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/
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