Exhibit 99
LifePoint Hospitals Reports Second Quarter 2004 Results
BRENTWOOD, Tenn.--(BUSINESS WIRE)--July 27, 2004--LifePoint Hospitals, Inc.
(NASDAQ: LPNT) today announced results for the second quarter and six months
ended June 30, 2004.
For the second quarter ended June 30, 2004, revenues were $246.4 million,
up 11.2% from $221.6 million for the same period a year ago. Net income for the
quarter increased 22.1% to $18.7 million, or $0.48 per diluted share, compared
with net income of $15.3 million, or $0.40 per diluted share, for the prior-year
period.
The consolidated financial results for the second quarter ended June 30,
2004, reflect a 2.3% increase in total admissions and a 3.1% increase in
equivalent admissions compared with the second quarter of 2003. On a
same-hospital basis, total admissions increased 0.2% compared with the same
period last year, and equivalent admissions increased 0.1% over the prior-year
period.
For the six months ended June 30, 2004, revenues were $503.0 million, up
13.7% from $442.5 million for the first half of 2003. Net income for the first
half of 2004 increased 29.0% to $42.6 million, or $1.08 per diluted share,
compared with net income of $33.0 million, or $0.85 per diluted share, for the
first half of 2003.
The consolidated financial results for the six months ended June 30, 2004,
reflect a 5.5% increase in total admissions and a 5.9% increase in equivalent
admissions compared with the first half of 2003. On a same-hospital basis, total
admissions increased 3.1% compared with the first half of 2003, and equivalent
admissions increased 2.8% over the prior-year period.
Kenneth C. Donahey, president and chief executive officer of LifePoint
Hospitals, said, "Our operational strategy and focus on quality care continued
to deliver outstanding results in the second quarter. Fiscal discipline,
physician recruiting and the improving contribution from previous year
acquisitions were all factors in our strong performance. In addition, we
continued to benefit, along with our hospital communities, from the new services
and technologies we are introducing in our markets."
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.fulldisclosure.com on July 28, 2004,
beginning at 10:00 a.m. Eastern Time.
LifePoint Hospitals, Inc. operates 30 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 9,800
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 operate and 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, Inc.; (xxi) our ability to comply with all aspects of the Sarbanes-Oxley
law; and (xxii) 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
June 30,
----------------------------------
2004 2003
--------------- ---------------
Amount Ratio Amount Ratio
------ ------ ------ ------
Revenues (1) (2) $246.4 100.0% $221.6 100.0%
Salaries and benefits 101.5 41.2 90.8 41.0
Supplies 32.1 13.0 28.7 13.0
Other operating expenses 40.6 16.5 43.1 19.4
Provision for doubtful accounts 21.1 8.6 16.9 7.6
Depreciation and amortization 12.0 4.9 11.4 5.1
Interest expense, net 3.2 1.3 3.3 1.5
Debt retirement costs 1.5 0.6 -- --
ESOP expense 2.5 1.0 1.5 0.7
------ ------ ------ ------
214.5 87.1 195.7 88.3
------ ------ ------ ------
Income before minority
interests and income taxes 31.9 12.9 25.9 11.7
Minority interests in earnings
of consolidated entities 0.3 0.1 0.2 0.1
------ ------ ------ ------
Income before income taxes 31.6 12.8 25.7 11.6
Provision for income taxes 12.9 5.2 10.4 4.7
------ ------ ------ ------
Net income $18.7 7.6% $15.3 6.9%
====== ====== ====== ======
Earnings per share - basic $0.51 $0.41
====== ======
Earnings per share - diluted $0.48 $0.40
====== ======
Earnings Per Share Calculation:
Net income $18.7 $15.3
Add: Interest on convertible
notes, net of taxes 1.8 2.0
------ ------
Adjusted net income $20.5 $17.3
====== ======
Weighted average number of
shares - basic 36,925 37,402
Add: Shares for conversion of
convertible notes 5,217 5,279
Other share equivalents 955 664
------ ------
Weighted average number of
shares and equivalents - diluted 43,097 43,345
====== ======
Earnings per share - diluted $0.48 $0.40
====== ======
For the Six Months Ended
June 30,
---------------------------------
2004 2003
--------------- ---------------
Amount Ratio Amount Ratio
------ ------ ------ ------
Revenues (1) (2) $503.0 100.0% $442.5 100.0%
Salaries and benefits 202.2 40.2 181.1 40.9
Supplies 65.5 13.0 57.2 12.9
Other operating expenses 83.2 16.5 81.7 18.5
Provision for doubtful accounts 44.1 8.8 34.4 7.8
Depreciation and amortization 23.6 4.7 22.6 5.1
Interest expense, net 6.6 1.3 6.6 1.5
Debt retirement costs 1.5 0.3 -- --
ESOP expense 4.8 1.0 3.1 0.7
------ ------ ------ ------
431.5 85.8 386.7 87.4
------ ------ ------ ------
Income before minority
interests and income taxes 71.5 14.2 55.8 12.6
Minority interests in earnings
of consolidated entities 0.6 0.1 0.2 --
------ ------ ------ ------
Income before income taxes 70.9 14.1 55.6 12.6
Provision for income taxes 28.3 5.6 22.6 5.1
------ ------ ------ ------
Net income $42.6 8.5 33.0 7.5%
====== ====== ====== ======
Earnings per share - basic $1.16 $0.88
====== ======
Earnings per share - diluted $1.08 $0.85
====== ======
Earnings Per Share Calculation:
Net income $42.6 $33.0
Add: Interest on convertible
notes, net of taxes 3.8 3.9
------ ------
Adjusted net income $46.4 $36.9
====== ======
Weighted average number of
shares - basic 36,754 37,639
Add: Shares for conversion of
convertible notes 5,248 5,279
Other share equivalents 948 710
------ ------
Weighted average number of
shares and equivalents - diluted 42,950 43,628
====== ======
Earnings per share - diluted $1.08 $0.85
====== ======
(1) Adjustments to estimated reimbursement amounts increased revenues
by $0.8 million for the three months ended June 30, 2004, and by
$2.2 million for the six months ended June 30, 2004. Adjustments
to estimated reimbursement amounts increased revenues by $1.4
million for the three months ended June 30, 2003, and by $4.3
million for the six months ended June 30, 2003.
(2) Includes recognition of approximately $3.2 million of additional
revenues during the first quarter of 2004 related to a Medicare
disproportionate share designation confirmation by the Centers
for Medicare and Medicaid Services.
LIFEPOINT HOSPITALS, INC.
CONSOLIDATED BALANCE SHEETS
In millions
June 30, Dec. 31,
2004 2003
------ ------
(Unaudited) (1)
ASSETS
Current assets:
Cash and cash equivalents $18.4 $20.6
Accounts receivable, less allowances for doubtful
accounts of $99.5 and $111.7 at June 30, 2004
and December 31, 2003, respectively 104.9 101.4
Inventories 22.5 22.3
Income taxes receivable 12.5 7.4
Deferred income taxes and other current assets 23.2 19.5
------ ------
181.5 171.2
Property and equipment:
Land 20.2 19.0
Buildings and improvements 368.8 357.1
Equipment 346.0 337.2
Construction in progress 45.7 28.3
------ ------
780.7 741.6
Accumulated depreciation (293.4) (277.4)
------ ------
487.3 464.2
Deferred loan costs, net 5.6 7.0
Unallocated purchase price 26.1 16.4
Intangible assets, net 3.7 3.6
Goodwill 142.5 136.6
Other 0.2 --
------ ------
$846.9 $799.0
====== ======
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $25.3 $30.9
Accrued salaries 26.1 25.7
Other current liabilities 22.3 9.7
Estimated third-party payor settlements 1.3 2.5
------ ------
75.0 68.8
Revolving credit facility 30.0 20.0
Convertible notes 221.0 250.0
Deferred income taxes 35.5 35.9
Professional and general liability claims
and other liabilities 29.0 28.6
Minority interests in equity
of consolidated entities 1.4 1.4
Stockholders' equity:
Preferred stock -- --
Common stock 0.4 0.4
Capital in excess of par value 324.1 301.7
Unearned ESOP compensation (14.5) (16.1)
Unearned compensation on nonvested stock (5.9) --
Retained earnings 179.8 137.2
Treasury stock (28.9) (28.9)
------ ------
455.0 394.3
------ ------
$846.9 $799.0
====== ======
(1) Derived from audited financial statements.
LIFEPOINT HOSPITALS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
In millions
Three Months Ended Six Months Ended
June 30, June 30,
--------------- ---------------
2004 2003 2004 2003
------ ------ ------ ------
Cash flows from
operating activities:
Net income $18.7 $15.3 $42.6 $33.0
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 12.0 11.4 23.6 22.6
Debt retirement costs 1.5 -- 1.5 --
ESOP expense 2.5 1.5 4.8 3.1
Minority interests in earnings
of consolidated entities 0.3 0.2 0.6 0.2
Deferred income taxes (benefit) (0.4) 2.2 (0.9) 2.1
Reserve for professional and
general liability claims, net (2.2) 2.6 0.5 3.8
Tax benefit from employee
stock plans 3.8 0.2 4.3 0.2
Increase (decrease) in cash
from operating assets and
liabilities, net of effects
from acquisitions:
Accounts receivable 5.3 3.2 (3.2) (7.9)
Inventories and other
current assets (3.2) (0.6) (3.3) (3.4)
Accounts payable and
accrued expenses 1.6 (0.4) 6.5 2.0
Income taxes payable (19.7) (16.1) (5.1) (4.3)
Estimated third-party
payor settlements (1.1) (3.7) (1.2) (2.3)
Other 0.6 0.1 1.2 1.0
------ ------ ------ ------
Net cash provided by
operating activities 19.7 15.9 71.9 50.1
Cash flows from
investing activities:
Purchase of property
and equipment (20.3) (20.8) (35.4) (38.0)
Purchase of facilities, net
of cash acquired (24.8) -- (26.5) --
Other (0.3) 0.6 (0.6) 0.4
------ ------ ------ ------
Net cash used in
investing activities (45.4) (20.2) (62.5) (37.6)
Cash flows from
financing activities:
Repurchase of convertible notes (29.9) -- (29.9) --
Borrowing under revolving
credit facility 30.0 -- 30.0 --
Repayment under revolving
credit facility -- -- (20.0) --
Repurchase of common stock -- (17.0) -- (17.0)
Proceeds from exercise of
stock options 5.9 0.3 7.5 0.5
Other -- 0.2 0.8 0.5
------ ------ ------ ------
Net cash provided by (used
in) financing activities 6.0 (16.5) (11.6) (16.0)
Change in cash and cash equivalents (19.7) (20.8) (2.2) (3.5)
Cash and cash equivalents at
beginning of period 38.1 40.3 20.6 23.0
------ ------ ------ ------
Cash and cash equivalents at
end of period $18.4 $19.5 $18.4 $19.5
====== ====== ====== ======
Interest payments $6.1 $6.1 $6.7 $6.3
====== ====== ====== ======
Income taxes paid, net $29.1 $24.3 $30.0 $24.7
====== ====== ====== ======
LIFEPOINT HOSPITALS, INC.
UNAUDITED STATISTICS
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
% %
2004 2003 Change 2004 2003 Change
------- ------- ------- ------- ------- --------
Consolidated:
Number of hospitals
at end of period 29 28 3.6% 29 28 3.6%
Licensed beds at
end of period 2,687 2,624 2.4 2,687 2,624 2.4
Weighted average
licensed beds 2,692 2,624 2.6 2,711 2,622 3.4
Average daily census 1,006 997 0.9 1,081 1,026 5.4
Average length
of stay 4.0 4.1 (2.4) 4.1 4.1 --
Revenues
($ in millions) $246.4 $221.6 11.2 $503.0 $442.5 13.7
Revenues per
equivalent admission $5,349 $4,962 7.8 $5,300 $4,940 7.3
Equivalent
admissions (1) 46,051 44,654 3.1 94,893 89,566 5.9
Outpatient factor (1) 2.02 2.00 1.0 1.96 1.96 --
Outpatient surgeries 19,113 18,479 3.4 38,455 36,619 5.0
Inpatient surgeries 7,049 6,390 10.3 14,121 12,690 11.3
Emergency room visits 109,613 106,305 3.1 215,367 206,043 4.5
Admissions 22,851 22,337 2.3 48,316 45,814 5.5
Medicare case
mix index 1.18 1.18 -- 1.17 1.19 (1.7)
Net outpatient
revenues as a
percentage of
net revenues 50.1% 50.9% N/M(2) 50.0% 50.5% N/M(2)
Same-Hospital: (3)
Number of hospitals
at end of period 28 28 -- 28 28 --
Licensed beds at
end of period 2,612 2,624 (0.5) 2,612 2,624 (0.5)
Weighted average
licensed beds 2,617 2,624 (0.3) 2,617 2,622 (0.2)
Average daily census 988 997 (0.9) 1,060 1,026 3.3
Average length
of stay 4.0 4.1 (2.4) 4.1 4.1 --
Revenues
($ in millions) $240.1 $221.6 8.4 $490.1 $442.5 10.8
Revenues per
equivalent admission $5,370 $4,962 8.2 $5,324 $4,940 7.8
Equivalent
admissions (1) 44,703 44,654 0.1 92,067 89,566 2.8
Outpatient factor (1) 2.00 2.00 -- 1.95 1.96 (0.5)
Outpatient surgeries 18,422 18,479 (0.3) 37,060 36,619 1.2
Inpatient surgeries 6,888 6,390 7.8 13,753 12,690 8.4
Emergency room visits 105,745 106,305 (0.5) 208,273 206,043 1.1
Admissions 22,375 22,337 0.2 47,238 45,814 3.1
Medicare case
mix index 1.18 1.18 -- 1.17 1.19 (1.7)
Net outpatient
revenues as a
percentage of
net revenues 49.7% 50.9% N/M(2) 49.7% 50.5% N/M(2)
(1) Management and investors use equivalent admissions as a general
measure of combined inpatient and outpatient volume. Equivalent
admissions is computed by multiplying admissions (inpatient
volumes) by the outpatient factor (the 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 after January 1, 2003.
LIFEPOINT HOSPITALS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
Dollars in millions
Adjusted EBITDA is defined as earnings before depreciation and
amortization, interest expense, debt retirement costs, ESOP expense,
minority interests in earnings of consolidated entities and income
taxes. Our management uses adjusted EBITDA to evaluate our operating
performance and as a measure of performance for incentive compensation
purposes. Our revolving 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
June 30,
2004 2003
--------------- ---------------
Amount Ratio Amount Ratio
------ ------ ------ ------
Revenues $246.4 100.0% 221.6 100.0%
Salaries and benefits 101.5 41.2 90.8 41.0
Supplies 32.1 13.0 28.7 13.0
Other operating expenses 40.6 16.5 43.1 19.4
Provision for
doubtful accounts 21.1 8.6 16.9 7.6
------ ------ ------ ------
Adjusted EBITDA $51.1 20.7% $42.1 19.0%
====== ====== ====== ======
For the Six Months Ended
June 30,
2004 2003
--------------- ---------------
Amount Ratio Amount Ratio
------ ------ ------ ------
Revenues $503.0 100.0% $442.5 100.0%
Salaries and benefits 202.2 40.2 181.1 0.9
Supplies 65.5 13.0 57.2 12.9
Other operating expenses 83.2 16.5 81.7 18.5
Provision for
doubtful accounts 44.1 8.8 34.4 7.8
------ ------ ------ ------
Adjusted EBITDA $108.0 21.5% $88.1 19.9%
====== ====== ====== ======
The following table reconciles adjusted EBITDA as presented above to
net income as reflected in the unaudited consolidated statements of
income (in millions):
Three Months Ended Six Months Ended
June 30, June 30,
--------------- ---------------
2004 2003 2004 2003
------ ------ ------ ------
Adjusted EBITDA $51.1 $42.1 $108.0 $88.1
Less:
Depreciation and amortization 12.0 11.4 23.6 22.6
Interest expense, net 3.2 3.3 6.6 6.6
Debt retirement costs 1.5 -- 1.5 --
ESOP expense 2.5 1.5 4.8 3.1
Minority interests in earnings
of consolidated entities 0.3 0.2 0.6 0.2
Provision for income taxes 12.9 10.4 28.3 22.6
------ ------ ------ ------
Net income $18.7 $15.3 $42.6 $33.0
====== ====== ====== ======
CONTACT: LifePoint Hospitals, Inc., Brentwood
Michael J. Culotta, 615-372-8512