PRV Province Healthcare Company

Province Healthcare Reports Third Quarter Results BRENTWOOD, Tenn., Oct. 27 /PRNewswire-FirstCall/ -- Province Healthcare Company today announced results consistent with its previously disclosed expectations for the third quarter ended September 30, 2003. Diluted earnings per share (EPS) for the quarter were $0.20, compared with $0.19 in the prior year's quarter. Net operating revenues for the third quarter of 2003 increased 6.2% to $195.4 million compared with $184.0 million in the same quarter of last year. Earnings before interest, income taxes, depreciation, amortization, loss on sale of assets, loss on extinguishment of debt and minority interests ("Adjusted EBITDA") were $33.3 million compared with $31.4 million in last year's third quarter. Net income for the quarter was $9.8 million, compared with last year's net income of $9.4 million. Cash flow from operations exceeded all expectations and totaled $34.9 million in the third quarter of 2003. Accounts receivable days outstanding stood at 55 days at September 30, 2003. Net operating revenues for the first nine months of 2003 increased 11.9% to $585.6 million compared with $523.6 million in the same period of 2002. Adjusted EBITDA was $97.9 million compared with $95.3 million in the previous year. Net income for the first nine months of 2003 was $29.3 million or $0.60 per diluted share, compared with last year's $0.64 per diluted share on net income of $32.1 million. Province ended the third quarter of 2003 with 20 owned or leased hospitals, all of which are now same-store hospitals. Adjusted admissions increased 2.3% quarter over quarter, and total admissions increased 0.5%. In addition, gross outpatient revenue increased 11.4% and net revenue per adjusted admissions increased 3.8%. Martin S. Rash, Chairman and Chief Executive Officer of Province Healthcare, said, "Our third quarter results clearly indicate the favorable trends at Province, with positive admissions in this tough economic environment, a 6.2% increase in revenue, and continued strong cash flow from operations. Expectations had been cash flow from operations in the third quarter of approximately $20.0 million, which we exceeded by $14.9 million. Additionally, 103 new physicians will start to practice in our communities this year, our best recruiting year in the history of our Company." A listen-only simulcast, as well as a 30-day replay, of Province Healthcare's third quarter conference call will be available on-line at http://www.prhc.net/ on October 28, 2003, beginning at 11:00 a.m. Eastern Standard Time. The Company owns or leases 20 general acute care hospitals in 13 states with a total of 2,281 licensed beds. The Company also provides management services to 37 non-urban hospitals in 14 states with a total of 3,043 licensed beds. Certain statements contained in this release, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may include projections of revenues, income or loss, capital expenditures, capital structure, or other financial items, statements regarding the plans and objectives of management for future operations, statements of future economic performance, statements of the assumptions underlying or relating to any of the foregoing statements, and other statements which are other than statements of historical fact. These statements are based on current estimates of future events, and the Company has no obligation to update or correct these estimates unless considered material to the Company. Forward-looking statements involve known and unknown risks and uncertainties which may cause the Company's 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 are described in the Company's reports and filings with the Securities and Exchange Commission. CONTACT: Merilyn H. Herbert, Province Healthcare Company (PRV) at (615) 370-1377 PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share amounts) September 30, December 31, 2003 2002(*) (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 38,804 $ 14,417 Accounts receivable, less allowance for doubtful accounts of $62,173 in 2003 and $68,158 in 2002 114,378 117,431 Inventories 19,131 19,835 Prepaid expenses and other 15,710 14,071 188,023 165,754 Property and equipment, net 463,949 447,379 Goodwill 318,014 319,390 Unallocated purchase price 3,247 466 Other assets 40,435 38,722 $ 1,013,668 $ 971,711 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 17,680 $ 20,162 Accrued salaries and benefits 25,903 25,380 Accrued expenses 25,701 13,198 Current portion of long-term debt 1,724 1,668 71,008 60,408 Long-term debt, less current portion 451,546 461,576 Other liabilities 44,577 33,913 Minority interests 2,726 2,612 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, 2003 and December 31, 2002, issued and outstanding 48,734,607 shares and 48,581,549 shares at September 30, 2003 and December 31, 2002, respectively 487 486 Additional paid-in-capital 305,457 304,102 Retained earnings 138,886 109,567 Accumulated other comprehensive loss (1,019) (953) Total stockholders' equity 443,811 413,202 $ 1,013,668 $ 971,711 (*) 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 24, 2003. PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except per share data) Three Months Ended September 30, 2003 2002 % of % of Amount Revenues Amount Revenues Revenue: Net patient service revenue $ 189,091 $ 178,111 Other 6,338 5,851 Net operating revenue 195,429 100.0% 183,962 100.0% Operating expenses: Salaries, wages and benefits 71,109 36.4 72,115 39.2 Purchased services 18,038 9.2 19,305 10.5 Supplies 24,738 12.7 23,396 12.7 Provision for doubtful accounts 20,008 10.2 14,042 7.6 Other operating expenses 25,827 13.2 21,576 11.8 Rentals and leases 2,385 1.2 2,165 1.2 162,105 82.9 152,599 83.0 Adjusted EBITDA (*) 33,324 17.1 31,363 17.0 Depreciation and amortization 9,738 5.1 9,419 5.1 Interest expense 7,097 3.6 6,218 3.4 Minority interests 52 -- 16 -- Loss on sale of assets 82 -- -- -- Loss on early extinguishment of debt 10 -- -- -- Income before provision for income taxes 16,345 8.4 15,710 8.5 Income taxes 6,538 3.4 6,284 3.4 Net income $ 9,807 5.0% $ 9,426 5.1% Net income per common share: Basic $ 0.20 $ 0.19 Diluted $ 0.20 $ 0.19 Weighted average common shares: Basic 48,729,000 48,544,000 Diluted 49,639,000 49,607,000 (*) Adjusted EBITDA for 2003 and 2002, represents income before provision for income taxes, depreciation and amortization, interest, minority interests, loss on sale of assets and loss on extinguishment of debt. Adjusted EBITDA serves as a measure of leverage capacity and debt service ability, and is commonly used as an analytical indicator within the healthcare industry. Adjusted EBITDA, however, is not a measure of financial performance under accounting principles generally accepted in the United States, and should not be considered an alternative to net income as a measure of operating performance or to cash flows from operating, investing or financing activities as a measure of 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. PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except per share data) Nine Months Ended September 30, 2003 2002 % of % of Amount Revenues Amount Revenues Revenue: Net patient service revenue $ 566,298 $ 506,125 Other 19,344 17,438 Net operating revenue 585,642 100.0% 523,563 100.0% Operating expenses: Salaries, wages and benefits 221,379 37.8 201,743 38.5 Purchased services 54,699 9.3 54,605 10.4 Supplies 73,344 12.5 63,606 12.1 Provision for doubtful accounts 54,991 9.4 41,533 7.9 Other operating expenses 76,120 13.1 60,275 11.7 Rentals and leases 7,241 1.2 6,518 1.2 487,774 83.3 428,280 81.8 Adjusted EBITDA (*) 97,868 16.7 95,283 18.2 Depreciation and amortization 28,515 4.9 25,751 4.9 Interest expense 19,716 3.5 15,959 3.1 Minority interests 201 -- 72 -- Loss on sale of assets 85 -- 53 -- Loss on early extinguishment of debt 486 -- -- -- Income before provision for income taxes 48,865 8.3 53,448 10.2 Income taxes 19,546 3.3 21,379 4.1 Net income $ 29,319 5.0% $ 32,069 6.1% Net income per common share: Basic $ 0.60 $ 0.67 Diluted $ 0.60 $ 0.64 Weighted average common shares: Basic 48,681,000 48,002,000 Diluted 49,143,000 61,424,000 See accompanying footnote on previous page. PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Three Months Ended September 30, 2003 2002 Cash flows from operating activities: Net income $ 9,807 $ 9,426 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 9,738 9,418 Deferred income taxes 314 1,727 Provision for professional liability 1,423 1,807 Loss on early extinguishment of debt 9 -- Loss of sale of assets 83 -- Changes in operating assets and liabilities, net of effects from acquisitions and disposals: Accounts receivable 3,594 (465) Inventories 240 194 Prepaid expenses and other 4,620 (1,747) Accounts payable and accrued expenses 4,023 3,668 Accrued salaries and benefits (815) (3,611) Other 1,814 2,184 Net cash provided by operating activities 34,850 22,601 Cash flows from investing activities: Purchase of property and equipment (13,552) (10,321) Escrow deposit on potential investment 3,798 -- Purchase of hospitals and healthcare entities (94) 321 Net cash used in investing activities (9,848) (10,000) Cash flows from financing activities: Proceeds from long-term debt (13) 27 Repayments of debt (5,359) (24,259) Issuance of common stock 121 790 Net cash (used in) provided by financing activities (5,251) (23,442) Increase (decrease) in cash and cash equivalents 19,751 (10,841) Cash and cash equivalents at beginning of period 19,053 23,044 Cash and cash equivalents at end of period $ 38,804 $ 12,203 PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Nine Months Ended September 30, 2003 2002 Cash flows from operating activities: Net income $ 29,319 $ 32,069 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 28,515 25,751 Deferred income taxes 3,469 1,840 Provision for professional liability 4,806 5,403 Loss on early extinguishment of debt 486 -- Loss of sale of assets 85 53 Changes in operating assets and liabilities, net of effects from acquisitions and disposals: Accounts receivable 4,068 (2,480) Inventories 637 (1,311) Prepaid expenses and other 1,968 4,322 Accounts payable and accrued expenses 10,021 8,488 Accrued salaries and benefits 523 (1,873) Other 6,173 2,973 Net cash provided by operating activities 90,070 75,235 Cash flows from investing activities: Purchase of property and equipment (44,406) (36,109) Purchase of hospitals and healthcare entities (3,247) (171,707) Net cash used in investing activities (47,653) (207,816) Cash flows from financing activities: Proceeds from long-term debt 194,199 134,355 Repayments of debt (213,585) (39,451) Issuance of common stock 1,356 10,505 Net cash (used in) provided by financing activities (18,030) 105,409 Increase (decrease) in cash and cash equivalents 24,387 (27,172) Cash and cash equivalents at beginning of period 14,417 39,375 Cash and cash equivalents at end of period $ 38,804 $ 12,203 PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES SELECTED OPERATING STATISTICS (Unaudited) (Dollars in thousands, except per share data) Actual Same Store(1) Three Months Ended Three Months Ended September 30, September 30, 2003 2002 2003 2002 Consolidated Hospitals: Number of hospitals at end of period 20 20 20 20 Licensed beds at end of period 2,281 2,315 2,281 2,315 Beds in service at end of period 1,993 1,905 1,993 1,905 Inpatient admissions 18,683 18,584 18,683 18,584 Adjusted admissions (2) 34,284 33,520 34,284 33,520 Patient days 76,084 77,738 76,084 77,738 Adjusted patient days (3) 139,634 140,250 139,634 140,250 Average length of stay (days) 4.1 4.2 4.1 4.2 Net patient service revenue $ 189,091 $ 178,111 $ 189,091 $ 178,111 Gross revenue: Inpatient $ 228,966 $ 213,510 $ 228,966 $ 213,510 Outpatient 191,130 171,600 191,130 171,600 $ 420,096 $ 385,110 $ 420,096 $ 385,110 Net Patient Revenue by Payor: Medicare 37.4% 42.2% 37.4% 42.2% Medicaid 11.4 10.9 11.4 10.9 Other 51.2 46.9 51.2 46.9 Total 100.0% 100.0% 100.0% 100.0% Three Months Ended September 30, 2003 2002 Diluted Earnings Per Share Calculation: Net income $ 9,807 $ 9,426 Add convertible notes interest, net of tax (4) -- -- Adjusted net income $ 9,807 $ 9,426 Basic shares plus stock options 49,639 49,607 Convertible shares (4) -- -- Diluted shares outstanding 49,639 49,607 Diluted earnings per share $ 0.20 $ 0.19 (1) Represents twenty 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 months ended September 30, 2003, and for the three months ended September 30, 2002, and thus, are not included in the diluted earnings per share calculation for such periods. PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES SELECTED OPERATING STATISTICS (Unaudited) (Dollars in thousands, except per share data) Actual Same Store(1) Nine Months Ended Nine Months Ended September 30, September 30, 2003 2002 2003 2002 Consolidated Hospitals: Number of hospitals at end of period 20 20 20 20 Licensed beds at end of period 2,281 2,315 2,281 2,315 Beds in service at end of period 1,993 1,905 1,993 1,905 Inpatient admissions 56,971 54,432 52,546 53,019 Adjusted admissions (2) 102,477 93,773 92,655 90,833 Patient days 238,340 234,492 219,025 228,602 Adjusted patient days (3) 428,648 403,590 386,040 391,263 Average length of stay (days) 4.2 4.3 4.2 4.3 Net patient service revenue $ 566,298 $ 506,125 $ 502,347 $ 488,904 Gross revenue: Inpatient $ 705,158 $ 633,588 $ 658,757 $ 621,281 Outpatient 563,273 457,010 502,448 442,363 $ 1,268,431 $ 1,090,598 $ 1,161,205 $ 1,063,644 Net Patient Revenue by Payor: Medicare 38.0% 46.2% 38.8% 46.9% Medicaid 11.4 12.1 12.5 12.5 Other 50.6 41.7 48.7 40.6 Total 100.0% 100.0% 100.0% 100.0% Nine Months Ended September 30, 2003 2002 Diluted Earnings Per Share Calculation: Net income $ 29,319 $ 32,069 Add convertible notes interest, net of tax (4) -- 7,302 Adjusted net income $ 29,319 $ 39,371 Basic shares plus stock options 49,143 49,525 Convertible shares (4) -- 11,899 Diluted shares outstanding 49,143 61,424 Diluted earnings per share $ 0.60 $ 0.64 See accompanying footnotes on previous page. DATASOURCE: Province Healthcare Company CONTACT: Merilyn H. Herbert, Vice President, Investor Relations of Province Healthcare Company, +1-615-370-1377 Web site: http://www.prhc.net/

Copyright