Province Healthcare (NYSE:PRV)
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Province Healthcare Reports Second Quarter Results
BRENTWOOD, Tenn., July 27 /PRNewswire-FirstCall/ -- Province Healthcare
Company (NYSE:PRV) today announced results for the second quarter ended June
30, 2004. Diluted earnings per share (EPS) for the second quarter were $0.34
compared to $0.20 in the prior year's quarter.
As previously announced, the Company sold Glades General Hospital in Belle
Glade, Florida, on April 30, 2004, and sold Brim Healthcare, Inc. on June 30,
2004. The operating results for both entities are reported as "discontinued
operations", and the consolidated financial statements and statistics for all
prior periods have been adjusted to reflect this presentation.
Diluted earnings per share from continuing operations for the quarter increased
15.0% to $0.23 compared to $0.20 in the prior year's quarter. Revenues from
continuing operations for the second quarter of 2004 increased 13.4% to $208.5
million, compared with $183.9 million in the same quarter of last year. For
the quarter, income from continuing operations was $11.8 million, compared with
$9.9 million in the prior year's quarter. Cash flow from operations for the
second quarter increased 38.1% to $23.8 million, compared with $17.2 million in
the same quarter of last year.
Revenues from continuing operations for the six months ended June 30, 2004
increased 11.7% to $409.1 million, compared with $366.4 million in the same
period of 2003. Income from continuing operations for first half of the year
was $24.0 million, compared with last year's income from continuing operations
of $19.8 million. Diluted earnings per share from continuing operations for
the first half of the year increased 14.6% to $0.47 per diluted share, compared
with $0.41 per diluted share in the prior year period.
Province ended the second quarter of 2004 with 20 owned or leased hospitals, of
which 19 are same-store hospitals. Memorial Medical Center in Las Cruces, New
Mexico, acquired through a long-term lease effective June 1, 2004, is excluded
from same-store results. On a same-store basis, net patient revenue for the
quarter increased 6.4%, net patient revenue per adjusted admission increased
6.8% and surgeries increased 2.9%. Province continues to see the results of
the successful recruitment of primarily specialist physicians in 2003 and 2004;
strong outpatient growth and increasing acuity. Specialists typically generate
20% fewer admissions, but 50% greater net revenue per admission. Same-store
adjusted admissions were flat quarter over quarter, as a result of an increase
in same-store outpatient revenue and a decline in same-store admissions.
Additionally, same-store acuity, as measured by the Medicare case mix index,
increased to 1.22 in the second quarter of 2004 from 1.19 in the second quarter
of 2003. Same-store accounts receivable days outstanding stood at 54 days at
June 30, 2004.
Martin S. Rash, Chairman and Chief Executive Officer of Province Healthcare,
said, "The initial operations of Memorial Medical Center in Las Cruces, New
Mexico are exceeding our expectations, and we expect this hospital to be
slightly accretive for the remainder of the year. We continue to be pleased
with our successful physician recruitment efforts, with 71 physicians recruited
to date, of which two-thirds are specialists. We are very confident in our
operations for the remainder of year."
A listen-only simulcast of Province Healthcare's second quarter conference call
will be available on-line at http://www.prhc.net/ on July 28, 2004, beginning
at 11:00 a.m. Eastern Daylight Time.
The Company owns or leases 20 general acute care hospitals in 12 states with a
total of 2,492 licensed beds.
Certain information contained in this release constitutes forward-looking
statements. These statements are based only on our current estimates of future
events. Forward-looking statements involve known and unknown risks and
uncertainties which may cause our actual results in future periods to differ
materially from forecasted results. Those risks include, among others, risks
associated with general economic and business conditions, the effect of future
governmental regulations, changes in reimbursement levels by government
programs, including Medicare and Medicaid or other third party payors, the
Company's continued ability to recruit and retain physicians and the Company's
ability to successfully complete and integrate acquisitions. Those and other
risks and uncertainties are described in our most recent reports and filings
with the Securities and Exchange Commission. You should not rely on the
forward-looking statements contained in this release, as we cannot predict or
control many of the factors that may cause future events or results to differ
from those forecasted. We undertake no obligation to update any forward-
looking statements on the basis of any information, future events or otherwise.
- TABLES TO FOLLOW -
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
June 30, December 31,
2004 2003(*)
ASSETS
Current assets:
Cash and cash equivalents $1,987 $46,117
Accounts receivable, less allowance
for doubtful accounts of $81,591 in 2004
and $66,835 in 2003 125,754 110,335
Inventories 21,108 18,424
Prepaid expenses and other 20,580 14,844
Assets of discontinued operations 3,011 15,362
172,440 205,082
Property and equipment, net 551,535 459,843
Goodwill 390,305 309,191
Other assets 33,636 36,874
$1,147,916 $1,010,990
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $28,925 $16,083
Accrued salaries and benefits 29,901 27,852
Accrued expenses 23,221 13,586
Current portion of long-term debt 305 743
Liabilities of discontinued operations 550 5,386
82,902 63,650
Long-term debt, less current portion 521,213 447,956
Other liabilities 56,848 50,601
Minority interests 2,089 1,910
Stockholders' equity:
Preferred stock - $0.01 par value,
100,000 shares authorized, none issued
and outstanding - - - -
Common stock - $0.01 par value; 150,000,000
shares authorized at June 30, 2004 and
December 31, 2003, issued and outstanding
49,804,885 shares and 48,841,157 shares
at June 30, 2004 and December 31, 2003,
respectively 498 488
Additional paid-in-capital 314,058 306,091
Retained earnings 170,945 141,186
Accumulated other comprehensive loss (637) (892)
Total stockholders' equity 484,864 446,873
$1,147,916 $1,010,990
(*) Derived from the audited consolidated financial statements of
Province and its subsidiaries, contained in the Company's Annual Report on
Form 10-K, filed with the Securities and Exchange Commission on March 9,
2004. The December 31, 2003 balance sheet presented above reflects the
restatement of Brim Healthcare, Inc. as a discontinued operation.
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
Three Months Ended June 30,
2004 2003
% of % of
Amount Revenues Amount Revenues
Revenues:
Net patient revenue $205,886 $181,758
Other 2,648 2,177
208,534 100.0% 183,935 100.0%
Expenses:
Salaries, wages and
benefits 75,221 36.1 70,732 38.5
Purchased services 20,504 9.8 17,578 9.6
Supplies 25,847 12.4 23,040 12.5
Provision for doubtful
accounts 21,711 10.4 16,263 8.8
Other operating
expenses 24,269 11.6 21,341 11.6
Rentals and leases 2,961 1.4 2,234 1.2
Depreciation and
amortization 11,466 5.5 9,079 4.9
Interest expense 7,416 3.6 6,635 3.6
Minority interests 169 0.1 82 - -
Loss on sale of assets 18 - - - - - -
Loss on early
extinguishment of
debt - - - - 477 0.3
Total expenses 189,582 90.9 167,461 91.0
Income before provision
for income taxes 18,952 9.1 16,474 9.0
Income taxes 7,122 3.4 6,555 3.6
Income from continuing
operations 11,830 5.7% 9,919 5.4%
Discontinued operations,
net of tax:
Loss from operations (464) (258)
Net gain on
divestitures 6,833 - -
Net income $18,199 $9,661
Diluted earnings (loss)
per common share:
Continuing
operations (a) $0.23 $0.20
Discontinued
operations:
Loss from
operations (0.01) - -
Net gain on
divestitures 0.12 - -
Net income $0.34 $0.20
(a) See calculation of diluted earnings per common share from continuing
operations in the Selected Operating Statistics section (attached).
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
Six Months Ended June 30,
2004 2003
% of % of
Amount Revenues Amount Revenues
Revenues:
Net patient revenue $404,127 $361,438
Other 4,983 4,940
409,110 100.0% 366,378 100.0%
Expenses:
Salaries, wages and
benefits 149,576 36.6 141,781 38.7
Purchased services 38,942 9.5 34,141 9.3
Supplies 51,886 12.7 47,035 12.9
Provision for
doubtful accounts 41,944 10.2 32,303 8.8
Other operating
expenses 46,935 11.5 42,804 11.7
Rentals and leases 5,256 1.3 4,478 1.2
Depreciation and
amortization 21,642 5.3 17,915 4.9
Interest expense 14,336 3.5 12,357 3.4
Minority interests 236 - - 149 - -
Loss on sale of assets 18 - - - - - -
Loss on early
extinguishment of
debt - - - - 477 0.1
Total expenses 370,771 90.6 333,440 91.0
Income before provision
for income taxes 38,339 9.4 32,938 9.0
Income taxes 14,302 3.5 13,127 3.6
Income from continuing
operations 24,037 5.9% 19,811 5.4%
Discontinued operations,
net of tax:
Loss from operations (940) (299)
Net gain on
divestitures 6,663 - -
Net income $29,760 $19,512
Diluted earnings (loss)
per common share:
Continuing
operations (b) $0.47 $0.41
Discontinued
operations:
Loss from
operations (0.02) (0.01)
Net gain on
divestitures 0.11 - -
Net income $0.56 $0.40
(b) See calculation of diluted earnings per common share from continuing
operations in the Selected Operating Statistics section (attached).
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Three Months Ended June 30,
2004 2003
Cash flows from operating activities:
Income from continuing operations $11,830 $9,919
Adjustments to reconcile income from
continuing operations to net cash provided
by operating activities:
Depreciation and amortization 11,466 9,079
Deferred income taxes 8,158 2,325
Provision for professional liability 1,641 1,404
Loss on early extinguishment of debt - - 477
Loss on sale of assets 18 - -
Changes in operating assets and liabilities,
net of effects from acquisitions and
disposals:
Accounts receivable 1,658 842
Inventories (388) 284
Prepaid expenses and other (8,208) 3,100
Accounts payable and accrued expenses (3,192) (16,338)
Accrued salaries and benefits 1,126 1,139
Other (313) 4,998
Net cash provided by operating activities 23,796 17,229
Cash flows from investing activities:
Purchase of property and equipment (19,245) (15,250)
Escrow deposit on potential investment - - (3,798)
Purchase of hospitals and healthcare
entities (152,779) (3,153)
Net cash used in investing activities (172,024) (22,201)
Cash flows from financing activities:
Proceeds from long-term debt 110,000 194,212
Repayments of debt (34,870) (186,887)
Issuance of common stock 3,362 72
Net cash provided by financing activities 78,492 7,397
Net cash provided by (used in) continuing
operations (69,736) 2,425
Net cash provided by discontinued operations 15,115 724
Increase (decrease) in cash and cash
equivalents (54,621) 3,149
Cash and cash equivalents at beginning of
period 56,608 15,990
Cash and cash equivalents at end of period $1,987 $19,139
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Six Months Ended June 30,
2004 2003
Cash flows from operating activities:
Income from continuing operations $24,037 $19,811
Adjustments to reconcile income from
continuing operations to net cash provided
by operating activities:
Depreciation and amortization 21,642 17,915
Deferred income taxes 10,532 3,155
Provision for professional liability 3,244 3,383
Loss on early extinguishment of debt - - 477
Loss on sale of assets 18 - -
Changes in operating assets and liabilities,
net of effects from acquisitions and
disposals:
Accounts receivable (3,298) (375)
Inventories (199) 429
Prepaid expenses and other (10,591) (1,920)
Accounts payable and accrued expenses 5,146 5,091
Accrued salaries and benefits (3,273) 1,942
Other 1,551 4,026
Net cash provided by operating activities 48,809 53,934
Cash flows from investing activities:
Purchase of property and equipment (37,712) (30,404)
Escrow deposit on potential investment - - (3,798)
Purchase of hospitals and healthcare
entities (152,783) (3,153)
Net cash used in investing activities (190,495) (37,355)
Cash flows from financing activities:
Proceeds from long-term debt 110,000 194,212
Repayments of debt (35,125) (207,274)
Issuance of common stock 7,264 1,235
Net cash provided by (used in) financing
activities 82,139 (11,827)
Net cash provided by (used in) continuing
operations (59,547) 4,752
Net cash provided by (used in) discontinued
operations 15,417 (238)
Increase (decrease) in cash and cash
equivalents (44,130) 4,514
Cash and cash equivalents at beginning of
period 46,117 14,625
Cash and cash equivalents at end of period $1,987 $19,139
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
SELECTED OPERATING STATISTICS (Unaudited)
Actual Same Store(1)
Three Months Ended Three Months Ended
June 30, June 30,
2004 2003 2004 2003
Consolidated Hospitals:
Number of hospitals at
end of period 20 19 5.3% 19 19 - -%
Licensed beds at end
of period 2,492 2,208 12.9 2,206 2,208 - -
Beds in service at
end of period 2,119 1,933 9.6 1,920 1,933 (0.7)
Inpatient
admissions 17,724 17,579 1.0 16,883 17,579 (4.0)
Adjusted
admissions (2) 33,564 32,143 4.4 32,026 32,143 (0.4)
Patient days 76,208 74,713 2.0 72,580 74,713 (2.8)
Adjusted patient
days (3) 144,323 136,619 5.6 137,678 136,619 0.8
Average length
of stay (days) 4.3 4.3 - - 4.3 4.3 - -
Net patient
revenue $205,886 $181,758 13.3 $193,417 $181,758 6.4
Net patient
revenue:
Per inpatient
admission $11,616 $10,340 12.3 $11,456 $10,340 10.8
Per adjusted
admission $6,134 $5,655 8.5 $6,039 $5,655 6.8
Gross revenue:
Inpatient $239,461 $219,842 8.9 $225,931 $219,842 2.8
Outpatient 214,010 182,075 17.5 202,566 182,075 11.3
$453,471 $401,917 12.8 $428,497 $401,917 6.6
Net Patient
Revenue by Payor:
Medicare 38.8% 38.5% 38.5% 38.5%
Medicaid 8.7 10.7 9.7 10.7
Other 52.5 50.8 51.8 50.8
Total 100.0% 100.0% 100.0% 100.0%
Three Months Ended June 30,
2004 2003
Diluted Earnings Per Share Calculation:
Income from continuing operations $11,830 $9,919
Add convertible notes interest, net of tax (4) 1,899 --
Adjusted net income $13,729 $9,919
Basic shares plus stock options 50,600 49,032
Convertible shares (4) 9,100 --
Diluted shares outstanding 59,700 49,032
Diluted earnings per share $0.23 $0.20
(1) Represents hospitals owned or leased during both periods.
(2) Used by management and investors as a general measure of combined
inpatient and outpatient volume. Adjusted admissions are computed by
multiplying admissions (inpatient volume) by the outpatient factor.
The outpatient factor is the sum of gross inpatient revenue and gross
outpatient revenue divided by gross inpatient revenue. The adjusted
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) Adjusted patient days are computed by multiplying patient days
(inpatient volume) by the outpatient factor. The outpatient factor
is the sum of gross inpatient revenue and gross outpatient revenue
divided by gross inpatient revenue. The adjusted patient days
computation equates outpatient revenue to the volume measure (patient
days) used to measure inpatient volume, resulting in a general
measure of combined inpatient and outpatient volume.
(4) The Company's two outstanding series of convertible notes are anti-
dilutive for the three and six month periods ended June 30, 2003 and
thus, are not included in the diluted earnings per share calculation
for such period.
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
SELECTED OPERATING STATISTICS (Unaudited)
Actual Same Store(1)
Six Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Consolidated Hospitals:
Number of hospitals at
end of period 20 19 5.3% 19 19 - -%
Licensed beds at end
of period 2,492 2,208 12.9 2,206 2,208 - -
Beds in service at
end of period 2,119 1,933 9.6 1,920 1,933 (0.7)
Inpatient
admissions 36,717 36,303 1.1 35,876 36,303 (1.2)
Adjusted
admissions (2) 67,548 65,252 3.5 66,010 65,252 1.2
Patient days 157,455 155,296 1.4 153,827 155,296 (1.0)
Adjusted patient
days (3) 289,643 279,137 3.8 282,998 279,137 1.4
Average length
of stay (days) 4.3 4.3 - - 4.3 4.3 - -
Net patient
revenue $404,127 $361,438 11.8 $391,658 $361,438 8.4
Net patient
revenue:
Per inpatient
admission $11,007 $9,956 10.6 $10,917 $9,956 9.7
Per adjusted
admission $5,983 $5,539 8.0 $5,933 $5,539 7.1
Gross revenue:
Inpatient $493,404 $447,607 10.2 $479,874 $447,606 7.2
Outpatient 414,286 357,079 16.0 402,842 357,079 12.8
$907,690 $804,686 12.8 $882,716 $804,685 9.7
Net Patient
Revenue by Payor:
Medicare 39.6% 39.0% 39.5% 39.0%
Medicaid 9.0 10.7 9.5 10.7
Other 51.4 50.3 51.0 50.3
Total 100.0% 100.0% 100.0% 100.0%
Six Months Ended June 30,
2004 2003
Diluted Earnings Per Share Calculation:
Income from continuing operations $24,037 $19,811
Add convertible notes interest, net of tax (4) 3,797 --
Adjusted net income $27,834 $19,811
Basic shares plus stock options 50,469 48,895
Convertible shares (4) 9,100 --
Diluted shares outstanding 59,569 48,895
Diluted earnings per share $0.47 $0.41
See accompanying footnotes on previous page.
DATASOURCE: Province Healthcare Company
CONTACT: Pamela L. Hunter, Vice President, Investor Relations of
Province Healthcare Company, +1-615-370-1377
Web site: http://www.prhc.net/