Exhibit 99.1
LifePoint Hospitals Reports Solid First Quarter 2006 Results
BRENTWOOD, Tenn.--(BUSINESS WIRE)--April 27, 2006--LifePoint
Hospitals, Inc. (NASDAQ: LPNT) today announced results for the first
quarter ended March 31, 2006. The Company's consolidated results
include the operations of Province hospitals subsequent to the
combination date of April 15, 2005.
For the first quarter ended March 31, 2006, revenues from
continuing operations were $589.6 million, up 116.8% from $272.0
million for the same period a year ago. Income from continuing
operations for the quarter was $33.8 million, or $0.60 per diluted
share, compared with income from continuing operations of $25.8
million, or $0.63 per diluted share, for the prior-year period. Net
income for the quarter was $38.1 million, or $0.68 per diluted share,
compared with net income of $25.8 million, or $0.63 per diluted share,
for the prior-year period. The results of the first quarter of 2006
include a $0.07 gain per diluted share related to the sale of Smith
County Memorial Hospital. During the first quarter of 2006, Smith
County Memorial Hospital was reclassified to discontinued operations
for all periods presented.
In commenting on the first quarter results, Kenneth C. Donahey,
chairman, president and chief executive officer of LifePoint
Hospitals, said, "We are pleased with our first quarter performance,
which we view as a strong start for 2006. We appreciate the support of
our loyal stockholders, and we look forward to continuing to implement
our proven strategy during 2006. We are deeply focused on our core
competencies and will remain focused on our long-term results."
A listen-only simulcast, as well as a 30-day replay, of LifePoint
Hospitals' first quarter conference call will be available on line at
www.lifepointhospitals.com and www.earnings.com on April 28, 2006,
beginning at 10:00 a.m. Eastern Time.
LifePoint Hospitals, Inc. is a leading hospital company focused on
providing healthcare services in non-urban communities. Of the
Company's 51 hospitals, 49 are in communities where LifePoint
Hospitals is the sole community hospital provider. LifePoint
Hospitals' non-urban operating strategy offers continued operational
improvement by focusing on its five core values: delivering
compassionate, 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 approximately 19,000
employees.
Important Legal Information
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 LifePoint Hospitals' future results are beyond
LifePoint Hospitals' ability to control or predict with accuracy. Such
forward-looking statements reflect the current expectations and
beliefs of the management of LifePoint Hospitals, are not guarantees
of performance of LifePoint Hospitals, and are subject to a number of
risks, uncertainties, assumptions and other factors that could cause
actual results to differ from those described in the forward-looking
statements. These forward-looking statements may also be subject to
other risks and uncertainties, including, without limitation, (i) the
possibility that problems may arise in successfully integrating the
businesses of LifePoint Hospitals and Province and achieving
cost-cutting synergies or the ability to acquire hospitals on
favorable terms and complete budgeted capital improvements
successfully; (ii) reduction in payments to healthcare providers by
government and commercial third-party payors, as well as changes in
the manner in which employers provide healthcare coverage to their
employees; (iii) the possibility of adverse changes in, and
requirements of, applicable laws, regulations, policies and
procedures, including those required by LifePoint Hospitals' corporate
integrity agreement; (iv) the ability to manage healthcare risks,
including malpractice litigation, and the lack of state and federal
tort reform; (v) the availability, cost and terms of insurance
coverage; (vi) the highly competitive nature of the healthcare
business, including the competition to recruit and retain physicians
and other healthcare professionals; (vii) the ability to attract and
retain qualified management and personnel; (viii) the geographic
concentration of LifePoint Hospitals' operations; (ix) changes in the
Company's operating or expansion strategy; (x) the ability to operate
and integrate newly acquired facilities successfully; (xi) the
availability and terms of capital to fund LifePoint Hospitals'
business strategies; (xii) changes in LifePoint Hospitals' liquidity
or the amount or terms of its indebtedness and in its credit ratings;
(xiii) the potential adverse impact of government investigations and
litigation involving the business practices of healthcare providers,
including whistleblowers investigations; (xiv) changes in or
interpretations of generally accepted accounting principles or
practices; (xv) volatility in the market value of LifePoint Hospitals'
common stock; (xvi) changes in general economic conditions in the
markets LifePoint Hospitals serves; (xvii) LifePoint Hospitals'
reliance on information technology systems maintained by HCA Inc.;
(xviii) the costs of complying with the Americans with Disabilities
Act; (xix) possible adverse rulings, judgments, settlements and other
outcomes of pending litigation; and (xx) those risks and uncertainties
described from time to time in LifePoint Hospitals' filings with the
Securities and Exchange Commission. Therefore, LifePoint Hospitals'
future results may differ materially from those described in this
release. LifePoint Hospitals undertakes 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 "LifePoint Hospitals" as used throughout this
release refer to LifePoint Hospitals, Inc. and its subsidiaries.
LIFEPOINT HOSPITALS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Dollars in millions, except per share amounts
Three Months Ended
March 31,
----------------------------------
2006 2005
---------------- ----------------
Amount Ratio Amount Ratio
------- ------- ------- -------
Revenues $589.6 100.0% $272.0 100.0%
Salaries and benefits 231.1 39.2 109.6 40.4
Supplies 82.7 14.0 35.9 13.2
Other operating expenses 95.7 16.2 44.8 16.4
Provision for doubtful accounts 68.4 11.6 22.9 8.4
Depreciation and amortization 31.9 5.5 13.2 4.8
Interest expense, net 23.2 3.9 2.4 0.9
------- ------- ------- -------
533.0 90.4 228.8 84.1
------- ------- ------- -------
Income from continuing operations
before minority interests and
income taxes 56.6 9.6 43.2 15.9
Minority interests in earnings
of consolidated entities 0.3 -- 0.3 0.1
------- ------- ------- -------
Income from continuing operations
before income taxes 56.3 9.6 42.9 15.8
Provision for income taxes 22.5 3.9 17.1 6.3
------- ------- ------- -------
Income from continuing operations 33.8 5.7 25.8 9.5
Discontinued operations,
net of income taxes:
Income (loss) from
discontinued operations (0.2) -- 0.8 0.3
Gain (loss) on sale of hospital 3.8 0.6 (0.8) (0.3)
------- ------- ------- -------
Income from
discontinued operations 3.6 0.6 -- --
Cumulative effect of change
in accounting principle,
net of income taxes 0.7 0.2 -- --
------- ------- ------- -------
Net income $38.1 6.5% $25.8 9.5%
======= ======= ======= =======
Basic earnings per share:
Continuing operations $0.61 $0.68
Discontinued operations 0.07 --
Cumulative effect of change in
accounting principle 0.01 --
------- -------
Net income $0.69 $0.68
======= =======
Diluted earnings per share:
Continuing operations $0.60 $0.63
Discontinued operations 0.07 --
Cumulative effect of change
in accounting principle 0.01 --
------- -------
Net income $0.68 $0.63
======= =======
LIFEPOINT HOSPITALS, INC.
UNAUDITED EARNINGS (LOSS) PER SHARE CALCULATION
Dollars and shares in millions, except per share amounts
Three Months Ended
March 31,
------------------
2006 2005
-------- --------
Income from continuing operations $33.8 $25.8
Add: Interest on convertible notes,
net of income taxes -- 1.7
-------- --------
Adjusted income from continuing operations 33.8 27.5
Income from discontinued operations,
net of income taxes 3.6 --
Cumulative effect of change in accounting
principle, net of income taxes 0.7 --
-------- --------
$38.1 $27.5
======== ========
Basic weighted average number of shares 55.5 37.8
Add: Shares for conversion of convertible notes -- 4.7
Other share equivalents 0.6 0.9
-------- --------
Diluted weighted average number
of shares and equivalents 56.1 43.4
======== ========
Basic earnings (loss) per share:
Continuing operations $0.61 $0.68
Discontinued operations:
Income from discontinued operations -- 0.02
Gain (loss) on sale of hospital 0.07 (0.02)
-------- --------
Income from discontinued operations 0.07 --
Cumulative effect of change in
accounting principle 0.01 --
-------- --------
Net income $0.69 $0.68
======== ========
Diluted earnings (loss) per share:
Continuing operations $0.60 $0.63
Discontinued operations:
Income from discontinued operations -- 0.02
Gain (loss) on sale of hospital 0.07 (0.02)
-------- --------
Income from discontinued operations 0.07 --
Cumulative effect of change in
accounting principle 0.01 --
-------- --------
Net income $0.68 $0.63
======== ========
LIFEPOINT HOSPITALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
In millions
March 31, Dec. 31,
2006 2005
-------- --------
ASSETS (Unaudited) (1)
Current assets:
Cash and cash equivalents $53.1 $30.4
Accounts receivable, less allowances for doubtful
accounts of $261.5 and $252.9 at March 31, 2006
and December 31, 2005, respectively 264.1 256.8
Inventories 57.1 56.9
Assets held for sale 10.0 22.0
Prepaid expenses 11.7 12.0
Deferred tax assets 50.2 44.2
Other current assets 13.8 11.0
-------- --------
460.0 433.3
Property and equipment:
Land 70.8 64.4
Buildings and improvements 1,023.5 986.9
Equipment 528.5 540.3
Construction in progress 59.6 77.8
-------- --------
1,682.4 1,669.4
Accumulated depreciation (402.3) (373.1)
-------- --------
1,280.1 1,296.3
Deferred loan costs, net 34.5 35.4
Intangible assets, net 6.9 4.2
Other 5.8 5.5
Goodwill 1,478.7 1,449.9
-------- --------
$3,266.0 $3,224.6
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $75.8 $85.6
Accrued salaries 55.5 58.7
Other current liabilities 91.9 85.3
Current maturities of long-term debt 0.5 0.5
-------- --------
223.7 230.1
Long-term debt 1,515.7 1,515.8
Deferred income taxes 125.0 124.0
Professional and general liability claims
and other liabilities 62.6 60.3
Minority interests in equity of
consolidated entities 6.6 6.6
Stockholders' equity:
Preferred stock -- --
Common stock 0.6 0.6
Capital in excess of par value 1,027.9 1,053.1
Unearned ESOP compensation (9.0) (9.7)
Unearned compensation on non-vested stock -- (31.0)
Retained earnings 312.9 274.8
-------- --------
1,332.4 1,287.8
-------- --------
$3,266.0 $3,224.6
======== ========
(1) Derived from audited financial statements.
LIFEPOINT HOSPITALS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
In millions
Three Months Ended
March 31,
------------------
2006 2005
-------- --------
Cash flows from operating activities:
Net income $38.1 $25.8
Adjustments to reconcile net income to net cash
provided by operating activities:
Income from discontinued operations (3.6) --
Cumulative effect of change in accounting
principle, net of income taxes (0.7) --
Stock-based compensation 3.2 0.5
ESOP expense (non-cash portion) 2.4 2.6
Depreciation and amortization 31.9 13.2
Amortization of deferred loan costs 1.3 0.4
Minority interests in earnings
of consolidated entities 0.3 0.3
Deferred income taxes (benefit) (3.1) 0.9
Reserve for professional and general
liability claims, net 1.8 0.4
Excess tax benefits from employee stock plans -- 2.3
Increase (decrease) in cash from operating
assets and liabilities, net of effects from
acquisitions and divestitures:
Accounts receivable (9.4) (4.8)
Inventories and other current assets (3.2) 2.9
Accounts payable and accrued expenses (16.6) 2.5
Income taxes payable 12.7 14.1
Other 0.5 (0.1)
-------- --------
Net cash provided by operating
activities - continuing operations 55.6 61.0
Net cash (used in) provided by operating
activities - discontinued operations (0.4) 0.1
-------- --------
Net cash provided by operating activities 55.2 61.1
-------- --------
Cash flows from investing activities:
Purchase of property and equipment (50.1) (27.1)
Acquisitions, net of cash acquired (3.5) (2.0)
Other (0.3) (0.4)
-------- --------
Net cash used in investing
activities - continuing operations (53.9) (29.5)
Net cash provided by investing
activities - discontinued operations
(Proceeds from sale of hospitals) 19.9 32.5
-------- --------
Net cash (used in) provided by
investing activities (34.0) 3.0
-------- --------
Cash flows from financing activities:
Proceeds from borrowings 10.0 --
Payments of borrowings (10.0) --
Proceeds from exercise of stock options 0.3 10.6
Proceeds from employee stock purchase plans 1.7 0.8
Other (0.5) 0.1
-------- --------
Net cash provided by financing activities 1.5 11.5
Change in cash and cash equivalents 22.7 75.6
Cash and cash equivalents at beginning of period 30.4 18.6
-------- --------
Cash and cash equivalents at end of period $53.1 $94.2
======== ========
Supplemental disclosure of cash flow information:
Interest payments $25.1 $0.5
======== ========
Capitalized interest $0.1 $0.4
======== ========
Income taxes paid, net $12.7 $0.6
======== ========
LIFEPOINT HOSPITALS, INC.
UNAUDITED STATISTICS
Three Months Ended
March 31,
----------------------------
%
2006 2005 Change
-------- -------- --------
Continuing Operations: (1)
Number of hospitals at end of period 49 28 75.0%
Admissions 47,842 25,444 88.0
Equivalent admissions (2) 91,235 48,852 86.8
Licensed beds at end of period 5,220 2,625 98.9
Weighted average licensed beds 5,255 2,625 100.2
Revenues ($ in millions) $589.6 $272.0 116.8
Revenues per equivalent admission $6,463 $5,560 16.2
Outpatient factor (2) 1.91 1.92 (0.5)
Emergency room visits 204,913 110,114 86.1
Inpatient surgeries 13,534 6,596 105.2
Outpatient surgeries 34,018 19,197 77.2
Average daily census 2,295 1,157 98.4
Average length of stay 4.3 4.1 4.9
Medicare case mix index 1.24 1.19 4.2
Same-Hospital: (3)
Number of hospitals at end of period 28 28 --
Admissions 24,355 25,444 (4.3)
Equivalent admissions (2) 47,224 48,852 (3.3)
Licensed beds at end of period 2,619 2,625 (0.2)
Weighted average licensed beds 2,619 2,625 (0.2)
Revenues ($ in millions) $282.2 $271.6 3.9
Revenues per equivalent admission $5,975 $5,560 7.5
Outpatient factor (2) 1.94 1.92 1.0
Emergency room visits 106,968 110,114 (2.9)
Inpatient surgeries 6,681 6,596 1.3
Outpatient surgeries 18,310 19,197 (4.6)
Average daily census 1,149 1,157 (0.7)
Average length of stay 4.2 4.1 2.4
Medicare case mix index 1.22 1.19 2.5
(1) Continuing operations excludes the operations of hospitals that
the Company classifies as discontinued operations.
(2) 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 divided 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.
(3) Same-hospital information includes 28 hospitals operated
throughout both periods and excludes the operations of hospitals
that the Company acquired or sold after January 1, 2005.
LIFEPOINT HOSPITALS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
Dollars in millions
Adjusted EBITDA is defined as earnings before depreciation and
amortization, interest expense, minority interests in earnings of
consolidated entities, income taxes, discontinued operations and
cumulative effect of change in accounting principle, net of income
taxes. Our management and Board of Directors use adjusted EBITDA to
evaluate our operating performance and as a measure of performance for
incentive compensation purposes. Our credit facilities use 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 U.S. generally
accepted accounting principles, 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 U.S.
generally accepted accounting principles and is susceptible to varying
calculations, adjusted EBITDA as presented may not be comparable to
other similarly titled measures of other companies.
During the first quarter of 2006, the Company reclassified its ESOP
expense into salaries and benefits expense due to its ESOP expense now
partially consisting of cash payments. ESOP expense for all prior
periods has been reclassified to conform to the 2006 presentation.
Three Months Ended
March 31,
----------------------------------
2006 2005
---------------- ----------------
Amount Ratio Amount Ratio
------- ------- ------- -------
Revenues $589.6 100.0% $272.0 100.0%
Salaries and benefits 231.1 39.2 109.6 40.4
Supplies 82.7 14.0 35.9 13.2
Other operating expenses 95.7 16.2 44.8 16.4
Provision for doubtful accounts 68.4 11.6 22.9 8.4
------- ------- ------- -------
477.9 81.0 213.2 78.4
------- ------- ------- -------
Adjusted EBITDA $111.7 19.0% $58.8 21.6%
======= ======= ======= =======
The following table reconciles adjusted EBITDA as presented above to
net income as reflected in the unaudited condensed consolidated
statements of operations:
Three Months Ended
March 31,
------------------
2006 2005
-------- --------
Adjusted EBITDA $111.7 $58.8
Less:
Depreciation and amortization 31.9 13.2
Interest expense, net 23.2 2.4
Minority interests in earnings
of consolidated entities 0.3 0.3
Provision for income taxes 22.5 17.1
Income from discontinued operations (3.6) --
Cumulative effect of change in
accounting principle, net of income taxes (0.7) --
-------- --------
Net income $38.1 $25.8
======== ========
CONTACT: LifePoint Hospitals, Inc., Brentwood
Michael J. Culotta, 615-372-8512