Community Health Systems, Inc. Announces First Quarter 2003 Results With Net Revenue Up 23.6%, EBITDA Up 15.3%, and Income From Operations Up 15.5%.Business Editors BRENTWOOD Brentwood, city and district, England Brentwood, city (1991 pop. 51,212) and district, Essex, SE England. Brentwood is mainly residential but produces some agricultural equipment, film, and prefabricated concrete. , Tenn.--(BUSINESS WIRE)--April 23, 2003 Community Health Systems, Inc. (NYSE NYSE See: New York Stock Exchange :CYH CYH Check Your Head (youth driven organization in Canada) CYH Consider Yourself Hugged ) today announced financial and operating results for the first quarter ended March 31, 2003. Net operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. for the first quarter ended March 31, 2003, totaled $659.3 million, a 23.6% increase compared with $533.5 million for the same period last year. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become for the first quarter of 2003 was $106.6 million, compared with $92.4 million for the same period last year, representing a 15.3% increase. Income from operations for the first quarter of 2003 was $73.0 million, compared with $63.2 million for the same period last year, representing a 15.5% increase. Net income was $33.5 million, or $0.33 per share (diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. ), on 107.8 million average shares outstanding for the quarter ended March 31, 2003, compared with $27.2 million, or $0.27 per share (diluted), on 108.2 million average shares outstanding for the same period last year. Refer to page 3 for "Financial Highlights." The consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: financial results for the first quarter ended March 31, 2003, reflect a 15.2% increase in total admissions, a 15.0% increase in adjusted admissions, and a 16.4% increase in patient days compared with the first quarter of 2002. On a same store basis, admissions decreased 0.4%, adjusted admissions decreased 1.0%, patient days increased 0.8%, and net revenues increased 8.2% compared with the same period last year. "The financial and operating results for the first quarter mark a solid start to 2003 for Community Health Systems," commented Wayne Wayne, city (1990 pop. 19,899), Wayne co., SE Mich., a suburb of Detroit, on the Lower Rouge River; inc. as a village 1869, and with surrounding areas as a city 1960. It has automobile and aircraft industries and other varied manufactures. T. Smith, chairman, president and chief executive officer of Community Health Systems, Inc. "Our strong top line growth reflects the strength of our operating strategy and our ability to continue to improve services and drive revenues in our facilities. While admissions during the first quarter were adversely affected by a weak flu season
During the first quarter, the Company completed the acquisition of seven West Tennessee West Tennessee is one of the three Grand Divisions in the U.S. state of Tennessee. Of the three, it is the most sharply defined geographically. Its boundaries are the Mississippi River on the west and the Tennessee River on the east. hospitals from Methodist Healthcare of Memphis, Tennessee For the ancient Egyptian capital, see . Memphis is a city in the southwest corner of Tennessee, and the county seat of Shelby County. Memphis rises above the Mississippi River on the 4th Chickasaw Bluff just below the mouth of the Wolf River. , increasing the number of hospitals owned or leased to 70, and adding 676 licensed beds. On January January: see month. 14, 2003, the Company announced the execution of a definitive agreement to acquire Southside Southside or South Side may refer to the following: Places United Kingdom and Ireland
tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. approvals. "Community Health Systems continues to be a leader in the non-urban hospital industry as a result of the successful execution of our acquisition strategy," added Smith. "We are off to a great start for the year with the acquisition of seven West Tennessee hospitals from Methodist Healthcare of Memphis, Tennessee, and the proposed acquisition of a hospital in Petersburg, Virginia. We intend to leverage our strong community relationships and favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. reputation as the acquirer of choice into further acquisition opportunities in 2003. We believe we are well positioned to sustain our leadership position and continue to deliver excellent results for both our shareholders and the communities we serve." Located in the Nashville, Tennessee “Nashville” redirects here. For other uses, see Nashville (disambiguation). Nashville is the capital and the second most populous city of the U.S. state of Tennessee, after Memphis. suburb suburb, a community in an outlying section of a city or, more commonly, a nearby, politically separate municipality with social and economic ties to the central city. In the 20th cent. of Brentwood, Community Health Systems is a leading operator of general acute care hospitals in non-urban communities throughout the country. Shares in Community Health Systems, Inc. are traded on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol "CYH." Community Health Systems, Inc. will hold a conference call to discuss this press release on Thursday Thursday: see week. , April 24, 2003 at 10:30 a.m. Central, 11:30 a.m. Eastern. Investors will have the opportunity to listen to a live Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the broadcast of the conference call by clicking on the Investor Relations Investor relations The process by which the corporation communicates with its investors. link of the Company's web site at www.chs.net, or www.companyboardroom.com. To listen to the live call, please go to the web site at least fifteen minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. , and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call and continue through May 24, 2003. A copy of the Company's Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. (including this press release) and conference call slide show will also be available on the Company's website at www.chs.net. Statements contained in this news release regarding expected operating results, acquisition transactions and other events are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risk and uncertainties. Actual future events or results may differ materially from these statements. Readers are referred to the documents filed by Community Health Systems, Inc. with the Securities and Exchange Commission, including the Company's Registration Statement on Form S-1 (Registration Statement No. 333-69064) and Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December December: see month. 31, 2002. These filings identify important risk factors and other uncertainties that could cause actual results to differ from those contained in the forward-looking statements.
COMMUNITY HEALTH SYSTEMS, INC.
Financial Highlights
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended
March 31,
--------------------------
2003 2002
-------- --------
Net operating revenues $659,277 $533,519
EBITDA (a) $106,574 $ 92,400
Income from Operations $ 72,960 $ 63,155
Net income $ 33,539 $ 27,176
Net income per share - basic $ 0.34 $ 0.28
Weighted average number of shares
outstanding - basic 98,355 98,112
Net income per share - diluted $ 0.33(b) $ 0.27(b)
Weighted average number of shares
outstanding - diluted 107,820(b)(c) 108,172(b)(c)
-----------------------
(a) EBITDA consists of income before interest, income taxes,
depreciation and amortization, and minority interest in earnings.
EBITDA should not be considered a measure of financial
performance under generally accepted accounting principles. Items
excluded from EBITDA are significant components in understanding
and assessing financial performance. EBITDA is an analytical
indicator used by management and the health care industry to
evaluate hospital performance, allocate resources and measure
leverage and debt service capacity. EBITDA should not be
considered in isolation or as alternatives to net income, cash
flows generated by operations, investing or financing activities,
or other financial statement data presented in the consolidated
financial statements as indicators of financial performance or
liquidity. Because EBITDA is not a measurement determined in
accordance with generally accepted accounting principles and is
thus susceptible to varying calculations, EBITDA as presented may
not be comparable to other similarly titled measures of other
companies.
We believe that income from operations is the financial measure
calculated and presented in accordance with generally accepted
accounting principles that is most directly comparable to EBITDA,
as defined. The following table reconciles EBITDA, as defined,
with our income from operations as derived directly from our
financial statements for the three months ended March 31, 2003
and 2002:
2003 2002
--------- ---------
Income from operations $ 72,960 $ 63,155
Depreciation and amortization 33,242 28,484
Minority interest in earnings 372 761
--------- ---------
EBITDA $ 106,574 $ 92,400
========= =========
(b) Adjusted to include assumed exercise of employee stock options
and assumed conversion of convertible notes. Since the income per
share impact of the conversion of the convertible notes is less
than the basic income per share for both periods presented, the
convertible notes are dilutive and accordingly, must be included
in the fully diluted calculation (after tax interest savings of
$2.2 million and 8.6 million shares added to the number of
weighted average diluted shares.)
(c) The 0.3% decrease in the weighted average number of shares
(diluted) outstanding for the first quarter ended March 31, 2003,
compared to the same period last year is due primarily to the
approximately 320,000 weighted average number of shares
repurchased under the Company's share repurchase program.
COMMUNITY HEALTH SYSTEMS, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except per share amounts)
Three Months Ended
March 31,
-----------------------
2003 2002
--------- ---------
Net operating revenues $ 659,277 $ 533,519
--------- ---------
Operating expenses:
Salaries and benefits 268,772 217,164
Provision for bad debts 62,341 49,897
Supplies 76,820 64,000
Other operating expenses 144,770 110,058
Depreciation and amortization 33,242 28,484
Minority interests in earnings 372 761
--------- ---------
Total expenses 586,317 470,364
--------- ---------
Income from operations 72,960 63,155
Interest expense, net 17,016 16,729
--------- ---------
Income before income taxes 55,944 46,426
Provision for income taxes 22,405 19,250
--------- ---------
Net income $ 33,539 $ 27,176
========= =========
Net income per share - basic $ 0.34 $ 0.28
========= =========
Net income per share - diluted $ 0.33 $ 0.27
========= =========
Weighted average number of shares
outstanding:
Basic 98,355 98,112
========= =========
Diluted 107,820 108,172
========= =========
Net income per share calculation:
Net income $ 33,539 $ 27,176
Add - Convertible notes interest,
net of taxes 2,189 2,189
--------- ---------
Adjusted net income $ 35,728 $ 29,365
========= =========
Weighted average number of shares
outstanding - basic 98,355 98,112
Add effect of dilutive securities:
Employee stock options and unvested
common shares 883 1,478
Convertible notes 8,582 8,582
--------- ---------
Weighted average number of shares
outstanding - diluted 107,820 108,172
========= =========
Net income per share - diluted $ 0.33 $ 0.27
========= =========
COMMUNITY HEALTH SYSTEMS, INC.
Selected Operating Data
(Unaudited)
($ in thousands)
For the Three Months Ended March 31,
------------------------------------
Consolidated
------------------------------------
2003 2002 % Change
---------- ---------- --------
Number of hospitals 70 59
Licensed beds 6,972 5,917
Beds in service 5,403 4,510
Admissions 61,648 53,515 15.2%
Adjusted admissions 110,730 96,281 15.0%
Patient days 245,252 210,612 16.4%
Average length of stay (days) 4.0 3.9
Occupancy rate (beds in service) 50.6% 52.8%
Net operating revenues $ 659,277 $ 533,519 23.6%
Net inpatient revenue as a % of
total net operating revenue 53.1% 52.8%
Net outpatient revenue as a % of
total net operating revenue 45.8% 45.9%
EBITDA as a % of net operating
revenue 16.2% 17.3%
For the Three Months Ended March 31,
------------------------------------
Same Hospitals
------------------------------------
2003 2002 % Change
---------- ---------- --------
Number of hospitals 59 59
Licensed beds 5,835 5,917
Beds in service 4,634 4,510
Admissions 53,288 53,515 -0.4%
Adjusted admissions 95,322 96,281 -1.0%
Patient days 212,402 210,612 0.8%
Average length of stay (days) 4.0 3.9
Occupancy rate (beds in service) 51.8% 52.8%
Net operating revenues $ 577,263 $ 533,489 8.2%
Net inpatient revenue as a % of
total net operating revenue 53.1% 52.8%
Net outpatient revenue as a % of
total net operating revenue 45.8% 45.9%
EBITDA as a % of net operating
revenue 17.4% 17.3%
COMMUNITY HEALTH SYSTEMS, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
($ in thousands)
March 31, Dec. 31,
2003 2002
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 19,563 $ 132,844
Patient accounts receivable, net 464,796 400,442
Other current assets 117,470 114,440
----------- -----------
Total current assets 601,829 647,726
----------- -----------
Property and equipment 1,435,247 1,310,738
Less accumulated depreciation and
amortization (304,981) (281,401)
----------- -----------
Property and equipment, net 1,130,266 1,029,337
----------- -----------
Goodwill, net 1,084,353 1,029,975
----------- -----------
Other assets, net 105,272 102,458
----------- -----------
Total assets $ 2,921,720 $ 2,809,496
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 19,204 $ 18,529
Accounts payable and accrued liabilities 301,277 299,901
----------- -----------
Total current liabilities 320,481 318,430
----------- -----------
Long-term debt 1,252,670 1,173,929
----------- -----------
Other long-term liabilities 111,093 102,832
----------- -----------
Stockholders' equity 1,237,476 1,214,305
----------- -----------
Total liabilities and stockholders'
equity $ 2,921,720 $ 2,809,496
=========== ===========
COMMUNITY HEALTH SYSTEMS, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
($ in thousands)
Three Months Ended
March 31,
-------------------------
2003 2002
----------- ----------
Cash flows from operating activities
Net income $ 33,539 $ 27,176
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization 33,242 28,484
Minority interest in earnings 372 761
Other non-cash (income) expenses, net (22) 519
Net changes in operating assets and
liabilities, net of effects
of acquisitions (58,621) (8,081)
----------- ----------
Net cash provided by operating
activities 8,510 48,859
----------- ----------
Cash flows from investing activities
Acquisitions of facilities (147,241) (56,106)
Purchases of property and equipment (32,258) (18,399)
Increase in other assets (7,428) (7,167)
----------- ----------
Net cash used in investing activities (186,927) (81,672)
----------- ----------
Cash flows from financing activities
Proceeds from exercise of stock options 133 49
Stock buy-back (10,290) --
Redemption of minority investments (86) --
Distribution to minority investors (1,161) --
Borrowings under Credit Agreement 80,000 56,890
Repayments of long-term indebtedness (3,460) (8,814)
----------- ----------
Net cash provided by financing
activities 65,136 48,125
----------- ----------
Net change in cash and cash equivalents (113,281) 15,312
Cash and cash equivalents at beginning
of period 132,844 8,386
----------- ----------
Cash and cash equivalents at end of period $ 19,563 $ 23,698
=========== ==========
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion