Exhibit 99
LifePoint Hospitals Reports Second Quarter 2003 Results
BRENTWOOD, Tenn.--(BUSINESS WIRE)--July 28, 2003--LifePoint
Hospitals, Inc. (NASDAQ:LPNT) today announced results for the second
quarter and six months ended June 30, 2003.
For the second quarter ended June 30, 2003, net revenues were
$221.6 million, up 24.6% from $177.9 million a year ago. During the
quarter ended June 30, 2003, prior year contractual adjustments
increased net revenue by $1.4 million, or $0.02 per diluted share,
compared with $2.1 million, or $0.03 per diluted share, for the
quarter ended June 30, 2002. Net income for the quarter totaled $15.3
million, or $0.40 per diluted share, versus a net loss of $2.5
million, or $0.07 per diluted share, for the prior-year period.
Included in the net loss for the quarter ended June 30, 2002, was
$25.0 million of pre-tax debt retirement costs, or $0.41 per diluted
share. Earnings before interest, income taxes, depreciation,
amortization, ESOP expense, minority interest and debt retirement
costs (adjusted EBITDA) increased 8.4% to $42.1 million for the second
quarter ended June 30, 2003, from $38.7 million in the same period
last year.
The consolidated financial results for the second quarter ended
June 30, 2003, reflect a 20.4% increase in total admissions and a
23.6% increase in equivalent admissions compared with the second
quarter of 2002. On a same-hospital basis, net revenues per equivalent
admission increased 5.3% compared with the same period last year as
admissions and equivalent admissions were flat.
For the six months ended June 30, 2003, net revenues were $442.5
million, up 23.1% from $359.5 million a year ago. For the six months
ended June 30, 2003, prior year contractual adjustments increased net
revenue by $4.3 million, or $0.06 per diluted share, compared with
$2.1 million, or $0.03 per diluted share, for the six months ended
June 30, 2002. Net income for the first six months of 2003 totaled
$33.0 million, or $0.85 per diluted share, versus net income of $11.2
million, or $0.29 per diluted share, for the prior year period.
Included in the net income for the six months ended June 30, 2002, was
$26.3 million of pre-tax debt retirement costs, or $0.43 per diluted
share. Earnings before interest, income taxes, depreciation,
amortization, ESOP expense, minority interest and debt retirement
costs (adjusted EBITDA) increased 8.3% to $88.1 million for the first
half of 2003 from $81.3 million in the same period last year.
The consolidated financial results for the six months ended June
30, 2003, reflect a 17.2% increase in total admissions and a 21.5%
increase in equivalent admissions compared with the same period in
2002. On a same-hospital basis, net revenues per equivalent admission
increased 4.8% compared with the same period last year on a 2.7%
decrease in admissions and a 0.9% decrease in equivalent admissions.
Kenneth C. Donahey, chairman and chief executive officer of
LifePoint Hospitals, said, "We are pleased to once again report solid
financial results. Each of our community hospitals is fulfilling its
mission of delivering exceptional care on a cost-effective basis. Our
dedicated hospital leadership is the key to our success and
responsible for our strong financial performance, quarter after
quarter and year after year. By delivering high quality patient care,
we believe we will achieve the best results for our stockholders."
A listen-only simulcast, as well as a 30-day replay, of LifePoint
Hospitals' second quarter conference call will be available on-line at
www.lifepointhospitals.com and www.companyboardroom.com on July 29,
2003, beginning at 10:00 a.m. Eastern Time.
LifePoint Hospitals, Inc. operates 28 hospitals in non-urban
communities. 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 9,000
employees.
This release includes 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 our future results are beyond our ability to control or
predict with accuracy. These statements are subject to various risks
and uncertainties, including, without limitation, (i) reduction in
payments to healthcare providers by government and commercial third
party payors, as well as cost-containment efforts of insurers and
other payors; (ii) the possibility of adverse changes in, and
requirements of, applicable laws, regulations, policies and
procedures, including those required by our corporate integrity
agreement; (iii) our ability to manage healthcare risks and the lack
of state and federal tort reform; (iv) uncertainty associated with
compliance with HIPAA regulations; (v) our ability to enter into and
renew payor arrangements on acceptable terms; (vi) our ability to
maintain and increase patient volumes and control costs; (vii) the
availability, cost and terms of insurance coverage; (viii) the highly
competitive nature of the healthcare business, including the
competition to recruit and retain physicians; (ix) the ability to
attract and retain qualified management and personnel; (x) the
geographic concentration of our operations; (xi) our ability to
acquire hospitals on favorable terms and to complete budgeted capital
improvements successfully; (xii) our ability to integrate newly
acquired facilities successfully; (xiii) the availability and terms of
capital to fund our business strategy; (xiv) changes in our liquidity
or indebtedness; (xv) the potential adverse impact of government
investigations and litigation involving the business practices of
healthcare providers; (xvi) successful development or license of
software and management information systems; (xvii) changes in
generally accepted accounting principles or practices; (xviii)
volatility in the market value of our common stock; (xix) changes in
general economic conditions and changes in the manner in which
employers provide healthcare coverage to their employees; and (xx)
those risks and uncertainties described from time to time in our
filings with the Securities and Exchange Commission. Therefore, our
future results may differ materially from those described in this
release. We undertake 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 release refer to LifePoint Hospitals, Inc. and its affiliates.
LIFEPOINT HOSPITALS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
Dollars in millions (except per share amounts),
share amounts in thousands
For the Three Months Ended
June 30,
2003 2002
---------------- ----------------
Amount Ratio Amount Ratio
------- ------- ------- -------
Revenues (1) $221.6 100.0% $177.9 100.0%
Salaries and benefits 90.8 41.0% 70.9 39.8%
Supplies 28.7 13.0% 21.9 12.3%
Other operating expenses 43.1 19.4% 33.3 18.7%
Provision for doubtful accounts 16.9 7.6% 13.1 7.4%
Depreciation and amortization 11.4 5.1% 9.7 5.5%
Interest expense, net 3.3 1.5% 2.8 1.6%
Debt retirement costs -- -- % 25.0 14.0%
ESOP expense 1.5 0.7% 2.7 1.5%
------- ------- ------- -------
195.7 88.3% 179.4 100.8%
------- ------- ------- -------
Income (loss) before minority
interest and income taxes 25.9 11.7% (1.5) (0.8%)
Minority interest in earnings
of consolidated entity 0.2 0.1% 0.8 0.4%
------- ------- ------- -------
Income (loss) before income taxes 25.7 11.6% (2.3) (1.2%)
Provision for income taxes 10.4 4.7% 0.2 0.2%
------- ------- ------- -------
Net income (loss) $15.3 6.9% $(2.5) (1.4%)
======= ======= ======= =======
Earnings (loss) per share - basic $0.41 $(0.07)
======= =======
Earnings (loss) per
share - diluted (2) (3) $0.40 $(0.07)
======= =======
Earnings Per Share Calculation:
Net income (loss) $15.3 $(2.5)
Add: Interest on convertible
notes, net of taxes 2.0 --
------- -------
Adjusted net income (loss) $17.3 $(2.5)
======= =======
Weighted average number of
shares - basic 37,402 37,485
Add: Shares for conversion of
convertible notes 5,279 --
Other share equivalents 664 --
------- -------
Weighted average number of
shares and equivalents - diluted 43,345 37,485
======= =======
Earnings (loss) per
share - diluted (2) (3) $0.40 $(0.07)
======= =======
For the Six Months Ended
June 30,
2003 2002
---------------- ----------------
Amount Ratio Amount Ratio
------- -------- ------- -------
Revenues (1) $442.5 100.0% $359.5 100.0%
Salaries and benefits 181.1 40.9% 141.6 39.4%
Supplies 57.2 12.9% 44.8 12.5%
Other operating expenses 81.7 18.5% 65.5 18.2%
Provision for doubtful accounts 34.4 7.8% 26.3 7.3%
Depreciation and amortization 22.6 5.1% 19.1 5.4%
Interest expense, net 6.6 1.5% 6.9 1.9%
Debt retirement costs -- -- % 26.3 7.3%
ESOP expense 3.1 0.7% 5.2 1.4%
------- ------- ------- -------
386.7 87.4% 335.7 93.4%
------- ------- ------- -------
Income (loss) before minority
interest and income taxes 55.8 12.6% 23.8 6.6%
Minority interest in earnings
of consolidated entity 0.2 -- % 1.5 0.4%
------- ------- ------- -------
Income (loss) before income taxes 55.6 12.6% 22.3 6.2%
Provision for income taxes 22.6 5.1% 11.1 3.1%
------- ------- ------- -------
Net income (loss) $33.0 7.5% $11.2 3.1%
======= ====== ======= =======
Earnings (loss) per share - basic $0.88 $0.30
======= =======
Earnings (loss) per
share - diluted (2) (3) $0.85 $0.29
======= =======
Earnings Per Share Calculation:
Net income (loss) $33.0 $11.2
Add: Interest on convertible
notes, net of taxes 3.9 --
------- -------
Adjusted net income (loss) $36.9 $11.2
======= =======
Weighted average number of
shares - basic 37,639 37,394
Add: Shares for conversion of
convertible notes 5,279 --
Other share equivalents 710 1,167
------- -------
Weighted average number of
shares and equivalents - diluted 43,628 38,561
======= =======
Earnings (loss) per
share - diluted (2) (3) $0.85 $0.29
======= =======
(1) Prior year contractual adjustments increased revenues by $1.4
million, or $0.02 per diluted share, for the three months ended
June 30, 2003, and by $4.3 million, or $0.06 per diluted share,
for the six months ended June 30, 2003. Prior year contractual
adjustments increased revenues by $2.1 million, or $0.03 per
diluted share, for the three months and six months ended June 30,
2002.
(2) The impact of the 2.3 million potential weighted average shares
of common stock, if converted, and interest expense related to
the convertible notes was not included in the computation of
diluted earnings per share for the three months ended June 30,
2002, because the effect would have been anti-dilutive. In
addition, the impact of the 1.2 million potential weighted
average shares of common stock related to outstanding stock
options was not included in the computation of diluted earnings
per share for the three months ended June 30, 2002, because the
effect would have been anti-dilutive.
(3) The impact of the 1.2 million potential weighted average shares
of common stock, if converted, and interest expense related to
the convertible notes was not included in the computation of
diluted earnings per share for the six months ended June 30,
2002, because the effect would have been anti-dilutive.
LIFEPOINT HOSPITALS, INC.
CONSOLIDATED BALANCE SHEETS
In millions
June 30, Dec. 31,
2003 2002
------- -------
(Unaudited) (1)
ASSETS
Current assets:
Cash and cash equivalents $19.5 $23.0
Accounts receivable, less allowances for
doubtful accounts of $109.1 and $109.1 at
June 30, 2003 and December 31, 2002, respectively 94.2 85.0
Inventories 21.1 20.5
Deferred income taxes and other current assets 21.1 14.8
------- -------
155.9 143.3
Property and equipment:
Land 11.4 11.3
Buildings and improvements 291.3 285.3
Equipment 309.2 295.5
Construction in progress 33.1 18.1
------- -------
645.0 610.2
Accumulated depreciation (257.7) (238.0)
------- -------
387.3 372.2
Deferred loan costs, net 7.8 8.6
Unallocated purchase price 135.3 136.1
Intangible assets, net 3.5 3.8
Other -- 0.3
Goodwill 69.2 69.2
------- -------
$759.0 $733.5
======= =======
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $29.2 $28.5
Accrued salaries 21.4 24.4
Other current liabilities 17.4 14.3
Estimated third-party payor settlements 5.9 8.2
------- -------
73.9 75.4
Long-term debt 250.0 250.0
Deferred income taxes 26.4 24.9
Professional and general liability
risks and other liabilities 29.6 25.6
Minority interest in equity of
consolidated entity 1.2 --
Stockholders' equity:
Preferred stock -- --
Common stock 0.4 0.4
Capital in excess of par value 293.6 297.2
Unearned ESOP compensation (17.7) (19.3)
Retained earnings 101.6 79.3
------- -------
377.9 357.6
------- -------
$759.0 $733.5
======= =======
(1) Derived from audited financial statements.
LIFEPOINT HOSPITALS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
In millions
Three Months Six Months
Ended Ended
June 30, June 30,
-------------- --------------
2003 2002 2003 2002
------ ------ ------ ------
Cash flows from operating activities:
Net income (loss) $15.3 $(2.5) $33.0 $11.2
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization 11.4 9.7 22.6 19.1
ESOP expense 1.5 2.7 3.1 5.2
Minority interest in earnings
of consolidated entity 0.2 0.8 0.2 1.5
Deferred income taxes (benefit) 2.2 (1.2) 2.1 (0.8)
Reserve for professional and
general liability risks, net 2.6 2.0 3.8 5.1
Debt retirement costs -- 25.0 -- 26.3
Tax benefit from stock
option exercises 0.2 0.3 0.2 1.0
Increase (decrease) in cash from
operating assets and liabilities,
net of effects from acquisitions:
Accounts receivable 3.2 2.6 (7.9) (18.2)
Inventories and other
current assets (0.6) (1.7) (3.4) (3.1)
Accounts payable and
accrued expenses (0.4) 2.6 2.0 4.1
Income taxes payable (16.1) (14.5) (4.3) (2.5)
Estimated third-party payor
settlements (3.7) (6.9) (2.3) 4.4
Other 0.1 (0.5) 1.0 (0.7)
------ ------ ------ ------
Net cash provided by
operating activities 15.9 18.4 50.1 52.6
Cash flows from investing activities:
Purchases of property
and equipment, net (20.8) (16.8) (38.0) (26.8)
Purchase of short-term investments -- (21.5) -- (21.5)
Other 0.6 (1.2) 0.4 (1.3)
------ ------ ------ ------
Net cash used in
investing activities (20.2) (39.5) (37.6) (49.6)
Cash flows from financing activities:
Repurchase of common stock (17.0) -- (17.0) --
Repurchase 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 0.3 1.0 0.5 2.2
Other 0.2 0.4 0.5 0.3
------ ------ ------ ------
Net cash (used in) provided by
financing activities (16.5) 102.4 (16.0) 94.9
Change in cash and cash equivalents (20.8) 81.3 (3.5) 97.9
Cash and cash equivalents at
beginning of period 40.3 73.8 23.0 57.2
------ ------ ------ ------
Cash and cash equivalents at
end of period $19.5 $155.1 $19.5 $155.1
====== ====== ====== ======
Interest payments $6.1 $7.8 $6.3 $8.4
====== ====== ====== ======
Income taxes paid, net $24.3 $15.4 $24.7 $13.2
====== ====== ====== ======
LIFEPOINT HOSPITALS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
Dollars in millions, except per share amounts
For the Three Months Ended
June 30,
2003 2002
-------------- --------------
Amount Ratio Amount Ratio
------ ------ ------ ------
Revenues (1) $221.6 100.0% $177.9 100.0%
Salaries and benefits 90.8 41.0% 70.9 39.8%
Supplies 28.7 13.0% 21.9 12.3%
Other operating expenses 43.1 19.4% 33.3 18.7%
Provision for doubtful accounts 16.9 7.6% 13.1 7.4%
------ ------ ------ ------
Adjusted EBITDA (2) $42.1 19.0% $38.7 21.8%
====== ====== ====== ======
For the Six Months Ended
June 30,
2003 2002
-------------- --------------
Amount Ratio Amount Ratio
------ ------ ------ ------
Revenues (1) $442.5 100.0% $359.5 100.0%
Salaries and benefits 181.1 40.9% 141.6 39.4%
Supplies 57.2 12.9% 44.8 12.5%
Other operating expenses 81.7 18.5% 65.5 18.2%
Provision for doubtful accounts 34.4 7.8% 26.3 7.3%
------ ------ ------ -------
Adjusted EBITDA (2) $88.1 19.9% $81.3 22.6%
======= ====== ====== =======
(1) Prior year contractual adjustments increased revenues by $1.4
million, or $0.02 per diluted share, for the three months ended
June 30, 2003, and by $4.3 million, or $0.06 per diluted share,
for the six months ended June 30, 2003. Prior year contractual
adjustments increased revenues by $2.1 million, or $0.03 per
diluted share, for the three months and six months ended June 30,
2002.
(2) Adjusted EBITDA is defined as income before depreciation and
amortization, interest expense, debt retirement costs, ESOP
expense, minority interest in earnings of consolidated entity and
income taxes. Our management uses adjusted EBITDA to evaluate our
operating performance and as a measure of performance for
incentive compensation purposes. We believe adjusted EBITDA is a
measure of performance used by some investors, equity analysts
and others to make informed investment decisions. In addition,
multiples of current or projected adjusted EBITDA are used to
estimate current or prospective enterprise value. Adjusted EBITDA
should not be considered as a measure of financial performance
under accounting principles generally accepted in the United
States, and the items excluded from adjusted EBITDA are
significant components in understanding and assessing financial
performance. Adjusted 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. 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.
The following table reconciles adjusted EBITDA as presented above to
net income (loss) as reflected in the unaudited consolidated
statements of operations and in accordance with generally accepted
accounting principles (in millions):
Three Months Six Months
Ended Ended
June 30, June 30,
-------------- --------------
2003 2002 2003 2002
------ ------ ------ ------
Adjusted EBITDA $42.1 $38.7 $88.1 $81.3
Depreciation and amortization 11.4 9.7 22.6 19.1
Interest expense, net 3.3 2.8 6.6 6.9
Debt retirement costs - 25.0 - 26.3
ESOP expense 1.5 2.7 3.1 5.2
Minority interest in earnings
of consolidated entity 0.2 0.8 0.2 1.5
Provision for income taxes 10.4 0.2 22.6 11.1
------ ------ ------ ------
Net income (loss) $15.3 $(2.5) $33.0 $11.2
====== ====== ====== ======
LIFEPOINT HOSPITALS, INC.
UNAUDITED STATISTICS
Three Months Ended
June 30,
-------------------------
%
2003 2002 Change
------- ------- -------
Actual:
Number of hospitals at end of period 28 23 21.7%
Licensed beds at end of period 2,624 2,197 19.4%
Weighted average licensed beds 2,624 2,197 19.4%
Average daily census 997 826 20.7%
Average length of stay 4.1 4.1 -%
Revenues ($ in millions) $221.6 $177.9 24.6%
Revenues per equivalent admission $4,962 $4,924 0.8%
Equivalent admissions (1) 44,654 36,114 23.6%
Outpatient factor (1) 2.0 1.95 2.7%
Outpatient surgeries 19,225 16,079 19.6%
Inpatient surgeries 6,691 5,732 16.7%
Emergency room visits 106,305 88,103 20.7%
Admissions 22,337 18,548 20.4%
Medicare case mix index 1.18 1.17 0.9%
Net outpatient revenues as a
percentage of net revenues 50.9% 51.1% N/A
Same-Hospital: (2)
Number of hospitals at end of period 23 23 -%
Licensed beds at end of period 2,203 2,197 0.3%
Weighted average licensed beds 2,203 2,197 0.3%
Average daily census 832 826 0.7%
Average length of stay 4.1 4.1 -%
Revenues ($ in millions) $187.1 $177.9 5.2%
Revenues per equivalent admission $5,184 $4,924 5.3%
Equivalent admissions (1) 36,101 36,114 -%
Outpatient factor (1) 1.95 1.95 -%
Outpatient surgeries 16,238 16,079 1.0%
Inpatient surgeries 5,690 5,732 (0.7%)
Emergency room visits 86,161 88,103 (2.2%)
Admissions 18,539 18,548 -%
Medicare case mix index 1.20 1.17 2.6%
Net outpatient revenues as a
percentage of net revenues 49.6% 51.1% N/A
Six Months Ended
June 30,
-------------------------
%
2003 2002 Change
------- ------- -------
Actual:
Number of hospitals at end of period 28 23 21.7%
Licensed beds at end of period 2,624 2,197 19.4%
Weighted average licensed beds 2,622 2,197 19.3%
Average daily census 1,026 880 16.6%
Average length of stay 4.1 4.1 -%
Revenues ($ in millions) $442.5 $359.5 23.1%
Revenues per equivalent admission $4,940 $4,877 1.3%
Equivalent admissions (1) 89,566 73,702 21.5%
Outpatient factor (1) 1.96 1.89 3.7%
Outpatient surgeries 38,084 32,245 18.1%
Inpatient surgeries 13,354 11,384 17.3%
Emergency room visits 206,043 173,090 19.0%
Admissions 45,814 39,099 17.2%
Medicare case mix index 1.19 1.16 2.6%
Net outpatient revenues as a
percentage of net revenues 50.5% 49.4% N/A
Same-Hospital: (2)
Number of hospitals at end of period 23 23 -%
Licensed beds at end of period 2,203 2,197 0.3%
Weighted average licensed beds 2,201 2,197 0.2%
Average daily census 861 880 (2.2%)
Average length of stay 4.1 4.1 -%
Revenues ($ in millions) $373.3 $359.5 3.9%
Revenues per equivalent admission $5,110 $4,877 4.8%
Equivalent admissions (1) 73,052 73,702 (0.9%)
Outpatient factor (1) 1.92 1.89 1.9%
Outpatient surgeries 32,148 32,245 (0.3%)
Inpatient surgeries 11,349 11,384 (0.3%)
Emergency room visits 170,653 173,090 (1.4%)
Admissions 38,028 39,099 (2.7%)
Medicare case mix index 1.20 1.16 3.4%
Net outpatient revenues as a
percentage of net revenues 49.7% 49.4% N/A
(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 outpatient factor (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) Same-hospital information excludes the operations of hospitals
that the Company acquired during the periods presented. The costs
of corporate overhead are included in same-hospital information.
CONTACT: LifePoint Hospitals
Michael J. Culotta, 615-372-8512