Exhibit 99.1
IASIS Healthcare Announces Second Quarter Results
FRANKLIN, Tenn.--(BUSINESS WIRE)--May 2, 2003--IASIS Healthcare(R)
Corporation today announced results for the second fiscal quarter and
six months ended March 31, 2003.
Net revenue for the quarter ended March 31, 2003, increased 11.0%
to $271.4 million compared with $244.4 million in the same quarter of
last year. Earnings before interest expense, gain on sale of assets,
minority interests, income taxes, depreciation and amortization, loss
on debt extinguishment and cumulative effect of change in accounting
principle (EBITDA) for the second quarter increased 7.6% to $41.1
million compared with $38.2 million in the prior year period. Net
earnings were $10.9 million for the quarter ended March 31, 2003,
compared with net earnings of $12.7 million in the same prior year
period. In the second quarter of fiscal year 2003, the Company
recorded a $3.9 million non-cash charge for the write-off of deferred
financing costs associated with the Company's refinancing of its
previous credit facility.
In commenting on the quarterly results, David R. White, chairman,
president and chief executive officer of IASIS, said, "I am pleased
with another strong quarter of volume and net revenue growth. In
addition, we enjoyed a record quarter from an operating cash flow
standpoint. Our continued improvement in operating results is being
driven, in part, by a focus on our key initiatives, which include
growing profitable product lines, investing in new technologies and
physician recruiting and retention."
Net revenue for the six months ended March 31, 2003, increased
13.1% to $526.2 million compared with $465.3 million in the same
period of last year. EBITDA for the first half of fiscal year 2003
increased 16.5% to $74.2 million compared with $63.7 million for the
same period in fiscal 2002. Net earnings for the six months ended
March 31, 2003, were $18.4 million compared with net earnings of $13.0
million in the same period of last year, excluding the cumulative
effect of a change in accounting principle of $39.5 million related to
the adoption of SFAS No. 142.
Same facility net patient revenue per adjusted admission increased
by 8.0% and 7.4% for the quarter and six months ended March 31, 2003,
respectively, compared with the same prior year periods. Same facility
hospital admissions and adjusted admissions for the quarter ended
March 31, 2003, increased from the prior year period by 5.0% and 5.5%,
respectively. Same facility hospital admissions and adjusted
admissions for the six months ended March 31, 2003, increased from the
prior year period by 6.4% and 7.5%, respectively.
At March 31, 2003, the Company's net working capital was $82.6
million compared with $90.1 million at December 31, 2002, after the
effect of the refinancing of the credit facility. Net accounts
receivable increased $200,000 from $155.7 million at December 31,
2002, to $155.9 million at March 31, 2003. Days of net revenue
outstanding was 57 at March 31, 2003, compared with 59 at December 31,
2002, excluding Medicare settlement accounts. Cash flows from
operating activities for the quarter and six months ended March 31,
2003, were $43.8 million and $52.1 million, respectively, compared
with $27.9 million and $29.5 million, respectively, in the prior year
period. No amounts were outstanding under the Company's revolving
credit facility at March 31, 2003, compared with $29.5 million
outstanding at December 31, 2002.
During the quarter ended March 31, 2003, the Company refinanced
its senior bank credit facility. The new $475 million credit facility
consists of a $125 million, five-year revolving credit facility and a
$350 million, six-year term loan, with borrowing rates generally
consistent with the previous credit facility. Proceeds from the new
credit facility were used to refinance amounts outstanding under the
Company's previous credit facility and to fund closing and other
transaction related costs incurred in connection with the refinancing.
A listen-only simulcast and 30-day replay of IASIS Healthcare
Corporation's second quarter conference call will be available by
clicking the "For Investors" link on the Company's website at
www.iasishealthcare.com beginning at 11:00 a.m. Eastern Time on May 2,
2003. A copy of the Company's Form 8-K (including the press release)
will also be available on the Company's website.
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 Texas, including San Antonio. IASIS Healthcare(R) also operates
three ambulatory surgery centers and a Medicaid managed health plan
that currently serves over 60,900 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 negotiate
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 Medicare,
Medicaid and SCHIP Benefit Improvement and Protection Act of 2000; the
impact of possible governmental investigations; our ability to use our
information systems effectively; 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.
IASIS HEALTHCARE CORPORATION
Condensed and Consolidated Statements of Operations (Unaudited)
(in thousands)
Three Months Ended Six Months Ended
March 31, March 31,
------------------ ------------------
2003 2002 2003 2002
------- -------- -------- --------
Net revenue $271,436 $244,424 $526,201 $465,305
Cost and expenses:
Salaries and benefits 94,153 80,318 182,952 158,045
Supplies 37,768 34,705 73,451 65,998
Other operating expenses 78,289 73,578 155,703 143,155
Provision for bad debts 20,154 17,591 39,865 34,365
Interest, net 13,131 14,036 26,448 28,539
Depreciation
and amortization 12,682 11,180 25,533 21,668
Loss on debt
extinguishment 3,900 -- 3,900 --
-------- -------- -------- --------
Total costs
and expenses 260,077 231,408 507,852 451,770
-------- -------- -------- --------
Earnings before gain on
sale of assets, minority
interests, income taxes
and cumulative effect of
a change in accounting
principle 11,359 13,016 18,349 13,535
Loss (gain) on sale
of assets, net -- -- (780) 7
Minority interests 421 301 699 524
-------- -------- -------- --------
Earnings before income taxes
and cumulative effect of
a change in accounting
principle 10,938 12,715 18,430 13,004
Income tax expense -- -- -- --
-------- -------- -------- --------
Net earnings before
cumulative effect of
a change in accounting
principle $10,938 $12,715 $18,430 $13,004
Cumulative effect of a change
in accounting principle -- -- -- (39,497)
-------- -------- -------- --------
Net earnings (loss) $10,938 $12,715 $18,430 $(26,493)
======== ======== ======== ========
EBITDA (1) $41,072 $38,232 $74,230 $63,742
======== ======== ======== ========
EBITDA margin (1) 15.1% 15.6% 14.1% 13.7%
(1) EBITDA represents earnings before interest expense, gain on sale
of assets, minority interests, income taxes, depreciation and
amortization, loss on debt extinguishment and cumulative effect
of change in accounting principle. Management routinely
calculates and communicates EBITDA and believes that it is useful
to investors because it is commonly used as an analytical
indicator within the healthcare industry to evaluate hospital
performance, allocate resources and measure leverage capacity and
debt service ability. EBITDA should not be considered as a
measure of financial performance under generally accepted
accounting principles (GAAP), and the items excluded from EBITDA
are significant components in understanding and assessing
financial performance. A table reconciling EBITDA to net earnings
(loss) is included in this press release under Supplemental
Condensed and Consolidated Statements of Operations Information.
EBITDA should not be considered in isolation or as an alternative
to net income, cash flows generated by operating, investing, or
financing activities or other financial statement data presented
in the consolidated financial statements as an indicator of
financial performance or liquidity. EBITDA, as presented, may not
be comparable to similarly titled measures of other companies.
IASIS HEALTHCARE CORPORATION
Condensed and Consolidated Balance Sheets
(in thousands except share amounts)
March 31, Sept. 30,
2003 2002
-------- --------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $6,362 $ --
Accounts receivable, net of
allowance for doubtful accounts
of $39,095 and $34,450, respectively 155,935 154,452
Inventories 23,996 23,909
Prepaid expenses and other current assets 14,993 15,697
Assets held for sale 22,106 22,106
-------- --------
Total current assets 223,392 216,164
Property and equipment, net 415,679 402,171
Goodwill 252,204 252,397
Other assets, net 34,459 27,751
-------- --------
Total assets $925,734 $898,483
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $48,543 $47,061
Salaries and benefits payable 23,367 21,551
Accrued interest payable 16,754 15,016
Medical claims payable 31,146 30,262
Other accrued expenses and
other current liabilities 15,994 19,023
Current portion of long-term debt
and capital lease obligations 5,032 26,252
-------- --------
Total current liabilities 140,836 159,165
Long-term debt and capital lease obligations 581,741 556,691
Other long-term liabilities 25,691 22,347
Minority interest 3,490 4,736
-------- --------
Total liabilities 751,758 742,939
Stockholders' equity:
Preferred stock - $0.01 par value, authorized
5,000,000 shares; no shares issued and
outstanding at March 31, 2003, and
September 30, 2002 -- --
Common stock - $0.01 par value, authorized
100,000,000 shares; 31,956,113 shares issued
and 31,955,863 shares outstanding at March 31,
2003, and September 30, 2002, respectively 320 320
Nonvoting common stock - $0.01 par value,
authorized 10,000,000 shares; no shares issued
and outstanding at March 31, 2003, and
September 30, 2002 -- --
Additional paid-in capital 450,720 450,718
Treasury stock, at cost, 16,306,541 shares
at March 31, 2003, and September 30, 2002 (155,300) (155,300)
Accumulated deficit (121,764) (140,194)
-------- --------
Total stockholders' equity 173,976 155,544
-------- --------
Total liabilities and stockholders' equity $925,734 $898,483
======== ========
IASIS HEALTHCARE CORPORATION
Condensed and Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Six Months Ended
March 31,
------------------
2003 2002
-------- --------
Cash flows from operating activities:
Net earnings (loss) $18,430 $(26,493)
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation and amortization 25,533 21,668
Minority interests 699 524
Cumulative effect of a change
in accounting principle -- 39,497
(Gain) loss on sale of assets (780) 7
Loss on debt extinguishment 3,900 --
Changes in operating assets
and liabilities, net of disposals:
Accounts receivable (1,340) (6,913)
Inventories, prepaid expenses
and other current assets (916) (5,249)
Accounts payable and other
accrued liabilities 6,583 6,431
-------- --------
Net cash provided by operating activities 52,109 29,472
-------- --------
Cash flows from investing activities:
Purchases of property and equipment (36,520) (16,107)
Purchase of real estate -- (55,338)
Proceeds from sales of assets 2,863 149
Change in other assets (1,732) (2,578)
-------- --------
Net cash used in investing activities (35,389) (73,874)
-------- --------
Cash flows from financing activities:
Proceeds from issuance of common stock 2 222
Proceeds from senior bank debt borrowings 454,100 120,300
Payment of debt and capital leases (453,450) (79,673)
Debt financing costs incurred (10,600) (2,347)
Distribution of minority interests (410) --
Other -- (156)
-------- --------
Net cash provided (used) by financing activities (10,358) 38,346
-------- --------
Increase (decrease) in cash and cash equivalents 6,362 (6,056)
Cash and cash equivalents at beginning of period -- 6,056
-------- --------
Cash and cash equivalents at end of period $6,362 $ --
======== ========
Supplemental disclosure of cash flow information:
Cash paid for interest $24,789 $28,937
======== ========
Cash paid (refunded) for income taxes, net $6 $(1,831)
======== ========
Supplemental schedule of noncash investing
and financing activities:
Capital lease obligations incurred
to acquire equipment $3,278 $ --
======== ========
IASIS HEALTHCARE CORPORATION
Segment Information (Unaudited)
(in thousands)
Three Months Ended Six Months Ended
March 31, March 31,
------------------ ------------------
2003 2002 2003 2002
-------- -------- -------- --------
Acute Care Service:
Net patient revenue $235,802 $210,143 $455,527 $399,291
Revenue between segments (1,625) (1,407) (3,533) (2,844)
-------- -------- -------- --------
Net revenue 234,177 208,736 451,994 396,447
Salaries and benefits 92,495 79,047 179,738 155,535
Supplies 37,663 34,608 73,224 65,801
Other operating expenses 44,905 41,002 88,880 79,892
Provision for bad debts 20,154 17,591 39,865 34,365
-------- -------- -------- --------
EBITDA 38,960 36,488 70,287 60,854
Loss on debt extinguishment 3,900 -- 3,900 --
Interest expense, net 13,131 14,036 26,448 28,587
Depreciation and amortization 12,653 11,153 25,471 21,612
Loss (gain) on sale
of assets, net -- -- (780) 7
-------- -------- -------- --------
Earnings before minority
interests, income taxes
and cumulative effect of
a change in accounting
principle 9,276 11,299 15,248 10,648
Minority interests 421 301 699 524
-------- -------- -------- --------
Earnings before income taxes
and cumulative effect of
a change in accounting
principle $8,855 $10,998 $14,549 $10,124
======== ======== ======== ========
Segment assets $922,043 $905,098 $922,043 $905,098
======== ======== ======== ========
Health Choice:
Capitation premiums and
other payments $37,259 $35,688 74,207 $68,858
Revenue between segments -- -- -- --
-------- -------- -------- --------
Net revenue 37,259 35,688 74,207 68,858
Salaries and benefits 1,658 1,271 3,214 2,510
Supplies 105 97 227 197
Other operating expenses 33,384 32,576 66,823 63,263
Provision for bad debts -- -- -- --
-------- -------- -------- --------
EBITDA 2,112 1,744 3,943 2,888
Loss on debt extinguishment -- -- -- --
Interest income -- -- -- (48)
Depreciation and
amortization 29 27 62 56
-------- -------- -------- --------
Earnings before minority
interests, income taxes
and cumulative effect of
a change in accounting
principle 2,083 1,717 3,881 2,880
Minority interests -- -- -- --
-------- -------- -------- --------
Earnings before income taxes
and cumulative effect of
change in accounting
principle $2,083 $1,717 $3,881 $2,880
======== ======== ======== ========
Segment assets $3,691 $20,060 $3,691 $20,060
======== ======== ======== ========
IASIS HEALTHCARE CORPORATION
Financial and Operating Data (Unaudited)
Three Months Ended Six Months Ended
March 31, March 31,
------------------ ------------------
2003 2002 2003 2002
-------- -------- -------- --------
Number of hospitals at
end of period 14 14 14 14
Licensed beds at
end of period 2,590 2,507 2,590 2,507
Beds in service at
end of period 2,116 2,085 2,116 2,085
Average length of stay (days) 4.56 4.40 4.48 4.29
Occupancy rates for
same facilities
(average beds in service) 51.8% 48.3% 48.5% 44.2%
Admissions 21,650 20,621 41,684 39,179
Same facility % change 5.0% 6.4%
Adjusted admissions 35,299 33,466 69,396 64,531
Same facility % change 5.5% 7.5%
Patient days 98,677 90,630 186,825 168,122
Adjusted patient days 154,458 142,367 297,760 268,782
Outpatient revenue as a %
of gross patient revenue 35.8% 36.1% 36.9% 37.5%
IASIS HEALTHCARE CORPORATION
Supplemental Condensed and Consolidated Statements
of Operations Information (Unaudited)
(in thousands)
Three Months Ended Six Months Ended
March 31, March 31,
------------------ ------------------
2003 2002 2003 2002
-------- -------- -------- --------
Consolidated Results:
Net earnings (loss) $10,938 $12,715 $18,430 $(26,493)
Add:
Income tax expense -- -- -- --
Interest expense, net 13,131 14,036 26,448 28,539
Minority interests 421 301 699 524
Loss (gain) on sale
of assets, net -- -- (780) 7
Cumulative effect of
a change in accounting
principle -- -- -- 39,497
Depreciation and
amortization 12,682 11,180 25,533 21,668
Loss on debt extinguishment 3,900 -- 3,900 --
-------- -------- -------- --------
EBITDA $41,072 $38,232 $74,230 $63,742
======== ======== ======== ========
CONTACT: IASIS Healthcare Corporation, Franklin
Investor contact:
David R. White or W. Carl Whitmer, 615/844-2747
or
News media contact:
Tomi Galin, 615/467-1255