EX-99 3 g77335exv99.txt PRESS RELEASE EXHIBIT 99 LIFEPOINT HOSPITALS, INC. CONTACT: MICHAEL J. CULOTTA SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER (615) 372-8512 LIFEPOINT HOSPITALS REPORTS 54.5% INCREASE IN SECOND QUARTER 2002 EPS BEFORE EXTRAORDINARY LOSS BRENTWOOD, TENNESSEE (July 22, 2002) - LifePoint Hospitals, Inc. (NASDAQ: LPNT) today announced results for the second quarter and six months ended June 30, 2002. For the second quarter ended June 30, 2002, net revenues were $177.9 million, up 17.3% from $151.6 million a year ago. Income before extraordinary item for the quarter totaled $13.1 million, or $0.34 per diluted share, versus $8.5 million, or $0.22 per diluted share, in the prior-year period, representing increases of 54.6% and 54.5%, respectively. As was previously announced, the Company recorded an after-tax extraordinary charge to income of $15.6 million for the quarter ended June 30, 2002, related to the repurchase of $120.5 million of an original $150.0 million in principal amount of outstanding 10 3/4% Senior Subordinated Notes due 2009 issued by the Company's wholly owned subsidiary, LifePoint Hospitals Holdings, Inc. This charge includes the premium paid for the Notes (the amount paid in excess of the face value of the Notes), deferred loan costs allocable to the Notes purchased and fees and expenses incurred in connection with the purchases. During the three months ended June 30, 2001, the Company wrote off $2.6 million of deferred loan costs related to the original credit agreement, which resulted in an extraordinary charge of $1.6 million, or $0.04 per diluted share. Including extraordinary items in both periods, net loss for the quarter ended June 30, 2002, totaled $2.5 million, or $0.06 per diluted share, compared with net income for the prior year of $6.9 million, or $0.18 per diluted share. Earnings before interest, income taxes, depreciation, amortization, ESOP expense, minority interest and extraordinary loss (EBITDA) increased 21.8% to $38.7 million from $31.8 million in the same period last year. For the six months ended June 30, 2002, net revenues were $359.5 million, up 17.5% from $305.9 million a year ago. Income before extraordinary item for the six-month period totaled $27.6 million, or $0.71 per diluted share, versus $17.1 million, or $0.47 per diluted share (including a $0.5 million pre-tax gain, or $0.01 per diluted share), in the prior-year period, representing increases of 61.6% and 51.1%, respectively. The after-tax extraordinary charges to income mentioned above were $16.4 million and $1.6 million for the six months ended June 30, 2002 and 2001, respectively. For the six months ended June 30, 2002, the Company repurchased $128 million of the 10 3/4% Senior Subordinated Notes due 2009. Including extraordinary items in both periods, net income for the six months ended June 30, 2002, totaled $11.2 million, or $0.30 per diluted share, compared with net income for the six months ended June 30, 2001, of $15.5 million, or $0.43 per diluted share. Earnings before interest, income taxes, depreciation, amortization, ESOP expense, minority interest, gain on previously impaired asset and extraordinary loss (EBITDA) increased 23.6% to $81.3 million from $65.8 million in the same period last year. -MORE- LPNT Announces Second Quarter Results Page 2 July 22, 2002 During the quarter, the Company completed an offering of an aggregate of $250 million of its 4 1/2% Convertible Subordinated Notes due June 1, 2009. After paying expenses associated with the offering, LifePoint realized net proceeds from the offering of $242.7 million. Kenneth C. Donahey, chairman and chief executive officer of LifePoint Hospitals, said, "During the second quarter, the Company took steps to facilitate continued strong financial performance by substantially strengthening its balance sheet. Our repurchase of a majority of the outstanding 10 3/4% Senior Subordinated Notes due 2009 and our issuance of $250 million in 4 1/2% Convertible Subordinated Notes due June 1, 2009, along with funds available under our $200 million revolving credit facility, give us the resources necessary to support our financial goals. From acquisitions to physician recruiting to adding new technology, I believe we are well positioned to continue our strong performance." Mr. Donahey continued, "I'm proud of the efforts of our employees in delivering another exceptional quarter. I am personally grateful to each of you for your contribution and hard work, and I am honored to be your colleague. Delivering strong performance for our shareholders is commendable, but doing so by providing outstanding care in our communities is indeed a higher calling." A listen-only simulcast and replay of LifePoint Hospitals' second quarter conference call will be available on-line at www.lifepointhospitals.com and www.companyboardroom.com on July 23, 2002, beginning at 10:00 a.m. Eastern Time. LifePoint Hospitals, Inc. operates 23 hospitals in non-urban areas. In most cases, the LifePoint facility is the only hospital in its community. LifePoint's non-urban operating strategy offers continued operational improvement by focusing on its five core values: delivering 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 over 7,000 employees. ****** The above statements include 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 the Company's future results are beyond the ability of the Company to control or predict. These statements are subject to risks and uncertainties relating to the Company, including without limitation, (i) possible changes in reimbursement to healthcare providers and insurers that may reduce payments; (ii) its ability to attract and retain qualified management and personnel, including physicians, nurses and clinical support personnel; (iii) the geographic concentration of the Company's operations; (iv) risks associated with the Company's acquisition and disposition strategies; (v) the management of healthcare risks as a result of the delivery of patient care; (vi) the regulated nature of the healthcare industry; (vii) the highly competitive nature of the healthcare business; (viii) the potential adverse impact of government investigations and litigation involving the business practices of HCA (to the extent relating to periods prior to the Company's formation); (ix) fluctuations in the market value of the Company's common stock; (x) the possibility that existing accounting practices relating to the treatment of the extraordinary charge to be incurred by the Company will be changed based on current proposals; (xi) the possibility that the Company's judgment regarding the tax implications of the purchase of its 10 3/4% Senior Subordinated Notes could be challenged; (xii) the possibility that the Company's liquidity needs could change; and (xiii) those risks and uncertainties detailed from time to time in the Company's filings with the Securities and Exchange Commission. Therefore, the Company's actual results may differ materially. The Company 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 "Company" and "LifePoint" as used throughout this document refer to LifePoint Hospitals, Inc. and its affiliates. -MORE- LPNT Announces Second Quarter Results Page 3 July 22, 2002 LIFEPOINT HOSPITALS, INC. UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED JUNE 30, JUNE 30, ------------------------------------------- ------------------------------------------ 2002 2001 2002 2001 ------------------- ------------------ ------------------ ------------------- AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO ------ ------ ------ ------ ------ ------ ------ ------ Revenues $177.9 100.0% $151.6 100.0% $359.5 100.0% $305.9 100.0% Salaries and benefits 70.9 39.8% 59.4 39.2% 141.6 39.4% 119.7 39.1% Supplies 21.9 12.3% 18.8 12.4% 44.8 12.5% 38.4 12.5% Other operating expenses 33.3 18.7% 31.0 20.4% 65.5 18.2% 59.4 19.5% Provision for doubtful accounts 13.1 7.4% 10.6 7.0% 26.3 7.3% 22.6 7.4% ------ ----- ------ ----- ------ ----- ------ ----- 139.2 78.2% 119.8 79.0% 278.2 77.4% 240.1 78.5% ------ ----- ------ ----- ------ ----- ------ ----- EBITDA 38.7 21.8% 31.8 21.0% 81.3 22.6% 65.8 21.5% Depreciation and amortization 9.7 5.5% 8.5 5.7% 19.1 5.4% 16.6 5.4% Interest expense, net 2.8 1.6% 3.7 2.4% 6.9 1.9% 10.2 3.3% Gain on previously impaired assets -- -- -- -- -- -- (0.5) (0.2)% ESOP expense 2.7 1.5% 2.4 1.6% 5.2 1.4% 5.0 1.7% ------ ----- ------ ----- ------ ----- ------ ----- Income before minority interests, income taxes and extraordinary item 23.5 13.2% 17.2 11.3% 50.1 13.9% 34.5 11.3% Minority interests 0.8 0.4% 0.7 0.4% 1.5 0.4% 1.3 0.5% ------ ----- ------ ----- ------ ----- ------ ----- Income before income taxes and extraordinary item 22.7 12.8% 16.5 10.9% 48.6 13.5% 33.2 10.8% Provision for income taxes 9.6 5.4% 8.0 5.3% 21.0 5.8% 16.1 5.2% ------ ----- ------ ----- ------ ----- ------ ----- Income before extraordinary item 13.1 7.4% 8.5 5.6% 27.6 7.7% 17.1 5.6% Extraordinary loss on early retirement of debt, net 15.6 8.8% 1.6 1.0% 16.4 4.6% 1.6 0.5% ------ ----- ------ ----- ------ ----- ------ ----- Net income (loss) $ (2.5) (1.4)% $ 6.9 4.6% $ 11.2 3.1% $ 15.5 5.1% ====== ===== ====== ===== ====== ===== ====== ===== Shares used in diluted EPS (000's) 38,667 37,662 39,728 35,875 Diluted earnings (loss) per share: Income before gain on previously impaired assets and extraordinary item $ 0.34 $ 0.22 $ 0.71 $ 0.46 Gain on previously impaired assets, net -- -- -- 0.01 Extraordinary loss on early retirement of debt, net (0.40) (0.04) (0.41) (0.04) ------ ------ ------ ------ Net income (loss)(1) $(0.06) $ 0.18 $ 0.30 $ 0.43 ====== ====== ====== ======
(1) In April 2002, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 145, "Recission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections." The recission of FASB Statement No. 4, "Reporting Gains and Losses from Extinguishment of Debt," no longer allows companies to report gains or losses from extinguishment of debt as an extraordinary item. Effective January 1, 2003, the Company will adopt FASB Statement No. 145. This will result in a $0.01 decrease in net income (loss) per diluted share from $(0.06) to $(0.07) and from $0.30 to $0.29 for the three months and six months ended June 30, 2002, respectively. -MORE- LPNT Announces Second Quarter Results Page 4 July 22, 2002 LIFEPOINT HOSPITALS, INC. UNAUDITED STATISTICS
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, ---------------------------------- ----------------------------------- % % 2002 2001 CHANGE 2002 2001 CHANGE ------- ------- ------ -------- -------- ------ Number of hospitals at end of period 23 21 9.5% 23 21 9.5% Licensed beds at end of period 2,197 1,963 11.9% 2,197 1,963 11.9% Weighted average licensed beds 2,197 1,971 11.5% 2,197 1,980 11.0% Average daily census 826 755 9.4% 880 805 9.3% Average length of stay 4.1 4.0 2.5% 4.1 4.0 2.5% ACTUAL: Admissions 18,548 17,128 8.3% 39,099 36,028 8.5% Equivalent admissions(1) 36,114 31,379 15.1% 73,702 64,454 14.3% Revenues ($ in millions) $ 177.9(2) $ 151.6 17.3% $ 359.5(3) $ 305.9 17.5% Revenues per equivalent admission $ 4,924 $ 4,833 1.9% $ 4,877 $ 4,746 2.8% Outpatient factor(1) 1.95 1.83 1.89 1.79 Total surgeries 21,811 19,109 14.1% 43,629 37,706 15.7% Outpatient surgeries 16,079 14,250 12.8% 32,245 27,805 16.0% Emergency room visits 88,103 76,201 15.6% 173,090 153,774 12.6% Net outpatient revenues as a percentage of net revenues 51.1% 48.1% 49.4% 46.8% SAME-HOSPITAL(4): Admissions 17,123 17,128 --% 35,866 36,028 (0.4)% Equivalent admissions(1) 32,792 31,379 4.5% 66,567 64,454 3.3% Revenues ($ in millions) $ 163.1(2) $ 151.6 7.6% $ 329.5(3) $ 305.7 7.8% Revenues per equivalent admission $ 4,974 $ 4,833 2.9% $ 4,950 $ 4,744 4.3% Outpatient factor(1) 1.91 1.83 1.86 1.79 Total surgeries 20,392 19,109 6.7% 40,592 37,706 7.7% Outpatient surgeries 15,066 14,250 5.7% 30,107 27,805 8.3% Emergency room visits 79,918 76,201 4.9% 156,676 153,774 1.9%
(1) Equivalent admissions is used by management and investors as a general measure of combined inpatient and outpatient volume. Equivalent admissions is computed by multiplying admissions (inpatient volumes) by the sum of gross inpatient revenue and gross outpatient revenue and then dividing the resulting amount 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. (2) In addition to same-hospital revenue growth of $11.5 million over the prior year period, 2001 acquisitions increased the growth in actual revenues by $14.8 million. (3) In addition to same-hospital revenue growth of $23.8 million over the prior year period, 2001 acquisitions increased the growth in actual revenues by $29.8 million. (4) Same hospital information excludes the operations of hospitals which the Company either acquired or divested during the years presented. The costs of corporate overhead are included in same hospital information. -MORE- LPNT Announces Second Quarter Results Page 5 July 22, 2002 LIFEPOINT HOSPITALS, INC. CONSOLIDATED BALANCE SHEETS DOLLARS IN MILLIONS
JUNE 30, DECEMBER 31, 2002 2001 -------- ------------ (UNAUDITED) ASSETS Current assets: Cash and cash equivalents $ 155.1 $ 57.2 Short-term investments 21.5 -- Accounts receivable, net 74.9 56.7 Inventories 16.8 16.3 Deferred income taxes and other current assets 25.3 18.7 -------- -------- 293.6 148.9 Property and equipment: Land 10.7 10.7 Buildings and improvements 262.9 262.0 Equipment 277.7 263.4 Construction in progress 20.2 7.2 -------- -------- 571.5 543.3 Accumulated depreciation (223.1) (204.9) -------- -------- 348.4 338.4 Deferred loan costs, net 9.9 7.1 Goodwill 47.2 47.1 Other 12.5 12.8 -------- -------- $ 711.6 $ 554.3 ======== ======== LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 18.5 $ 19.0 Accrued salaries 18.4 18.6 Other current liabilities 17.7 10.7 Estimated third-party payor settlements 22.3 17.9 -------- -------- 76.9 66.2 Long-term debt 272.0 150.0 Deferred income taxes 21.7 21.0 Professional liability risks and other liabilities 21.5 16.9 Minority interests in equity of consolidated entity 4.5 5.2 Stockholders' equity: Preferred stock -- -- Common stock 0.4 0.4 Capital in excess of par value 292.2 285.0 Unearned ESOP compensation (20.9) (22.5) Notes receivable for shares sold to employees (5.7) (5.7) Retained earnings 49.0 37.8 -------- -------- 315.0 295.0 -------- -------- $ 711.6 $ 554.3 ======== ========
LPNT Announces Second Quarter Results Page 6 July 22, 2002 LIFEPOINT HOSPITALS, INC. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS DOLLARS IN MILLIONS
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, ------------------ ------------------ 2002 2001 2002 2001 ------ ------ ------ ------ Cash flows from operating activities: Net income (loss) $ (2.5) $ 6.9 $ 11.2 $ 15.5 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 9.7 8.5 19.1 16.6 ESOP expense 2.7 2.4 5.2 5.0 Minority interests in earnings of consolidated entity 0.8 0.7 1.5 1.3 Deferred income taxes (benefit) (1.2) (0.2) (0.8) (0.7) Reserve for professional liability risk, net 2.0 2.7 5.1 4.1 Extraordinary loss on early retirement of debt 25.0 2.6 26.3 2.6 Gain on previously impaired assets -- -- -- (0.5) Tax benefit from stock option exercises 0.3 0.7 1.0 0.7 Increase (decrease) in cash from operating assets and liabilities, net of effects of acquisitions: Accounts receivable 2.6 4.0 (18.2) (9.5) Inventories and other current assets (1.7) 0.1 (3.1) 0.2 Accounts payable and accrued expenses 2.6 (4.6) 4.1 2.8 Income taxes payable (14.5) (5.6) (2.5) 3.1 Estimated third-party payor settlements (6.9) (5.4) 4.4 8.9 Other (0.5) 0.2 (0.7) 0.5 ------ ------ ------ ------ Net cash provided by operating activities 18.4 13.0 52.6 50.6 Cash flows from investing activities: Purchases of property and equipment, net (16.8) (13.2) (26.8) (22.6) Purchase of facilities -- (5.7) -- (5.7) Purchases of short-term investments (21.5) -- (21.5) -- Other (1.2) 4.8 (1.3) 4.8 ------ ------ ------ ------ Net cash used in investing activities (39.5) (14.1) (49.6) (23.5) Cash flows from financing activities: Proceeds from stock offering, net -- -- -- 100.4 Repayments of bank debt -- (117.1) -- (139.3) Repurchases of senior subordinated notes (141.7) -- (150.3) -- Proceeds from issuance of convertible notes, net 242.7 -- 242.7 -- Proceeds from exercise of stock options 1.0 1.2 2.2 1.5 Other 0.4 (0.1) 0.3 0.1 ------ ------ ------ ------ Net cash provided by (used in) financing activities 102.4 (116.0) 94.9 (37.3) Change in cash and cash equivalents 81.3 (117.1) 97.9 (10.2) Cash and cash equivalents at beginning of period 73.8 146.6 57.2 39.7 ------ ------ ------ ------ Cash and cash equivalents at end of period $155.1 $ 29.5 $155.1 $ 29.5 ====== ====== ====== ====== Interest payments $ 7.8 $ 9.1 $ 8.4 $ 12.2 Income taxes paid, net $ 15.4 $ 11.8 $ 13.2 $ 11.8
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