Province Healthcare (NYSE:PRV)
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Province Healthcare Reports Third Quarter Results:
BRENTWOOD, Tenn., Oct. 27 /PRNewswire-FirstCall/ -- Province Healthcare
Company (NYSE:PRV) today announced results for the third quarter ended
September 30, 2004. Diluted earnings per share (EPS) from continuing
operations for the third quarter increased to $0.23, compared to $0.21 in the
prior year's quarter.
As previously announced, the Company has signed a definitive agreement to be
acquired by LifePoint Hospitals, Inc. Completion of the transaction remains
subject to the approval of each company's stockholders, receipt of necessary
financing and certain other conditions. The transaction is expected to close in
the first quarter of 2005.
Revenues from continuing operations for the third quarter of 2004 increased
27.3% to $235.3 million, compared with $184.8 million in the same quarter of
last year. For the quarter, income from continuing operations was $11.9
million, compared with $10.2 million in the prior year's quarter. Cash flow
from operations for the third quarter increased 25.5% to $44.3 million,
compared with $35.3 million in the same quarter of last year.
During the quarter, two of the Company's hospitals experienced disruption
related to Hurricane Ivan. Vaughan Regional Medical Center in Selma, Alabama,
and Teche Regional Medical Center in Morgan City, Louisiana, experienced a
reduction in volumes as the communities braced for the impact of the storm,
resulting in a decrease in adjusted admissions of 97. Additionally, Coastal
Carolina Medical Center in Hardeeville, South Carolina, is now expected to open
on or about December 1, 2004. As a result, the Company incurred higher than
anticipated start-up expenses during the quarter. The effect on income from
continuing operations due to the impact of Hurricane Ivan and the additional
start-up expenses for Coastal Carolina Medical Center was $0.7 million, or
$0.01 per diluted share.
Revenues from continuing operations for the nine months ended September 30,
2004 increased 16.9% to $644.4 million, compared with $551.2 million in the
same period of 2003. Income from continuing operations for the nine-month
period was $35.9 million, compared with last year's income from continuing
operations of $30.0 million. Diluted earnings per share from continuing
operations for the nine-month period increased 14.8% to $0.70 per diluted
share, compared with $0.61 per diluted share in the prior year period.
Province ended the third 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 5.5%, and net patient revenue per adjusted admission
increased 4.8%. Same-store adjusted admissions increased 0.7% quarter over
quarter, as a result of an increase in same-store outpatient revenue of 11.8%
and a decline in same-store admissions. The specialist physicians drove the
strong same-store surgery growth of 4.1% for the quarter. Same-store acuity, as
measured by the Medicare case mix index, increased to 1.22 in the third quarter
of 2004 from 1.20 in the third quarter of 2003. Same-store accounts receivable
days outstanding remained stable at 55 days at September 30, 2004.
Martin S. Rash, Chairman and Chief Executive Officer of Province Healthcare,
said, "Our third quarter results were very positive. Cash flow from operations
for the quarter was an outstanding $44.3 million, an increase of 25.5% over the
prior year period. We continue to see strong outpatient revenue growth and
surgery growth due to the successful recruitment of specialist physicians to
our markets. Our bad debt expense as a percentage of net revenue for the
quarter was above our previous guidance of the 10% range, due primarily to
reductions of coverage in state Medicaid programs, particularly Texas, and our
recent acquisition, Memorial Medical Center, whose bad debt expense level, as
expected, is higher than our company average. Lastly, we have exceeded our
physician recruitment goal of approximately 90 physicians for the year. To
date, 104 new physicians will start to practice in our communities this year,
and over two-thirds of these physicians are specialists."
Daniel S. Slipkovich, President and Chief Operating Officer of Province
Healthcare, said, "We are exceptionally pleased with the operational
performance of Memorial Medical Center in Las Cruces, New Mexico. We are ahead
of our initial expectations for both volume and expense management. Our
hospital management team has made great strides in working with the medical
staff and new hospital board members to ensure that we are meeting the
healthcare needs of Las Cruces and the surrounding communities."
A listen-only simulcast of Province Healthcare's third quarter conference call
will be available on-line at http://www.prhc.net/ on October 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.
Important Legal Information
In connection with their proposed transaction, LifePoint Hospitals and Province
Healthcare have filed with the Securities and Exchange Commission (the "SEC") a
joint proxy statement/prospectus, as part of a Registration Statement on Form
S-4, and other relevant materials. The definitive joint proxy
statement/prospectus will be mailed to the stockholders of LifePoint Hospitals
and Province Healthcare. Investors and security holders are advised to read
the joint proxy statement/prospectus and other relevant materials when they
become available, as well as any amendments or supplements to those documents,
because they will contain important information about LifePoint Hospitals,
Province Healthcare and the proposed transaction. In addition, the joint proxy
statement/prospectus and other relevant materials filed by LifePoint Hospitals
or Province Healthcare with the SEC may be obtained free of charge at the SEC's
web site at http://www.sec.gov/. In addition, investors and security holders
may obtain free copies of the documents filed with the SEC by LifePoint
Hospitals by contacting Investor Relations, LifePoint Hospitals, Inc., 103
Powell Court, Suite 200, Brentwood, Tennessee, 37027, Phone: (615) 372-8500 and
by Province Healthcare by contacting Investor Relations, Province Healthcare
Company, 105 Westwood Place, Suite 400, Brentwood, Tennessee, 37027, Phone:
(615) 370-1377.
LifePoint Hospitals and Province Healthcare, and their respective directors and
executive officers, may be deemed to be participants in the solicitation of
proxies from their respective stockholders with respect to the transactions
contemplated by the merger agreement. Information about the directors and
executive officers of LifePoint Hospitals, and their interests in the
transactions contemplated by the merger agreement, including their ownership of
LifePoint Hospitals common stock, is set forth in the proxy statement for
LifePoint Hospitals' 2004 annual meeting, which was filed with the SEC on April
28, 2004. Information about the directors and executive officers of Province
Healthcare, and their interests in the transactions contemplated by the merger
agreement, including their ownership of Province Healthcare common stock, is
set forth in the proxy statement for Province Healthcare's 2004 annual meeting,
which was filed with the SEC on April 20, 2004. Investors and security holders
may obtain additional information regarding the interests of such potential
participants by reading the joint proxy statement/prospectus and the other
relevant documents filed with the SEC.
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.
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
September 30, December 31,
2004 2003(*)
ASSETS
Current assets:
Cash and cash equivalents $11,607 $46,117
Accounts receivable, less allowance
for doubtful accounts
of $81,175 in 2004 and $66,835 in 2003 138,751 110,335
Inventories 20,901 18,424
Prepaid expenses and other 15,502 14,614
Assets of discontinued operations 2,880 14,995
189,641 204,485
Property and equipment, net 562,782 459,843
Goodwill 388,957 309,191
Other assets 32,613 36,874
$1,173,993 $1,010,393
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $33,956 $16,083
Accrued salaries and benefits 31,660 27,852
Accrued expenses 34,832 14,241
Current portion of long-term debt 251 743
Liabilities of discontinued operations 355 5,156
101,054 64,075
Long-term debt, less current portion 514,477 447,956
Other liabilities 58,671 49,579
Minority interests 2,171 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
September 30, 2004 and December 31, 2003,
issued and outstanding 49,764,999 shares
and 48,841,157 shares at September 30,
2004 and December 31, 2003, respectively 498 488
Additional paid-in-capital 315,158 306,091
Retained earnings 182,474 141,186
Accumulated other comprehensive loss (510) (892)
Total stockholders' equity 497,620 446,873
$1,173,993 $1,010,393
(*) Derived from the audited consolidated financial statements of Province
and its subsidiaries, contained in the Company's Current Report on
Form 8-K, filed with the Securities and Exchange Commission on
September 14, 2004.
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
Three Months Ended September 30,
2004 2003
% of % of
Amount Revenues Amount Revenues
Revenues:
Net patient revenue $232,572 $182,229
Other 2,743 2,560
235,315 100.0% 184,789 100.0%
Expenses:
Salaries, wages and
benefits 86,615 36.8 67,262 36.4
Purchased services 23,011 9.8 16,735 9.1
Supplies 30,530 13.0 24,035 13.0
Provision for
doubtful accounts 26,537 11.3 18,773 10.2
Other operating
expenses 26,174 11.1 22,417 12.1
Rentals and leases 3,072 1.3 2,198 1.2
Depreciation and
amortization 12,561 5.3 9,317 5.0
Interest expense 7,618 3.2 6,989 3.8
Minority interests 201 0.1 52 --
(Gain) loss on sale
of assets (32) -- 75 --
Loss on early
extinguishment of
debt -- -- 10 --
Total expenses 216,287 91.9 167,863 90.8
Income before provision
for income taxes 19,028 8.1 16,926 9.2
Income taxes 7,137 3.0 6,725 3.7
Income from continuing
operations 11,891 5.1% 10,201 5.5%
Discontinued operations,
net of tax:
Loss from operations (362) (394)
Net gain on
divestitures -- --
Net income $11,529 $9,807
Diluted earnings (loss)
per common share:
Continuing
operations (a) $0.23 $0.21
Discontinued operations:
Loss from
operations (0.01) (0.01)
Net gain on
divestitures -- --
Net income $0.22 $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)
Nine Months Ended September 30,
2004 2003
% of % of
Amount Revenues Amount Revenues
Revenues:
Net patient revenue $636,699 $543,667
Other 7,727 7,500
644,426 100.0% 551,167 100.0%
Expenses:
Salaries, wages and
benefits 236,192 36.7 209,043 37.9
Purchased services 61,953 9.6 50,876 9.2
Supplies 82,416 12.8 71,071 12.9
Provision for
doubtful accounts 68,481 10.6 51,077 9.3
Other operating
expenses 73,109 11.3 65,221 11.8
Rentals and leases 8,328 1.3 6,675 1.2
Depreciation and
amortization 34,203 5.3 27,231 5.0
Interest expense 21,954 3.4 19,346 3.5
Minority interests 437 0.1 201 --
(Gain) loss on sale
of assets (14) -- 75 --
Loss on early
extinguishment of debt -- -- 487 0.1
Total expenses 587,059 91.1 501,303 90.9
Income before provision
for income taxes 57,367 8.9 49,864 9.1
Income taxes 21,439 3.3 19,852 3.6
Income from continuing
operations 35,928 5.6% 30,012 5.5%
Discontinued operations,
net of tax:
Loss from operations (1,302) (693)
Net gain on
divestitures 6,663 --
Net income $41,289 $29,319
Diluted earnings (loss)
per common share:
Continuing
operations (b) $0.70 $0.61
Discontinued
operations:
Loss from operations (0.02) (0.01)
Net gain on
divestitures 0.11 --
Net income $0.79 $0.60
(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 September 30,
2004 2003
Cash flows from operating activities:
Income from continuing operations $11,891 $10,201
Adjustments to reconcile income from
continuing operations to net cash
provided by operating activities:
Depreciation and amortization 12,561 9,317
Deferred income taxes 3,607 314
Provision for professional liability 2,085 1,423
Loss on early extinguishment of debt -- 10
(Gain) loss on sale of assets (32) 75
Changes in operating assets and
liabilities, net of effects
from acquisitions and disposals:
Accounts receivable (9,609) 3,653
Inventories 207 248
Prepaid expenses and other 5,195 3,394
Accounts payable and accrued expenses 15,536 5,823
Accrued salaries and benefits 1,759 (570)
Other 1,088 1,400
Net cash provided by operating activities 44,288 35,288
Cash flows from investing activities:
Purchase of property and equipment (23,601) (13,494)
Escrow deposit on potential investment -- 3,798
Purchase of hospitals and healthcare entities (534) (94)
Net cash used in investing activities (24,135) (9,790)
Cash flows from financing activities:
Proceeds from long-term debt 372 --
Repayments of debt (10,882) (5,390)
Issuance of common stock 1,043 121
Net cash used in financing activities (9,467) (5,269)
Net cash provided by continuing operations 10,686 20,229
Net cash used in discontinued operations (1,066) (312)
Increase in cash and cash equivalents 9,620 19,917
Cash and cash equivalents at beginning of period 1,987 19,139
Cash and cash equivalents at end of period $11,607 $39,056
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Nine Months Ended September 30,
2004 2003
Cash flows from operating activities:
Income from continuing operations $35,928 $30,012
Adjustments to reconcile income from
continuing operations to net cash
provided by operating activities:
Depreciation and amortization 34,203 27,231
Deferred income taxes 14,139 3,469
Provision for professional liability 5,329 4,806
Loss on early extinguishment of debt -- 487
(Gain) loss on sale of assets (14) 75
Changes in operating assets and
liabilities, net of effects
from acquisitions and disposals:
Accounts receivable (12,907) 3,279
Inventories 8 677
Prepaid expenses and other (5,395) 813
Accounts payable and accrued expenses 20,682 10,914
Accrued salaries and benefits (1,514) 1,372
Other 2,638 5,549
Net cash provided by operating activities 93,097 88,684
Cash flows from investing activities:
Purchase of property and equipment (61,313) (43,899)
Purchase of hospitals and healthcare
entities (153,317) (3,247)
Net cash used in investing activities (214,630) (47,146)
Cash flows from financing activities:
Proceeds from long-term debt 110,372 194,212
Repayments of debt (46,007) (212,664)
Issuance of common stock 8,307 1,356
Net cash provided by (used in)
financing activities 72,672 (17,096)
Net cash (used in) provided by
continuing operations (48,861) 24,442
Net cash provided by (used in)
discontinued operations 14,351 (11)
(Decrease) increase in cash and cash
equivalents (34,510) 24,431
Cash and cash equivalents at
beginning of period 46,117 14,625
Cash and cash equivalents at
end of period $11,607 $39,056
PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES
SELECTED OPERATING STATISTICS (Unaudited)
Actual Same Store(1)
Three Months Ended Three Months Ended
September 30, September 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 2,116 1,933 9.5 1,920 1,933 (0.7)
Inpatient
admissions 19,752 17,729 11.4 17,189 17,729 (3.0)
Adjusted
admissions (2) 37,527 32,879 14.1 33,093 32,879 0.7
Patient days 83,167 72,935 14.0 71,640 72,935 (1.8)
Adjusted patient
days (3) 158,019 135,269 16.8 137,930 135,269 2.0
Average length
of stay (days) 4.2 4.1 2.4 4.2 4.1 2.4
Net patient
revenue $232,572 $182,229 27.6 $192,273 $182,208 5.5
Net patient
revenue:
Per inpatient
admission $11,775 $10,279 14.6 $11,186 $10,277 8.8
Per adjusted
admission $6,197 $5,542 11.8 $5,810 $5,542 4.8
Gross revenue:
Inpatient $265,760 $215,315 23.4 $222,337 $215,315 3.3
Outpatient 239,142 183,940 30.0 205,651 183,940 11.8
$504,902 $399,255 26.5 $427,988 $399,255 7.2
Net Patient
Revenue by
Payor:
Medicare 35.8% 38.1% 38.0% 38.1%
Medicaid 9.8 11.0 9.5 11.0
Other 54.4 50.9 52.5 50.9
Total 100.0% 100.0% 100.0% 100.0%
Three Months Ended
September 30,
2004 2003
Diluted Earnings Per Share Calculation:
Income from continuing operations $11,891 $10,201
Add convertible notes interest, net of tax (4) 1,901 - -
Adjusted net income $13,792 $10,201
Basic shares plus stock options 51,002 49,639
Convertible shares (4) 9,100 - -
Diluted shares outstanding 60,102 49,639
Diluted earnings per share $0.23 $ 0.21
(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 nine-month periods ended September 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)
Nine Months Ended Nine Months Ended
September 30, September 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 2,116 1,933 9.5 1,920 1,933 (0.7)
Inpatient
admissions 56,469 54,032 4.5 53,065 54,032 (1.8)
Adjusted
admissions (2) 105,075 98,131 7.1 99,103 98,131 1.0
Patient days 240,622 228,231 5.4 225,467 228,231 (1.2)
Adjusted patient
days (3) 447,662 414,406 8.0 420,928 414,406 1.6
Average length
of stay (days) 4.3 4.2 2.4 4.3 4.2 2.4
Net patient
revenue $636,699 $543,667 17.1 $583,930 $543,646 7.4
Net patient
revenue:
Per inpatient
admission $11,275 $10,062 12.1 $11,004 $10,062 9.4
Per adjusted
admission $6,059 $5,540 9.4 $5,892 $5,540 6.4
Gross revenue:
Inpatient $759,165 $662,921 14.5 $702,211 $662,921 5.9
Outpatient 653,428 541,020 20.8 608,492 541,020 12.5
$1,412,593 $1,203,941 17.3 $1,310,703 $1,203,941 8.9
Net Patient Revenue
by Payor:
Medicare 37.7% 38.7% 39.0% 38.7%
Medicaid 9.7 10.8 9.5 10.8
Other 52.6 50.5 51.5 50.5
Total 100.0% 100.0% 100.0% 100.0%
Nine Months Ended
September 30,
2004 2003
Diluted Earnings Per Share Calculation:
Income from continuing operations $35,928 $30,012
Add convertible notes interest, net of tax (4) 5,698 - -
Adjusted net income $41,626 $30,012
Basic shares plus stock options 50,647 49,143
Convertible shares (4) 9,100 - -
Diluted shares outstanding 59,747 49,143
Diluted earnings per share $0.70 $0.61
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.provincehealthcare.com/