Exhibit 99.1
LifePoint Hospitals Reports Third Quarter 2003 Results
BRENTWOOD, Tenn.--(BUSINESS WIRE)--Oct. 27, 2003--LifePoint
Hospitals, Inc. (NASDAQ: LPNT) today announced results for the third
quarter and nine months ended September 30, 2003.
For the third quarter ended September 30, 2003, revenues were
$227.3 million, up 24.7% from $182.2 million a year ago. During the
quarter ended September 30, 2003, prior-year contractual adjustments
increased revenues by $1.9 million, or $0.03 per diluted share,
compared with $5.8 million, or $0.09 per diluted share, for the
quarter ended September 30, 2002. Net income for the quarter totaled
$16.2 million, or $0.42 per diluted share, versus net income of $12.7
million, or $0.33 per diluted share, for the prior-year period.
Included in net income for the quarter ended September 30, 2002, was
$4.2 million of pre-tax debt retirement costs, or $0.06 per diluted
share.
The consolidated financial results for the third quarter ended
September 30, 2003, reflect an 18.5% increase in total admissions and
a 22.8% increase in equivalent admissions compared with the third
quarter of 2002. On a same-hospital basis, revenues per equivalent
admission increased 4.2%, compared with the same period last year, and
equivalent admissions increased 1.4% over the prior-year period.
For the nine months ended September 30, 2003, revenues were $669.8
million, up 23.6% from $541.7 million a year ago. For the nine months
ended September 30, 2003, prior-year contractual adjustments increased
revenues by $6.2 million, or $0.08 per diluted share, compared with
$7.9 million, or $0.11 per diluted share, for the nine months ended
September 30, 2002. Net income for the nine months ended September 30,
2003, totaled $49.2 million, or $1.26 per diluted share, versus net
income of $23.9 million, or $0.62 per diluted share, for the
prior-year period. Included in net income for the nine months ended
September 30, 2002, was $30.5 million of pre-tax debt retirement
costs, or $0.49 per diluted share.
The consolidated financial results for the nine months ended
September 30, 2003, reflect a 17.6% increase in total admissions and a
22.0% increase in equivalent admissions compared with the same period
in 2002. On a same-hospital basis, revenues per equivalent admission
increased 4.6% compared with the same period last year on a 2.0%
decrease in admissions and flat equivalent admissions.
Effective October 1, 2003, the Company purchased 75-bed Spring
View Hospital in Lebanon, Kentucky, from Norton Healthcare. The sale
also included Spring View Nursing Home and Spring View Pediatrics. The
revenues for Spring View Hospital and Spring View Nursing Home totaled
approximately $21.3 million in fiscal year 2002.
Kenneth C. Donahey, chairman and chief executive officer of
LifePoint Hospitals, said, "Our financial results demonstrate our
ability to combine a disciplined acquisition strategy with solid
operating metrics, delivered through strong management performance at
our facilities. The good news is that with all of the success we've
achieved to date, there is still potential for improvement in our
markets. We look forward to continuing to deliver impressive results
as we stay focused on our strategy."
A listen-only simulcast, as well as a 30-day replay, of LifePoint
Hospitals' third quarter conference call will be available on-line at
www.lifepointhospitals.com and www.fulldisclosure.com on October 28,
2003, beginning at 10:00 a.m. Eastern Time.
LifePoint Hospitals, Inc. operates 29 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; (xx) our
reliance on information technology systems maintained by HCA; and
(xxi) 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 INCOME
Dollars in millions (except per share amounts),
share amounts in thousands
For the Three Months Ended
September 30,
-------------------------------
2003 2002
--------------- ---------------
Amount Ratio Amount Ratio
------- ------ ------- ------
Revenues (1) $ 227.3 100.0% $ 182.2 100.0%
Salaries and benefits 90.5 39.8% 71.0 39.0%
Supplies 29.0 12.7% 22.6 12.4%
Other operating expenses 40.3 17.9% 35.6 19.5%
Provision for doubtful accounts 24.2 10.6% 12.5 6.9%
Depreciation and amortization 10.8 4.8% 8.9 4.8%
Interest expense, net 3.3 1.4% 3.0 1.7%
Debt retirement costs - - % 4.2 2.3%
ESOP expense 1.8 0.8% 2.2 1.2%
------- ------ ------- ------
199.9 88.0% 160.0 87.8%
------- ------ ------- ------
Income before minority
interest and income taxes 27.4 12.0% 22.2 12.2%
Minority interest in earnings
of consolidated entity 0.3 0.1% 0.7 0.4%
------- ------ ------- ------
Income before income taxes 27.1 11.9% 21.5 11.8%
Provision for income taxes 10.9 4.8% 8.8 4.8%
------- ------ ------- ------
Net income $ 16.2 7.1% $ 12.7 7.0%
======= ====== ======= ======
Earnings per share - basic $ 0.43 $ 0.34
======= =======
Earnings per share - diluted (2) $ 0.42 $ 0.33
======= =======
Earnings Per Share Calculation:
Net income $ 16.2 $ 12.7
Add: Interest on convertible
notes, net of taxes 2.0 -
------- -------
Adjusted net income $ 18.2 $ 12.7
======= =======
Weighted average number of
shares - basic 37,242 37,616
Add: Shares for conversion of
convertible notes 5,279 -
Other share equivalents 901 1,004
------- -------
Weighted average number of
shares and equivalents - diluted 43,422 38,620
======= =======
Earnings per share - diluted (2) $ 0.42 $ 0.33
======= =======
For the Nine Months Ended
September 30,
--------------------------------
2003 2002
--------------- ---------------
Amount Ratio Amount Ratio
------- ------ ------- ------
Revenues (1) $ 669.8 100.0% $ 541.7 100.0%
Salaries and benefits 271.6 40.6% 212.6 39.3%
Supplies 86.2 12.9% 67.4 12.4%
Other operating expenses 122.0 18.2% 101.1 18.6%
Provision for doubtful accounts 58.6 8.7 % 38.8 7.2%
Depreciation and amortization 33.4 5.0 % 28.0 5.2%
Interest expense, net 9.9 1.5 % 9.9 1.8%
Debt retirement costs - - % 30.5 5.6%
ESOP expense 4.9 0.7 % 7.4 1.4%
------- ------ ------- ------
586.6 87.6% 495.7 91.5%
------- ------ ------- ------
Income before minority
interest and income taxes 83.2 12.4% 46.0 8.5%
Minority interest in earnings
of consolidated entity 0.5 0.1% 2.2 0.4%
------- ------ ------- ------
Income before income taxes 82.7 12.3% 43.8 8.1%
Provision for income taxes 33.5 5.0% 19.9 3.7%
------- ------ ------- ------
Net income $ 49.2 7.3% $ 23.9 4.4%
======= ====== ======= ======
Earnings per share - basic $ 1.31 $ 0.64
======= =======
Earnings per share - diluted (2) $ 1.26 $ 0.62
======= =======
Earnings Per Share Calculation:
Net income $ 49.2 $ 23.9
Add: Interest on convertible
notes, net of taxes 5.9 -
------- -------
Adjusted net income $ 55.1 $ 23.9
======= =======
Weighted average number of
shares - basic 37,505 37,469
Add: Shares for conversion of
convertible notes 5,279 -
Other share equivalents 774 1,113
------- -------
Weighted average number of
shares and equivalents - diluted 43,558 38,582
======= =======
Earnings per share - diluted (2) $ 1.26 $ 0.62
======= =======
(1) Prior-year contractual adjustments increased revenues by $1.9
million, or $0.03 per diluted share, for the three months ended
September 30, 2003, and by $6.2 million, or $0.08 per diluted
share, for the nine months ended September 30, 2003. Prior-year
contractual adjustments increased revenues by $5.8 million, or
$0.09 per diluted share, for the three months ended September 30,
2002, and by $7.9 million, or $0.11 per diluted share, for the
nine months ended September 30, 2002.
(2) The impact of the 5.3 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 September 30, 2002,
because the effect would have been anti-dilutive. In addition, the
impact of the 2.6 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 nine months ended September 30, 2002,
because the effect would have been anti-dilutive.
LIFEPOINT HOSPITALS, INC.
CONSOLIDATED BALANCE SHEETS
In millions
September 30, December 31,
2003 2002
------------ ------------
(Unaudited) (1)
ASSETS
Current assets:
Cash and cash equivalents $ 20.1 $ 23.0
Accounts receivable, less allowances for
doubtful accounts of $108.7 and $109.1 at
September 30, 2003 and December 31, 2002,
respectively 93.1 85.0
Inventories 21.4 20.5
Income taxes receivable 9.0 -
Deferred income taxes and other current
assets 18.1 14.8
---------- ----------
161.7 143.3
Property and equipment:
Land 12.4 11.3
Buildings and improvements 302.1 285.3
Equipment 320.1 295.5
Construction in progress 38.2 18.1
---------- ----------
672.8 610.2
Accumulated depreciation (267.1) (238.0)
---------- ----------
405.7 372.2
Deferred loan costs, net 7.4 8.6
Unallocated purchase price 131.1 136.1
Intangible assets, net 3.3 3.8
Other - 0.3
Goodwill 76.2 69.2
---------- ----------
$ 785.4 $ 733.5
========== ==========
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 36.1 $ 28.5
Accrued salaries 23.0 24.4
Other current liabilities 22.5 14.3
Estimated third-party payor settlements 4.1 8.2
---------- ----------
85.7 75.4
Long-term debt 250.0 250.0
Deferred income taxes 32.0 24.9
Professional and general liability risks and
other liabilities 29.4 25.6
Minority interest in equity of consolidated
entity 1.5 -
Stockholders' equity:
Preferred stock - -
Common stock 0.4 0.4
Capital in excess of par value 296.6 297.2
Unearned ESOP compensation (16.9) (19.3)
Retained earnings 117.9 79.3
Treasury stock (11.2) -
---------- ----------
386.8 357.6
---------- ----------
$ 785.4 $ 733.5
========== ==========
(1) Derived from audited financial statements.
LIFEPOINT HOSPITALS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
In millions
Three Months Nine Months
Ended Ended
September 30, September 30,
---------------- ----------------
2003 2002 2003 2002
------- ------- ------- -------
Cash flows from operating
activities:
Net income $ 16.2 $ 12.7 $ 49.2 $ 23.9
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and
amortization 10.8 8.9 33.4 28.0
ESOP expense 1.8 2.2 4.9 7.4
Minority interest in
earnings of consolidated
entity 0.3 0.7 0.5 2.2
Deferred income taxes 5.0 1.4 7.1 0.6
Reserve for professional
and general liability
risks, net (0.5) 2.4 3.3 7.5
Debt retirement costs - 4.2 - 30.5
Tax benefit from stock
option exercises 0.5 0.3 0.7 1.3
Increase (decrease) in cash
from operating assets
and liabilities, net of
effects from acquisitions:
Accounts receivable 1.1 3.4 (6.8) (14.8)
Inventories and other
current assets (1.0) 1.7 (4.4) (1.4)
Accounts payable and
accrued expenses 14.3 7.5 16.3 11.6
Income taxes payable (4.8) 2.4 (9.1) (0.1)
Estimated third-party
payor settlements (1.8) (7.0) (4.1) (2.6)
Other 0.2 0.5 1.2 (0.2)
------- ------- ------- -------
Net cash provided by
operating activities 42.1 41.3 92.2 93.9
Cash flows from investing
activities:
Purchases of property and
equipment, net (16.2) (15.4) (54.2) (42.2)
Purchases of facilities (15.7) - (16.3) -
Maturity of short-term
investments - 21.5 - -
Other - (0.9) 1.0 (2.2)
------- ------- ------- -------
Net cash (used in)
provided by investing
activities (31.9) 5.2 (69.5) (44.4)
Cash flows from financing
activities:
Repurchases of common stock (11.0) - (28.0) -
Repurchase 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 0.8 0.2 1.3 2.4
Proceeds from employee loans - 5.2 - 5.2
Other 0.6 (0.2) 1.1 0.1
------- ------- ------- -------
Net cash (used in)
provided by financing
activities (9.6) (17.8) (25.6) 77.1
Change in cash and cash
equivalents 0.6 28.7 (2.9) 126.6
Cash and cash equivalents at
beginning of period 19.5 155.1 23.0 57.2
------- ------- ------- -------
Cash and cash equivalents at end
of period $ 20.1 $ 183.8 $ 20.1 $ 183.8
======= ======= ======= =======
Interest payments $ 0.3 $ 0.6 $ 6.6 $ 9.0
======= ======= ======= =======
Income taxes paid, net $ 10.1 $ 5.0 $ 34.8 $ 18.2
======= ======= ======= =======
LIFEPOINT HOSPITALS, INC.
UNAUDITED STATISTICS
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- --------------------------
% %
2003 2002 Change 2003 2002 Change
-------- ------- ------ -------- -------- ------
Actual:
Number of
hospitals at end
of period 28 23 21.7% 28 23 21.7%
Licensed beds at
end of period 2,624 2,196 19.5% 2,624 2,196 19.5%
Weighted average
licensed beds 2,624 2,191 19.8% 2,622 2,195 19.5%
Average daily
census 930 799 16.4% 994 853 16.5%
Average length of
stay 3.9 4.0 (2.5%) 4.0 4.1 (2.4%)
Revenues
($ in millions) $ 227.3 $ 182.2 24.7% $ 669.8 $ 541.7 23.6%
Revenues per
equivalent
admission $ 5,126 $ 5,049 1.5% $ 5,002 $ 4,934 1.4%
Equivalent
admissions (1) 44,344 36,097 22.8% 133,910 109,799 22.0%
Outpatient
factor (1) 2.04 1.97 3.6% 1.98 1.91 3.7%
Outpatient
surgeries 20,834 16,233 28.3% 58,918 48,478 21.5%
Inpatient
surgeries 6,896 5,513 25.1% 20,250 16,897 19.8%
Emergency room
visits 110,546 89,841 23.0% 316,589 262,931 20.4%
Admissions 21,681 18,297 18.5% 67,495 57,396 17.6%
Medicare case mix
index 1.16 1.14 1.8% 1.14 1.15 (0.9%)
Net outpatient
revenues as a
percentage of
net revenues 51.2% 51.4% N/A 50.8% 50.1% N/A
Same-Hospital:(2)
Number of
hospitals at end
of period 23 23 - % 23 23 - %
Licensed beds at
end of period 2,203 2,196 0.3% 2,203 2,196 0.3%
Weighted average
licensed beds 2,203 2,191 0.5% 2,201 2,195 0.3%
Average daily
census 786 799 (1.6%) 836 853 (2.0%)
Average length of
stay 4.0 4.0 - % 4.1 4.1 - %
Revenues
($ in millions) $ 192.6 $ 182.2 5.7% $ 565.9 $ 541.7 4.5%
Revenues per
equivalent
admission $ 5,261 $ 5,048 4.2% $ 5,161 $ 4,933 4.6%
Equivalent
admissions (1) 36,602 36,097 1.4% 109,654 109,799 (0.1%)
Outpatient
factor (1) 2.01 1.97 1.8% 1.95 1.91 1.9%
Outpatient
surgeries 16,850 16,233 3.8% 48,998 48,478 1.1%
Inpatient
surgeries 5,883 5,513 6.7% 17,232 16,897 2.0%
Emergency room
visits 89,079 89,841 (0.8%) 259,732 262,931 (1.2%)
Admissions 18,205 18,297 (0.5%) 56,233 57,396 (2.0%)
Medicare case mix
index 1.17 1.14 2.6% 1.19 1.15 3.5%
Net outpatient
revenues as a
percentage of
net revenues 51.4% 51.4% N/A 50.3% 50.1% 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.
LIFEPOINT HOSPITALS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
Dollars in millions
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.
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
----------------------------- -----------------------------
2003 2002 2003 2002
-------------- -------------- -------------- --------------
Amount Ratio Amount Ratio Amount Ratio Amount Ratio
------ ------ ------ ------ ------ ------ ------ ------
Revenues $227.3 100.0% $182.2 100.0% $669.8 100.0% $541.7 100.0%
Salaries
and
benefits 90.5 39.8% 71.0 39.0% 271.6 40.6% 212.6 39.3%
Supplies 29.0 12.7% 22.6 12.4% 86.2 12.9% 67.4 12.4%
Other
operating
expenses 40.3 17.9% 35.6 19.5% 122.0 18.2% 101.1 18.6%
Provision
for
doubtful
accounts 24.2 10.6% 12.5 6.9% 58.6 8.7% 38.8 7.2%
------ ------ ------ ------ ------ ------ ------ ------
Adjusted
EBITDA $ 43.3 19.0% $ 40.5 22.2% $131.4 19.6% $121.8 22.5%
====== ====== ====== ====== ====== ====== ====== ======
The following table reconciles adjusted EBITDA as presented above
to net income as reflected in the unaudited consolidated statements of
income and in accordance with generally accepted accounting principles
(in millions):
Three Months Nine Months
Ended Ended
September 30, September 30,
-------------- --------------
2003 2002 2003 2002
------ ------ ------ ------
Adjusted EBITDA $ 43.3 $ 40.5 $131.4 $121.8
Less:
Depreciation and amortization 10.8 8.9 33.4 28.0
Interest expense, net 3.3 3.0 9.9 9.9
Debt retirement costs - 4.2 - 30.5
ESOP expense 1.8 2.2 4.9 7.4
Minority interest in earnings
of consolidated entity 0.3 0.7 0.5 2.2
Provision for income taxes 10.9 8.8 33.5 19.9
------ ------ ------ ------
Net income $ 16.2 $ 12.7 $ 49.2 $ 23.9
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CONTACT: LifePoint Hospitals Inc., Brentwood
Michael J. Culotta, 615-372-8512