Exhibit 99.1
LifePoint Hospitals Reports Fourth Quarter
and Year-End 2003 Results
BRENTWOOD, Tenn.--(BUSINESS WIRE)--Feb. 17, 2004--LifePoint
Hospitals, Inc. (NASDAQ: LPNT) today announced results for the fourth
quarter and year ended December 31, 2003.
For the fourth quarter ended December 31, 2003, revenues were
$237.3 million, up 17.5% from $201.9 million a year ago. Net income
for the quarter totaled $19.3 million, or $0.50 per diluted share,
versus net income of $17.6 million, or $0.44 per diluted share, for
the prior-year period.
The consolidated financial results for the fourth quarter ended
December 31, 2003, reflect a 20.3% increase in total admissions and a
21.9% increase in equivalent admissions compared with the fourth
quarter of 2002. On a same-hospital basis, total admissions increased
4.3%, compared with the same period last year, and equivalent
admissions increased 4.6% over the prior-year period.
For the year ended December 31, 2003, revenues were $907.1
million, up 22.0% from $743.6 million a year ago. For the year ended
December 31, 2003, prior-year contractual adjustments increased
revenues by $6.0 million, or $0.08 per diluted share, compared with
$13.0 million, or $0.17 per diluted share, including related legal
costs of $0.9 million, for the year ended December 31, 2002. Net
income for the year ended December 31, 2003, totaled $68.5 million, or
$1.76 per diluted share, versus net income of $41.5 million, or $1.07
per diluted share, for the prior-year period. Included in net income
for the year ended December 31, 2002, was $31.0 million, or $0.50 per
diluted share, of pre-tax debt retirement costs.
The consolidated financial results for the year ended December 31,
2003, reflect an 18.3% increase in total admissions and a 21.9%
increase in equivalent admissions compared with 2002. On a
same-hospital basis, revenues per equivalent admission increased 3.1%
compared with last year, with a 0.5% decrease in admissions and a 1.0%
increase in equivalent admissions.
Kenneth C. Donahey, chairman and chief executive officer of
LifePoint Hospitals, said, "I am very proud of the accomplishments
that our hospitals and our employees made in 2003. By focusing on our
business plan and maintaining fiscal discipline, we were successful in
achieving our financial goals. We are excited about the opportunities
that we have in 2004. An improved reimbursement environment, continued
success in physician recruitment and further expansion of our services
in our hospital communities, among other things, make us optimistic
about our prospects for 2004."
A listen-only simulcast, as well as a 30-day replay, of LifePoint
Hospitals' fourth quarter and year-end conference call will be
available on-line at www.lifepointhospitals.com and
www.fulldisclosure.com on February 18, 2004, 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) the successful development and 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
December 31,
2003 2002
---------------- ----------------
Amount Ratio Amount Ratio
------- ------- ------- -------
Revenues (1) $237.3 100.0% $201.9 100.0%
Salaries and benefits 93.4 39.3% 78.8 39.0%
Supplies 31.9 13.4% 24.8 12.3%
Other operating expenses 40.8 17.2% 36.0 17.9%
Provision for doubtful accounts 22.9 9.7% 16.4 8.1%
Depreciation and amortization 12.3 5.3% 9.9 4.9%
Interest expense, net 2.9 1.2% 3.4 1.7%
Debt retirement costs -- -- % 0.5 0.3%
ESOP expense 2.0 0.8% 2.3 1.1%
------- ------- ------- -------
206.2 86.9% 172.1 85.3%
------- ------- ------- -------
Income before minority
interest and income taxes 31.1 13.1% 29.8 14.7%
Minority interest in earnings
of consolidated entity 0.2 0.1% -- -- %
------- ------- ------- -------
Income before income taxes 30.9 13.0% 29.8 14.7%
Provision for income taxes 11.6 4.9% 12.2 6.0%
------- ------- ------- -------
Net income $19.3 8.1% $17.6 8.7%
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Earnings per share - basic $0.53 $0.47
======= =======
Earnings per share - diluted (2) $0.50 $0.44
======= =======
Earnings Per Share Calculation:
Net income $19.3 $17.6
Add: Interest on convertible
notes, net of taxes 1.9 1.9
------- -------
Adjusted net income $21.2 $19.5
======= =======
Weighted average number of
shares - basic 36,360 37,736
Add: Shares for conversion of
convertible notes 5,279 5,279
Other share equivalents 881 995
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Weighted average number of
shares and equivalents - diluted 42,450 44,010
======= =======
Earnings per share - diluted (2) $0.50 $0.44
======= =======
For the Year Ended
December 31,
2003 2002
---------------- ----------------
Amount Ratio Amount Ratio
------- ------- ------- -------
Revenues (1) $907.1 100.0% $743.6 100.0%
Salaries and benefits 365.0 40.2% 291.4 39.2%
Supplies 118.1 13.0% 92.2 12.4%
Other operating expenses 162.8 18.0% 137.1 18.4%
Provision for doubtful accounts 81.5 9.0% 55.2 7.4%
Depreciation and amortization 45.7 5.0% 37.9 5.1%
Interest expense, net 12.8 1.4% 13.3 1.8%
Debt retirement costs -- -- % 31.0 4.2%
ESOP expense 6.9 0.8% 9.7 1.3%
------- ------- ------- -------
792.8 87.4% 667.8 89.8%
------- ------- ------- -------
Income before minority
interest and income taxes 114.3 12.6% 75.8 10.2%
Minority interest in earnings
of consolidated entity 0.7 0.1% 2.2 0.3%
------- ------- ------- -------
Income before income taxes 113.6 12.5% 73.6 9.9%
Provision for income taxes 45.1 4.9% 32.1 4.3%
------- ------- ------- -------
Net income $68.5 7.6% $41.5 5.6%
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Earnings per share - basic $1.84 $1.11
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Earnings per share - diluted (2) $1.76 $1.07
======= =======
Earnings Per Share Calculation:
Net income $68.5 $41.5
Add: Interest on convertible
notes, net of taxes 7.8 --
------- -------
Adjusted net income $76.3 $41.5
======= =======
Weighted average number of
shares - basic 37,216 37,536
Add: Shares for conversion of
convertible notes 5,279 --
Other share equivalents 793 1,091
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Weighted average number of
shares and equivalents - diluted 43,288 38,627
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Earnings per share - diluted (2) $1.76 $1.07
======= =======
(1) Prior-year contractual adjustments increased revenues by $5.1
million, or $0.07 per diluted share, for the three months ended
December 31, 2002. Prior-year contractual adjustments increased
revenues by $6.0 million, or $0.08 per diluted share, for the
year ended December 31, 2003, and by $13.0 million, or $0.17 per
diluted share, including related costs of $0.9 million, for the
year ended December 31, 2002.
(2) The impact of 3.3 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 year ended December 31, 2002, because
the effect would have been anti-dilutive.
LIFEPOINT HOSPITALS, INC.
CONSOLIDATED BALANCE SHEETS
In millions
Dec. 31, Dec. 31,
2003 2002
------- -------
(Unaudited) (1)
ASSETS
Current assets:
Cash and cash equivalents $20.6 $23.0
Accounts receivable, less allowances for doubtful
accounts of $111.7 and $109.1 at December 31, 2003
and December 31, 2002, respectively 101.4 85.0
Inventories 22.3 20.5
Income taxes receivable 7.4 --
Deferred income taxes and other current assets 19.5 14.8
------- -------
171.2 143.3
Property and equipment:
Land 19.0 11.3
Buildings and improvements 357.1 285.3
Equipment 337.2 295.5
Construction in progress 28.3 18.1
------- -------
741.6 610.2
Accumulated depreciation (277.4) (238.0)
------- -------
464.2 372.2
Deferred loan costs, net 7.0 8.6
Unallocated purchase price 16.4 136.1
Intangible assets, net 3.6 3.8
Other -- 0.3
Goodwill 136.6 69.2
------- -------
$799.0 $733.5
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LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $30.9 $28.5
Accrued salaries 25.7 24.4
Other current liabilities 9.7 14.3
Estimated third-party payor settlements 2.5 8.2
------- -------
68.8 75.4
Long-term debt 270.0 250.0
Deferred income taxes 35.9 24.9
Professional and general liability
risks and other liabilities 28.6 25.6
Minority interest in equity of consolidated entity 1.4 --
Stockholders' equity:
Preferred stock -- --
Common stock 0.4 0.4
Capital in excess of par value 301.7 297.2
Unearned ESOP compensation (16.1) (19.3)
Retained earnings 137.2 79.3
Treasury stock (28.9) --
------- -------
394.3 357.6
------- -------
$799.0 $733.5
======= =======
(1) Derived from audited financial statements.
LIFEPOINT HOSPITALS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
In millions
Three Months Ended Year Ended
December 31, December 31,
---------------- ----------------
2003 2002 2003 2002
------- ------- ------- -------
Cash flows from
operating activities:
Net income $19.3 $17.6 $68.5 $41.5
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 12.3 9.9 45.7 37.9
ESOP expense 2.0 2.3 6.9 9.7
Minority interest in earnings
of consolidated entity 0.2 -- 0.7 2.2
Deferred income taxes 1.8 2.4 8.9 3.0
Reserve for professional and
general liability risks, net (0.9) 1.7 2.4 9.2
Debt retirement costs -- 0.6 -- 31.0
Tax benefit from stock
option exercises 1.6 0.4 2.3 1.7
Increase (decrease) in cash
from operating assets and
liabilities, net of effects
from acquisitions:
Accounts receivable (9.1) (2.1) (15.9) (16.9)
Inventories and other
current assets (0.4) (1.8) (4.8) (3.2)
Accounts payable and
accrued expenses (15.0) (9.9) 1.3 1.7
Income taxes payable 1.6 7.0 (7.5) 6.9
Estimated third-party
payor settlements (1.6) (7.5) (5.7) (10.1)
Other 0.6 0.3 1.8 0.2
------- ------- ------- -------
Net cash provided by
operating activities 12.4 20.9 104.6 114.8
Cash flows from
investing activities:
Purchases of property and
equipment, net (16.0) (18.5) (70.2) (60.7)
Purchases of facilities (0.2) (137.1) (16.5) (137.1)
Purchase of minority interest
in joint venture -- (25.0) -- (25.0)
Other (0.3) 0.3 0.7 (1.9)
------- ------- ------- -------
Net cash used in
investing activities (16.5) (180.3) (86.0) (224.7)
Cash flows from
financing activities:
Repurchases of common stock (17.7) -- (45.7) --
Borrowings under bank
credit facility 20.0 -- 20.0 --
Repurchase of senior
subordinated notes -- (3.4) -- (176.5)
Proceeds from issuance of
convertible notes, net -- -- -- 242.5
Proceeds from exercise
of stock options 2.4 0.6 3.7 3.0
Proceeds from employee loans -- 0.5 -- 5.7
Other (0.1) 0.9 1.0 1.0
------- ------- ------- -------
Net cash provided by (used in)
financing activities 4.6 (1.4) (21.0) 75.7
Change in cash and
cash equivalents 0.5 (160.8) (2.4) (34.2)
Cash and cash equivalents
at beginning of period 20.1 183.8 23.0 57.2
------- ------- ------- -------
Cash and cash equivalents
at end of period $20.6 $23.0 $20.6 $23.0
======= ======= ======= =======
Interest payments $5.8 $7.3 $12.4 $16.3
======= ======= ======= =======
Income taxes paid, net $6.6 $2.8 $41.4 $21.0
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LIFEPOINT HOSPITALS, INC
UNAUDITED STATISTICS
Three Months Ended
December 31,
-------------------------
%
2003 2002 Change
------- ------- -------
Actual:
Number of hospitals at end of period 29 28 3.6%
Licensed beds at end of period 2,737 2,617 4.6%
Weighted average licensed beds 2,737 2,404 13.9%
Average daily census 1,078 901 19.6%
Average length of stay 4.0 4.0 -- %
Revenues ($ in millions) $237.3 $201.9 17.5%
Revenues per equivalent admission $4,948 $5,131 (3.6%)
Equivalent admissions (1) 47,969 39,353 21.9%
Outpatient factor (1) 1.95 1.92 1.5%
Outpatient surgeries 18,201 17,067 6.6%
Inpatient surgeries 6,951 6,133 13.3%
Emergency room visits 117,835 92,960 26.8%
Admissions 24,689 20,531 20.3%
Medicare case mix index 1.16 1.15 0.9%
Net outpatient revenues as a
percentage of net revenues 46.6% 48.9% N/M (2)
Same-Hospital: (3)
Number of hospitals at end of period 23 23 -- %
Licensed beds at end of period 2,203 2,196 0.3%
Weighted average licensed beds 2,203 2,196 0.3%
Average daily census 875 831 5.3%
Average length of stay 4.1 4.1 -- %
Revenues ($ in millions) $194.7 $188.5 3.3%
Revenues per equivalent admission $5,186 $5,251 (1.2%)
Equivalent admissions (1) 37,540 35,893 4.6%
Outpatient factor (1) 1.92 1.92 -- %
Outpatient surgeries 16,361 15,939 2.6%
Inpatient surgeries 5,655 5,706 (0.9%)
Emergency room visits 93,683 84,337 11.1%
Admissions 19,562 18,763 4.3%
Medicare case mix index 1.17 1.17 -- %
Net outpatient revenues as a
percentage of net revenues 48.2% 49.3% N/M (2)
Year Ended
December 31,
-------------------------
%
2003 2002 Change
------- ------- -------
Number of hospitals at end of period 29 28 3.6%
Licensed beds at end of period 2,737 2,617 4.6%
Weighted average licensed beds 2,651 2,248 17.9%
Average daily census 1,015 865 17.3%
Average length of stay 4.0 4.1 (2.4%)
Revenues ($ in millions) $907.1 $743.6 22.0%
Revenues per equivalent admission $4,988 $4,986 -- %
Equivalent admissions (1) 181,879 149,152 21.9%
Outpatient factor (1) 1.97 1.91 3.1%
Outpatient surgeries 77,119 65,545 17.7%
Inpatient surgeries 27,201 23,030 18.1%
Emergency room visits 434,424 355,891 22.1%
Admissions 92,184 77,927 18.3%
Medicare case mix index 1.17 1.15 1.8%
Net outpatient revenues as a
percentage of net revenues 49.7% 49.8% N/M (2)
Same-Hospital: (3)
Number of hospitals at end of period 23 23 -- %
Licensed beds at end of period 2,203 2,196 0.3%
Weighted average licensed beds 2,202 2,195 0.3%
Average daily census 846 847 (0.1%)
Average length of stay 4.1 4.1 -- %
Revenues ($ in millions) $760.6 $730.2 4.2%
Revenues per equivalent admission $5,167 $5,012 3.1%
Equivalent admissions (1) 147,194 145,692 1.0%
Outpatient factor (1) 1.94 1.91 1.4%
Outpatient surgeries 65,359 64,417 1.5%
Inpatient surgeries 22,887 22,603 1.3%
Emergency room visits 353,415 347,268 1.8%
Admissions 75,795 76,159 (0.5%)
Medicare case mix index 1.18 1.16 1.7%
Net outpatient revenues as a
percentage of net revenues 49.7% 49.9% N/M (2)
(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) Not meaningful.
(3) 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. Our bank credit facility uses adjusted EBITDA for numerous
financial covenants. 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
December 31,
2003 2002
---------------- ----------------
Amount Ratio Amount Ratio
------- ------- ------- -------
Revenues $237.3 100.0% $201.9 100.0%
Salaries and benefits 93.4 39.3% 78.8 39.0%
Supplies 31.9 13.4% 24.8 12.3%
Other operating expenses 40.8 17.2% 36.0 17.9%
Provision for doubtful accounts 22.9 9.7% 16.4 8.1%
------- ------- ------- -------
Adjusted EBITDA $48.3 20.4% $45.9 22.7%
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For the Year Ended
December 31,
2003 2002
--------------- ----------------
Amount Ratio Amount Ratio
------- ------- ------- --------
Revenues $907.1 100.0% $743.6 100.0%
Salaries and benefits 365.0 40.2% 291.4 39.2%
Supplies 118.1 13.0% 92.2 12.4%
Other operating expenses 162.8 18.0% 137.1 18.4%
Provision for doubtful accounts 81.5 9.0% 55.2 7.4%
------- ------- ------- -------
Adjusted EBITDA $179.7 19.8% $167.7 22.6%
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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 Ended Year Ended
December 31, December 31,
---------------- ----------------
2003 2002 2003 2002
------- ------- ------- -------
Adjusted EBITDA $48.3 $45.9 $179.7 $167.7
Less:
Depreciation and amortization 12.3 9.9 45.7 37.9
Interest expense, net 2.9 3.4 12.8 13.3
Debt retirement costs -- 0.5 -- 31.0
ESOP expense 2.0 2.3 6.9 9.7
Minority interest in earnings
of consolidated entity 0.2 -- 0.7 2.2
Provision for income taxes 11.6 12.2 45.1 32.1
------- ------- ------- -------
Net income $19.3 $17.6 $68.5 $41.5
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CONTACT: LifePoint Hospitals Inc., Brentwood
Michael J. Culotta, 615-372-8512