EX-99 3 a4443060ex99.txt EXHIBIT 99 PRESS RELEASE Exhibit 99 LifePoint Hospitals Reports Second Quarter 2003 Results BRENTWOOD, Tenn.--(BUSINESS WIRE)--July 28, 2003--LifePoint Hospitals, Inc. (NASDAQ:LPNT) today announced results for the second quarter and six months ended June 30, 2003. For the second quarter ended June 30, 2003, net revenues were $221.6 million, up 24.6% from $177.9 million a year ago. During the quarter ended June 30, 2003, prior year contractual adjustments increased net revenue by $1.4 million, or $0.02 per diluted share, compared with $2.1 million, or $0.03 per diluted share, for the quarter ended June 30, 2002. Net income for the quarter totaled $15.3 million, or $0.40 per diluted share, versus a net loss of $2.5 million, or $0.07 per diluted share, for the prior-year period. Included in the net loss for the quarter ended June 30, 2002, was $25.0 million of pre-tax debt retirement costs, or $0.41 per diluted share. Earnings before interest, income taxes, depreciation, amortization, ESOP expense, minority interest and debt retirement costs (adjusted EBITDA) increased 8.4% to $42.1 million for the second quarter ended June 30, 2003, from $38.7 million in the same period last year. The consolidated financial results for the second quarter ended June 30, 2003, reflect a 20.4% increase in total admissions and a 23.6% increase in equivalent admissions compared with the second quarter of 2002. On a same-hospital basis, net revenues per equivalent admission increased 5.3% compared with the same period last year as admissions and equivalent admissions were flat. For the six months ended June 30, 2003, net revenues were $442.5 million, up 23.1% from $359.5 million a year ago. For the six months ended June 30, 2003, prior year contractual adjustments increased net revenue by $4.3 million, or $0.06 per diluted share, compared with $2.1 million, or $0.03 per diluted share, for the six months ended June 30, 2002. Net income for the first six months of 2003 totaled $33.0 million, or $0.85 per diluted share, versus net income of $11.2 million, or $0.29 per diluted share, for the prior year period. Included in the net income for the six months ended June 30, 2002, was $26.3 million of pre-tax debt retirement costs, or $0.43 per diluted share. Earnings before interest, income taxes, depreciation, amortization, ESOP expense, minority interest and debt retirement costs (adjusted EBITDA) increased 8.3% to $88.1 million for the first half of 2003 from $81.3 million in the same period last year. The consolidated financial results for the six months ended June 30, 2003, reflect a 17.2% increase in total admissions and a 21.5% increase in equivalent admissions compared with the same period in 2002. On a same-hospital basis, net revenues per equivalent admission increased 4.8% compared with the same period last year on a 2.7% decrease in admissions and a 0.9% decrease in equivalent admissions. Kenneth C. Donahey, chairman and chief executive officer of LifePoint Hospitals, said, "We are pleased to once again report solid financial results. Each of our community hospitals is fulfilling its mission of delivering exceptional care on a cost-effective basis. Our dedicated hospital leadership is the key to our success and responsible for our strong financial performance, quarter after quarter and year after year. By delivering high quality patient care, we believe we will achieve the best results for our stockholders." A listen-only simulcast, as well as a 30-day replay, of LifePoint Hospitals' second quarter conference call will be available on-line at www.lifepointhospitals.com and www.companyboardroom.com on July 29, 2003, beginning at 10:00 a.m. Eastern Time. LifePoint Hospitals, Inc. operates 28 hospitals in non-urban communities. 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 9,000 employees. This release includes 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 our future results are beyond our ability to control or predict with accuracy. These statements are subject to various risks and uncertainties, including, without limitation, (i) reduction in payments to healthcare providers by government and commercial third party payors, as well as cost-containment efforts of insurers and other payors; (ii) the possibility of adverse changes in, and requirements of, applicable laws, regulations, policies and procedures, including those required by our corporate integrity agreement; (iii) our ability to manage healthcare risks and the lack of state and federal tort reform; (iv) uncertainty associated with compliance with HIPAA regulations; (v) our ability to enter into and renew payor arrangements on acceptable terms; (vi) our ability to maintain and increase patient volumes and control costs; (vii) the availability, cost and terms of insurance coverage; (viii) the highly competitive nature of the healthcare business, including the competition to recruit and retain physicians; (ix) the ability to attract and retain qualified management and personnel; (x) the geographic concentration of our operations; (xi) our ability to acquire hospitals on favorable terms and to complete budgeted capital improvements successfully; (xii) our ability to integrate newly acquired facilities successfully; (xiii) the availability and terms of capital to fund our business strategy; (xiv) changes in our liquidity or indebtedness; (xv) the potential adverse impact of government investigations and litigation involving the business practices of healthcare providers; (xvi) successful development or license of software and management information systems; (xvii) changes in generally accepted accounting principles or practices; (xviii) volatility in the market value of our common stock; (xix) changes in general economic conditions and changes in the manner in which employers provide healthcare coverage to their employees; and (xx) those risks and uncertainties described from time to time in our filings with the Securities and Exchange Commission. Therefore, our future results may differ materially from those described in this release. We undertake 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 release refer to LifePoint Hospitals, Inc. and its affiliates. LIFEPOINT HOSPITALS, INC. UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS Dollars in millions (except per share amounts), share amounts in thousands For the Three Months Ended June 30, 2003 2002 ---------------- ---------------- Amount Ratio Amount Ratio ------- ------- ------- ------- Revenues (1) $221.6 100.0% $177.9 100.0% Salaries and benefits 90.8 41.0% 70.9 39.8% Supplies 28.7 13.0% 21.9 12.3% Other operating expenses 43.1 19.4% 33.3 18.7% Provision for doubtful accounts 16.9 7.6% 13.1 7.4% Depreciation and amortization 11.4 5.1% 9.7 5.5% Interest expense, net 3.3 1.5% 2.8 1.6% Debt retirement costs -- -- % 25.0 14.0% ESOP expense 1.5 0.7% 2.7 1.5% ------- ------- ------- ------- 195.7 88.3% 179.4 100.8% ------- ------- ------- ------- Income (loss) before minority interest and income taxes 25.9 11.7% (1.5) (0.8%) Minority interest in earnings of consolidated entity 0.2 0.1% 0.8 0.4% ------- ------- ------- ------- Income (loss) before income taxes 25.7 11.6% (2.3) (1.2%) Provision for income taxes 10.4 4.7% 0.2 0.2% ------- ------- ------- ------- Net income (loss) $15.3 6.9% $(2.5) (1.4%) ======= ======= ======= ======= Earnings (loss) per share - basic $0.41 $(0.07) ======= ======= Earnings (loss) per share - diluted (2) (3) $0.40 $(0.07) ======= ======= Earnings Per Share Calculation: Net income (loss) $15.3 $(2.5) Add: Interest on convertible notes, net of taxes 2.0 -- ------- ------- Adjusted net income (loss) $17.3 $(2.5) ======= ======= Weighted average number of shares - basic 37,402 37,485 Add: Shares for conversion of convertible notes 5,279 -- Other share equivalents 664 -- ------- ------- Weighted average number of shares and equivalents - diluted 43,345 37,485 ======= ======= Earnings (loss) per share - diluted (2) (3) $0.40 $(0.07) ======= ======= For the Six Months Ended June 30, 2003 2002 ---------------- ---------------- Amount Ratio Amount Ratio ------- -------- ------- ------- Revenues (1) $442.5 100.0% $359.5 100.0% Salaries and benefits 181.1 40.9% 141.6 39.4% Supplies 57.2 12.9% 44.8 12.5% Other operating expenses 81.7 18.5% 65.5 18.2% Provision for doubtful accounts 34.4 7.8% 26.3 7.3% Depreciation and amortization 22.6 5.1% 19.1 5.4% Interest expense, net 6.6 1.5% 6.9 1.9% Debt retirement costs -- -- % 26.3 7.3% ESOP expense 3.1 0.7% 5.2 1.4% ------- ------- ------- ------- 386.7 87.4% 335.7 93.4% ------- ------- ------- ------- Income (loss) before minority interest and income taxes 55.8 12.6% 23.8 6.6% Minority interest in earnings of consolidated entity 0.2 -- % 1.5 0.4% ------- ------- ------- ------- Income (loss) before income taxes 55.6 12.6% 22.3 6.2% Provision for income taxes 22.6 5.1% 11.1 3.1% ------- ------- ------- ------- Net income (loss) $33.0 7.5% $11.2 3.1% ======= ====== ======= ======= Earnings (loss) per share - basic $0.88 $0.30 ======= ======= Earnings (loss) per share - diluted (2) (3) $0.85 $0.29 ======= ======= Earnings Per Share Calculation: Net income (loss) $33.0 $11.2 Add: Interest on convertible notes, net of taxes 3.9 -- ------- ------- Adjusted net income (loss) $36.9 $11.2 ======= ======= Weighted average number of shares - basic 37,639 37,394 Add: Shares for conversion of convertible notes 5,279 -- Other share equivalents 710 1,167 ------- ------- Weighted average number of shares and equivalents - diluted 43,628 38,561 ======= ======= Earnings (loss) per share - diluted (2) (3) $0.85 $0.29 ======= ======= (1) Prior year contractual adjustments increased revenues by $1.4 million, or $0.02 per diluted share, for the three months ended June 30, 2003, and by $4.3 million, or $0.06 per diluted share, for the six months ended June 30, 2003. Prior year contractual adjustments increased revenues by $2.1 million, or $0.03 per diluted share, for the three months and six months ended June 30, 2002. (2) The impact of the 2.3 million potential weighted average shares of common stock, if converted, and interest expense related to the convertible notes was not included in the computation of diluted earnings per share for the three months ended June 30, 2002, because the effect would have been anti-dilutive. In addition, the impact of the 1.2 million potential weighted average shares of common stock related to outstanding stock options was not included in the computation of diluted earnings per share for the three months ended June 30, 2002, because the effect would have been anti-dilutive. (3) The impact of the 1.2 million potential weighted average shares of common stock, if converted, and interest expense related to the convertible notes was not included in the computation of diluted earnings per share for the six months ended June 30, 2002, because the effect would have been anti-dilutive. LIFEPOINT HOSPITALS, INC. CONSOLIDATED BALANCE SHEETS In millions June 30, Dec. 31, 2003 2002 ------- ------- (Unaudited) (1) ASSETS Current assets: Cash and cash equivalents $19.5 $23.0 Accounts receivable, less allowances for doubtful accounts of $109.1 and $109.1 at June 30, 2003 and December 31, 2002, respectively 94.2 85.0 Inventories 21.1 20.5 Deferred income taxes and other current assets 21.1 14.8 ------- ------- 155.9 143.3 Property and equipment: Land 11.4 11.3 Buildings and improvements 291.3 285.3 Equipment 309.2 295.5 Construction in progress 33.1 18.1 ------- ------- 645.0 610.2 Accumulated depreciation (257.7) (238.0) ------- ------- 387.3 372.2 Deferred loan costs, net 7.8 8.6 Unallocated purchase price 135.3 136.1 Intangible assets, net 3.5 3.8 Other -- 0.3 Goodwill 69.2 69.2 ------- ------- $759.0 $733.5 ======= ======= LIABILITIES AND EQUITY Current liabilities: Accounts payable $29.2 $28.5 Accrued salaries 21.4 24.4 Other current liabilities 17.4 14.3 Estimated third-party payor settlements 5.9 8.2 ------- ------- 73.9 75.4 Long-term debt 250.0 250.0 Deferred income taxes 26.4 24.9 Professional and general liability risks and other liabilities 29.6 25.6 Minority interest in equity of consolidated entity 1.2 -- Stockholders' equity: Preferred stock -- -- Common stock 0.4 0.4 Capital in excess of par value 293.6 297.2 Unearned ESOP compensation (17.7) (19.3) Retained earnings 101.6 79.3 ------- ------- 377.9 357.6 ------- ------- $759.0 $733.5 ======= ======= (1) Derived from audited financial statements. LIFEPOINT HOSPITALS, INC. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS In millions Three Months Six Months Ended Ended June 30, June 30, -------------- -------------- 2003 2002 2003 2002 ------ ------ ------ ------ Cash flows from operating activities: Net income (loss) $15.3 $(2.5) $33.0 $11.2 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 11.4 9.7 22.6 19.1 ESOP expense 1.5 2.7 3.1 5.2 Minority interest in earnings of consolidated entity 0.2 0.8 0.2 1.5 Deferred income taxes (benefit) 2.2 (1.2) 2.1 (0.8) Reserve for professional and general liability risks, net 2.6 2.0 3.8 5.1 Debt retirement costs -- 25.0 -- 26.3 Tax benefit from stock option exercises 0.2 0.3 0.2 1.0 Increase (decrease) in cash from operating assets and liabilities, net of effects from acquisitions: Accounts receivable 3.2 2.6 (7.9) (18.2) Inventories and other current assets (0.6) (1.7) (3.4) (3.1) Accounts payable and accrued expenses (0.4) 2.6 2.0 4.1 Income taxes payable (16.1) (14.5) (4.3) (2.5) Estimated third-party payor settlements (3.7) (6.9) (2.3) 4.4 Other 0.1 (0.5) 1.0 (0.7) ------ ------ ------ ------ Net cash provided by operating activities 15.9 18.4 50.1 52.6 Cash flows from investing activities: Purchases of property and equipment, net (20.8) (16.8) (38.0) (26.8) Purchase of short-term investments -- (21.5) -- (21.5) Other 0.6 (1.2) 0.4 (1.3) ------ ------ ------ ------ Net cash used in investing activities (20.2) (39.5) (37.6) (49.6) Cash flows from financing activities: Repurchase of common stock (17.0) -- (17.0) -- Repurchase 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 0.3 1.0 0.5 2.2 Other 0.2 0.4 0.5 0.3 ------ ------ ------ ------ Net cash (used in) provided by financing activities (16.5) 102.4 (16.0) 94.9 Change in cash and cash equivalents (20.8) 81.3 (3.5) 97.9 Cash and cash equivalents at beginning of period 40.3 73.8 23.0 57.2 ------ ------ ------ ------ Cash and cash equivalents at end of period $19.5 $155.1 $19.5 $155.1 ====== ====== ====== ====== Interest payments $6.1 $7.8 $6.3 $8.4 ====== ====== ====== ====== Income taxes paid, net $24.3 $15.4 $24.7 $13.2 ====== ====== ====== ====== LIFEPOINT HOSPITALS, INC. UNAUDITED SUPPLEMENTAL INFORMATION Dollars in millions, except per share amounts For the Three Months Ended June 30, 2003 2002 -------------- -------------- Amount Ratio Amount Ratio ------ ------ ------ ------ Revenues (1) $221.6 100.0% $177.9 100.0% Salaries and benefits 90.8 41.0% 70.9 39.8% Supplies 28.7 13.0% 21.9 12.3% Other operating expenses 43.1 19.4% 33.3 18.7% Provision for doubtful accounts 16.9 7.6% 13.1 7.4% ------ ------ ------ ------ Adjusted EBITDA (2) $42.1 19.0% $38.7 21.8% ====== ====== ====== ====== For the Six Months Ended June 30, 2003 2002 -------------- -------------- Amount Ratio Amount Ratio ------ ------ ------ ------ Revenues (1) $442.5 100.0% $359.5 100.0% Salaries and benefits 181.1 40.9% 141.6 39.4% Supplies 57.2 12.9% 44.8 12.5% Other operating expenses 81.7 18.5% 65.5 18.2% Provision for doubtful accounts 34.4 7.8% 26.3 7.3% ------ ------ ------ ------- Adjusted EBITDA (2) $88.1 19.9% $81.3 22.6% ======= ====== ====== ======= (1) Prior year contractual adjustments increased revenues by $1.4 million, or $0.02 per diluted share, for the three months ended June 30, 2003, and by $4.3 million, or $0.06 per diluted share, for the six months ended June 30, 2003. Prior year contractual adjustments increased revenues by $2.1 million, or $0.03 per diluted share, for the three months and six months ended June 30, 2002. (2) Adjusted EBITDA is defined as income before depreciation and amortization, interest expense, debt retirement costs, ESOP expense, minority interest in earnings of consolidated entity and income taxes. Our management uses adjusted EBITDA to evaluate our operating performance and as a measure of performance for incentive compensation purposes. We believe adjusted EBITDA is a measure of performance used by some investors, equity analysts and others to make informed investment decisions. In addition, multiples of current or projected adjusted EBITDA are used to estimate current or prospective enterprise value. Adjusted EBITDA should not be considered as a measure of financial performance under accounting principles generally accepted in the United States, and the items excluded from adjusted EBITDA are significant components in understanding and assessing financial performance. Adjusted EBITDA should not be considered in isolation or as an alternative to net income, cash flows generated by operating, investing or financing activities or other financial statement data presented in the consolidated financial statements as an indicator of financial performance or 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. The following table reconciles adjusted EBITDA as presented above to net income (loss) as reflected in the unaudited consolidated statements of operations and in accordance with generally accepted accounting principles (in millions): Three Months Six Months Ended Ended June 30, June 30, -------------- -------------- 2003 2002 2003 2002 ------ ------ ------ ------ Adjusted EBITDA $42.1 $38.7 $88.1 $81.3 Depreciation and amortization 11.4 9.7 22.6 19.1 Interest expense, net 3.3 2.8 6.6 6.9 Debt retirement costs - 25.0 - 26.3 ESOP expense 1.5 2.7 3.1 5.2 Minority interest in earnings of consolidated entity 0.2 0.8 0.2 1.5 Provision for income taxes 10.4 0.2 22.6 11.1 ------ ------ ------ ------ Net income (loss) $15.3 $(2.5) $33.0 $11.2 ====== ====== ====== ====== LIFEPOINT HOSPITALS, INC. UNAUDITED STATISTICS Three Months Ended June 30, ------------------------- % 2003 2002 Change ------- ------- ------- Actual: Number of hospitals at end of period 28 23 21.7% Licensed beds at end of period 2,624 2,197 19.4% Weighted average licensed beds 2,624 2,197 19.4% Average daily census 997 826 20.7% Average length of stay 4.1 4.1 -% Revenues ($ in millions) $221.6 $177.9 24.6% Revenues per equivalent admission $4,962 $4,924 0.8% Equivalent admissions (1) 44,654 36,114 23.6% Outpatient factor (1) 2.0 1.95 2.7% Outpatient surgeries 19,225 16,079 19.6% Inpatient surgeries 6,691 5,732 16.7% Emergency room visits 106,305 88,103 20.7% Admissions 22,337 18,548 20.4% Medicare case mix index 1.18 1.17 0.9% Net outpatient revenues as a percentage of net revenues 50.9% 51.1% N/A Same-Hospital: (2) Number of hospitals at end of period 23 23 -% Licensed beds at end of period 2,203 2,197 0.3% Weighted average licensed beds 2,203 2,197 0.3% Average daily census 832 826 0.7% Average length of stay 4.1 4.1 -% Revenues ($ in millions) $187.1 $177.9 5.2% Revenues per equivalent admission $5,184 $4,924 5.3% Equivalent admissions (1) 36,101 36,114 -% Outpatient factor (1) 1.95 1.95 -% Outpatient surgeries 16,238 16,079 1.0% Inpatient surgeries 5,690 5,732 (0.7%) Emergency room visits 86,161 88,103 (2.2%) Admissions 18,539 18,548 -% Medicare case mix index 1.20 1.17 2.6% Net outpatient revenues as a percentage of net revenues 49.6% 51.1% N/A Six Months Ended June 30, ------------------------- % 2003 2002 Change ------- ------- ------- Actual: Number of hospitals at end of period 28 23 21.7% Licensed beds at end of period 2,624 2,197 19.4% Weighted average licensed beds 2,622 2,197 19.3% Average daily census 1,026 880 16.6% Average length of stay 4.1 4.1 -% Revenues ($ in millions) $442.5 $359.5 23.1% Revenues per equivalent admission $4,940 $4,877 1.3% Equivalent admissions (1) 89,566 73,702 21.5% Outpatient factor (1) 1.96 1.89 3.7% Outpatient surgeries 38,084 32,245 18.1% Inpatient surgeries 13,354 11,384 17.3% Emergency room visits 206,043 173,090 19.0% Admissions 45,814 39,099 17.2% Medicare case mix index 1.19 1.16 2.6% Net outpatient revenues as a percentage of net revenues 50.5% 49.4% N/A Same-Hospital: (2) Number of hospitals at end of period 23 23 -% Licensed beds at end of period 2,203 2,197 0.3% Weighted average licensed beds 2,201 2,197 0.2% Average daily census 861 880 (2.2%) Average length of stay 4.1 4.1 -% Revenues ($ in millions) $373.3 $359.5 3.9% Revenues per equivalent admission $5,110 $4,877 4.8% Equivalent admissions (1) 73,052 73,702 (0.9%) Outpatient factor (1) 1.92 1.89 1.9% Outpatient surgeries 32,148 32,245 (0.3%) Inpatient surgeries 11,349 11,384 (0.3%) Emergency room visits 170,653 173,090 (1.4%) Admissions 38,028 39,099 (2.7%) Medicare case mix index 1.20 1.16 3.4% Net outpatient revenues as a percentage of net revenues 49.7% 49.4% N/A (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 outpatient factor (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) Same-hospital information excludes the operations of hospitals that the Company acquired during the periods presented. The costs of corporate overhead are included in same-hospital information. CONTACT: LifePoint Hospitals Michael J. Culotta, 615-372-8512