause the Company's actual results in future periods to
differ materially from forecasted results. Those risks include, among others,
risks associated with general economic and business conditions, the effect of
future governmental regulations, changes in reimbursement levels by government
programs, including Medicare and Medicaid or other third party payors, the
Company's continued ability to recruit and retain physicians and the Company's
ability to successfully complete and integrate acquisitions. Those and other
risks are described in the Company's reports and filings with the Securities
and Exchange Commission.
CONTACT: Merilyn H. Herbert, Province Healthcare Company (PRV) at (615)
370-1377
- TABLES TO FOLLOW -
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
June 30, December 31,
2003 2002(*)
----------- ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 19,053 $ 14,417
Accounts receivable, less allowance for doubtful accounts
of $59,773 in 2003 and $68,158 in 2002 117,972 117,431
Inventories 19,371 19,835
Prepaid expenses and other 17,737 14,071
----------- -----------
174,133 165,754
Property and equipment, net 460,097 447,379
Goodwill 318,014 319,390
Unallocated purchase price 3,153 466
Other assets 45,956 38,722
----------- -----------
$ 1,001,353 $ 971,711
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 23,866 $ 20,162
Accrued salaries and benefits 26,718 25,380
Accrued expenses 15,492 13,198
Current portion of long-term debt 1,831 1,668
----------- -----------
67,907 60,408
Long-term debt, less current portion 456,659 461,576
Other liabilities 40,324 33,913
Minority interests 2,709 2,612
Stockholders' equity:
Preferred stock - $0.01 par value, 100,000 shares
authorized, none issued and outstanding -- --
Common stock - $0.01 par value; 150,000,000 shares
authorized at June 30, 2003 and December 31, 2002, issued and outstanding
48,725,504 shares and 48,581,549 shares at June 30, 2003 and
December 31, 2002, respectively 487 486
Additional paid-in-capital 305,336 304,102
Retained earnings 129,080 109,567
Accumulated other comprehensive loss (1,149) (953)
----------- -----------
Total stockholders' equity 433,754 413,202
----------- -----------
$ 1,001,353 $ 971,711
=========== ===========
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(*) Derived from the audited consolidated financial statements of Province
and its subsidiaries, contained in the Company's Annual Report on Form
10-K, filed with the Securities and Exchange Commission on March 24,
2003.
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended June 30,
------------------------------------
2003 2002
------------ ------------
Revenue:
Net patient service revenue $ 189,649 $ 168,234
Other 6,164 5,766
------------ ------------
Net operating revenue 195,813 174,000
Expenses:
Salaries, wages and benefits 74,939 67,476
Purchased services 18,878 18,209
Supplies 23,859 20,465
Provision for doubtful accounts 17,789 12,753
Other operating expenses 25,007 20,304
Rentals and leases 2,423 2,200
------------ ------------
162,895 141,407
------------ ------------
Adjusted EBITDA (*) 32,918 32,593
Depreciation and amortization 9,499 8,752
Interest expense 6,759 5,545
Minority interests 82 (3)
Loss on sale of assets -- 48
Loss on early extinguishment of debt 477 --
------------ ------------
Income before provision for income taxes 16,101 18,251
Income taxes 6,440 7,300
------------ ------------
Net income $ 9,661 $ 10,951
============ ============
Net income per common share:
Basic $ 0.20 $ 0.23
============ ============
Diluted $ 0.20 $ 0.22
============ ============
Weighted average common shares:
Basic 48,585,000 47,901,000
Diluted 49,032,000 61,671,000
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(*) Adjusted EBITDA for 2003 and 2002, represents income before provision
for income taxes, depreciation and amortization, interest, minority
interests, loss on sale of assets and loss on extinguishment of debt.
Adjusted EBITDA serves as a measure of leverage capacity and debt
service ability, and is commonly used as an analytical indicator
within the healthcare industry. Adjusted EBITDA, however, 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. Because Adjusted EBITDA is not a measurement
determined in accordance with accounting principles generally accepted
in the United States and is susceptible to varying calculations,
Adjusted EBITDA as presented may not be comparable to other similarly
titled measures of other companies.
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Six Months Ended June 30,
----------------------------------
2003 2002
----------- -----------
Revenue:
Net patient service revenue $ 377,208 $ 328,014
Other 13,005 11,587
----------- -----------
Net operating revenue 390,213 339,601
Expenses:
Salaries, wages and benefits 150,269 129,628
Purchased services 36,662 35,300
Supplies 48,606 40,210
Provision for doubtful accounts 34,982 27,491
Other operating expenses 50,294 38,700
Rentals and leases 4,856 4,352
----------- -----------
325,669 275,681
----------- -----------
Adjusted EBITDA (*) 64,544 63,920
Depreciation and amortization 18,777 16,333
Interest expense 12,619 9,740
Minority interests 149 56
Loss on sale of assets 2 53
Loss on early extinguishment of debt 477 --
----------- -----------
Income before provision for income taxes 32,520 37,738
Income taxes 13,008 15,095
----------- -----------
Net income $ 19,512 $ 22,643
=========== ===========
Net income per common share:
Basic $ 0.40 $ 0.47
=========== ===========
Diluted $ 0.40 $ 0.45
=========== ===========
Weighted average common shares:
Basic 48,633,000 47,726,000
Diluted 48,895,000 61,395,000
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See accompanying footnotes on previous page.
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
SELECTED OPERATING STATISTICS (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Actual Same Store(1)
Three Months Ended Three Months Ended
June 30, June 30,
----------------------------- -----------------------------
2003 2002 2003 2002
-------- -------- -------- --------
CONSOLIDATED HOSPITALS:
Number of hospitals at end of period 20 20 18 18
Licensed beds at end of period 2,281 2,315 1,997 2,031
Beds in service at end of period 1,993 1,905 1,794 1,706
Inpatient admissions 18,520 17,849 16,322 16,436
Adjusted admissions (2) 33,501 31,156 28,600 28,216
Patient days 78,124 76,425 68,735 70,535
Adjusted patient days (3) 141,331 133,444 120,439 121,117
Average length of stay (days) 4.2 4.3 4.2 4.3
Net patient service revenue $189,649 $168,234 $157,671 $150,673
Gross revenue:
Inpatient $234,130 $204,689 $210,996 $192,381
Outpatient 189,354 152,542 158,715 137,897
-------- -------- -------- --------
$423,484 $357,231 $369,711 $330,278
======== ======== ======== ========
NET PATIENT REVENUE BY PAYOR:
Medicare 39.0% 40.4% 40.2% 42.3%
Medicaid 10.9 11.0 12.6 11.4
Other 50.1 48.6 47.2 46.3
-------- -------- -------- --------
Total 100.0% 100.0% 100.0% 100.0%
======== ======== ======== ========
Three Months Ended
June 30,
--------------------------
2003 2002
------- -------
DILUTED EARNINGS PER SHARE CALCULATION:
Net income $ 9,661 $10,951
Add convertible notes interest, net of tax (4) -- 2,434
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Adjusted net income $ 9,661 $13,385
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Basic shares plus stock options 49,032 49,772
Convertible shares (4) -- 11,899
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Diluted shares outstanding 49,032 61,671
======= =======
Diluted earnings per share $ 0.20 $ 0.22
======= =======
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(1) Represents eighteen hospitals owned or leased during both periods.
(2) Used by management and investors as a general measure of combined
inpatient and outpatient volume. Adjusted admissions are computed by
multiplying admissions (inpatient volume) by the outpatient factor.
The outpatient factor is the sum of gross inpatient revenue and gross
outpatient revenue divided by gross inpatient revenue. The adjusted
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.
(3) Adjusted patient days are computed by multiplying patient days
(inpatient volume) by the outpatient factor. The outpatient factor is
the sum of gross inpatient revenue and gross outpatient revenue
divided by gross inpatient revenue. The adjusted patient days
computation equates outpatient revenue to the volume measure (patient
days) used to measure inpatient volume, resulting in a general measure
of combined inpatient and outpatient volume.
(4) The Company's two outstanding series of convertible notes are
anti-dilutive for the three and six months ended June 30, 2003, and
thus, are not included in the diluted earnings per share calculation
for such periods.
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
SELECTED OPERATING STATISTICS (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Actual Same Store(1)
Six Months Ended Six Months Ended
June 30, June 30,
----------------------------- -----------------------------
2003 2002 2003 2002
-------- -------- -------- --------
CONSOLIDATED HOSPITALS:
Number of hospitals at end of period 20 20 18 18
Licensed beds at end of period 2,281 2,315 1,997 2,031
Beds in service at end of period 1,993 1,905 1,794 1,706
Inpatient admissions 38,288 35,848 33,863 34,435
Adjusted admissions (2) 68,193 60,253 58,371 57,313
Patient days 162,256 156,754 142,941 150,894
Adjusted patient days (3) 289,014 263,340 246,406 251,013
Average length of stay (days) 4.2 4.4 4.2 4.4
Net patient service revenue $377,208 $328,014 $313,276 $310,309
Gross revenue:
Inpatient $476,192 $420,078 $429,791 $407,770
Outpatient 372,143 285,409 311,318 270,764
-------- -------- -------- --------
$848,335 $705,487 $741,109 $678,534
======== ======== ======== ========
NET PATIENT REVENUE BY PAYOR:
Medicare 38.8% 41.9% 39.8% 42.9%
Medicaid 11.2 12.5 12.9 12.8
Other 50.0 45.6 47.3 44.3
-------- -------- -------- --------
Total 100.0% 100.0% 100.0% 100.0%
======== ======== ======== ========
Six Months Ended June 30,
--------------------------
2003 2002
------- -------
DILUTED EARNINGS PER SHARE CALCULATION:
Net income $19,512 $22,643
Add convertible notes interest, net of tax (4) -- 4,841
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Adjusted net income $19,512 $27,484
======= =======
Basic shares plus stock options 48,895 49,496
Convertible shares (4) -- 11,899
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Diluted shares outstanding 48,895 61,395
======= =======
Diluted earnings per share $ 0.40 $ 0.45
======= =======
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See accompanying footnotes on previous page.