IASIS Healthcare® LLC (“IASIS”)
today announced financial and operating results for the fiscal third
quarter and nine months ended June 30, 2008.
Net revenue for the third quarter totaled $532.6 million, an increase of
18.2%, compared to $450.7 million in the prior year quarter. Adjusted
EBITDA for the third quarter totaled $69.3 million, an increase of
26.5%, compared to $54.8 million in the prior year quarter. A table
describing adjusted EBITDA and reconciling net earnings from continuing
operations to adjusted EBITDA is included in this press release in the
attached Supplemental Consolidated Statements of Operations Information.
Net earnings from continuing operations for the third quarter totaled
$14.8 million, compared to $6.8 million in the prior year quarter.
IASIS’ net earnings from continuing operations
for the prior year quarter include a loss on extinguishment of debt of
$6.2 million associated with the refinancing of its senior secured
credit facilities and $1.5 million in business interruption insurance
recoveries received in connection with the final settlement of the
insurance claim associated with the temporary closure and disruption of
operations at The Medical Center of Southeast Texas, as a result of
Hurricane Rita.
Admissions and adjusted admissions increased 8.1% and 8.9%,
respectively, in the third quarter, compared to the prior year quarter.
Net patient revenue per adjusted admission increased 5.9% in the third
quarter, compared to the prior year quarter. Net patient revenue
includes certain supplemental Medicaid reimbursement totaling $5.4
million for the third quarter, compared to $6.9 million in the prior
year quarter. Excluding the impact of this supplemental Medicaid
reimbursement, net patient revenue per adjusted admission for the third
quarter increased 6.6%, compared to the prior year quarter.
On a same-facility basis, admissions and adjusted admissions increased
0.4% and 2.4%, respectively, in the third quarter, while net patient
revenue per adjusted admission increased 4.9%, compared to the prior
year quarter. Excluding the impact of supplemental Medicaid
reimbursement, same-facility net patient revenue per adjusted admission
for the third quarter increased 5.5%, compared to the prior year quarter.
In commenting on quarterly results, David R. White, chairman and chief
executive officer of IASIS Healthcare, said, “Our
uncompromising commitment to operational excellence, combined with the
contributions of new and recently acquired hospital facilities, has led
to another quarter of solid gains in volume, net revenue and adjusted
EBITDA. We intend to continue our disciplined approach of investing
capital in our facilities, recruiting physicians, and controlling
expenses as we enable our hospitals to continuously enhance and expand
the high-quality healthcare services they provide in their communities.”
Net revenue for the nine months ended June 30, 2008, totaled $1.6
billion, an increase of 19.8%, compared to $1.3 billion in the prior
year period. Adjusted EBITDA for the nine months ended June 30, 2008,
totaled $206.9 million, an increase of 20.6%, compared to $171.5 million
in the prior year period. Net earnings from continuing operations for
the nine months ended June 30, 2008, totaled $42.8 million, compared to
$33.6 million in the prior year period.
Admissions and adjusted admissions increased 13.8% and 13.2%,
respectively, during the nine months ended June 30, 2008, compared to
the prior year period. Net patient revenue per adjusted admission for
the nine month period increased 5.2%, compared to the prior year period.
Net patient revenue includes certain supplemental Medicaid reimbursement
totaling $8.7 million for the nine months ended June 30, 2008, compared
to $22.4 million in the prior year period. Excluding the impact of this
supplemental Medicaid reimbursement, net patient revenue per adjusted
admission for the nine month period increased 6.9%, compared to the
prior year period.
On a same-facility basis, admissions and adjusted admissions increased
2.2% and 2.9%, respectively, during the nine months ended June 30, 2008,
while net patient revenue per adjusted admission increased 5.5%,
compared to the prior year period. Excluding the impact of supplemental
Medicaid reimbursement, same-facility net patient revenue per adjusted
admission for the nine month period increased 7.2%, compared to the
prior year period.
On March 25, 2008, IASIS announced that the lease agreements to operate
Mesa General Hospital (“Mesa General”),
located in Mesa, Arizona, and Biltmore Surgery Center (“Biltmore”),
located in Phoenix, Arizona, would expire by their terms on July 31,
2008 and September 30, 2008, respectively. IASIS discontinued services
at Mesa General on May 31, 2008, and Biltmore on April 30, 2008. The
operating results of Mesa General and Biltmore are classified as
discontinued operations in the accompanying consolidated financial
statements for the quarters and nine months ended June 30, 2008 and 2007.
A listen-only simulcast and 30-day replay of IASIS’
third quarter conference call will be available by clicking the “For
Investors” link on the Company’s
website at www.iasishealthcare.com
beginning at 11:00 a.m. Eastern Time on August 12, 2008. A copy of this
press release will also be available on the Company’s
website.
IASIS, located in Franklin, Tennessee, is a leading owner and operator
of medium-sized acute care hospitals in high-growth urban and suburban
markets. The Company operates its hospitals with a strong community
focus by offering and developing healthcare services targeted to the
needs of the markets it serves, promoting strong relationships with
physicians and working with local managed care plans. IASIS owns or
leases 15 acute care hospital facilities and one behavioral health
hospital facility with a total of 2,644 beds in service and has total
annual net revenue of approximately $2.0 billion. These hospital
facilities are located in six regions: Salt Lake City, Utah; Phoenix,
Arizona; Tampa-St. Petersburg, Florida; three cities in Texas, including
San Antonio; Las Vegas, Nevada; and West Monroe, Louisiana. IASIS also
owns and operates a Medicaid and Medicare managed health plan in Phoenix
that serves over 132,000 members. For more information on IASIS, please
visit the Company’s website at www.iasishealthcare.com.
Some of the statements we make in this press release are
forward-looking within the meaning of the federal securities laws, which
are intended to be covered by the safe harbors created thereby. Those
forward-looking statements include all statements that are not
historical statements of fact and those regarding our intent, belief or
expectations including, but not limited to, future financial and
operating results, the Company’s plans,
objectives, expectations and other statements that are not historical
facts. Forward-looking statements involve known and unknown risks
and uncertainties that may cause actual results in future periods to
differ materially from those anticipated in the forward-looking
statements. Those risks and uncertainties include, among others,
the risks and uncertainties related to our ability to generate
sufficient cash to service our existing indebtedness, our substantial
level of indebtedness that could adversely affect our financial
condition, the possibility of an increase in interest rates, which would
increase the cost of servicing our debt and could reduce profitability,
our ability to retain and negotiate favorable contracts with managed
care plans, changes in legislation and regulations that may
significantly reduce government healthcare spending and our revenue and
may require us to make changes to our operations, our hospitals’
competition for patients from other hospitals and healthcare providers,
our hospitals facing a growth in bad debts resulting from increased
self-pay volume and revenue, our ability to recruit and retain quality
physicians, our hospitals’ competition for
staffing which may increase our labor costs and reduce profitability,
our failure to consistently enhance our hospitals with the most recent
technological advances in diagnostic and surgical equipment that would
adversely affect our ability to maintain and expand our markets, our
failure to comply with extensive laws and government regulations, the
possible enactment of legislation that would impose significant
restrictions on hospitals that have physician owners, the potential of
exposure to liability from some of our hospitals being required to
submit to the Department of Health and Human Services information on
their relationships with physicians, expenses incurred in connection
with an appeal of the court order dismissing with prejudice the qui tam
litigation, the possibility that we may become subject to federal and
state investigations in the future, our ability to satisfy regulatory
requirements with respect to our internal controls over financial
reporting under Section 404 of the Sarbanes-Oxley Act of 2002, a failure
of our information systems that would adversely affect our ability to
properly manage our operations, an economic downturn or other material
change in any one of the regions in which we operate, potential
liabilities because of claims brought against our facilities, increasing
insurance costs that may reduce our cash flows and net earnings, the
impact of certain factors, including severe weather conditions and
natural disasters, on our revenue and volume trends at our hospitals,
our ability to control costs at Health Choice Arizona, Inc., the
possibility of Health Choice’s contract with
the AHCCCS being discontinued or experiencing materially reduced
reimbursements, significant competition from other healthcare companies
and state efforts to regulate the sale of not-for-profit hospitals that
may affect our ability to acquire hospitals, difficulties with the
integration of acquisitions that may disrupt our ongoing operations,
difficulties with the opening of our new hospital that may require
unanticipated start-up costs, the significant capital expenditures that
would be involved in the construction of current projects or other new
hospitals that could have an adverse effect on our liquidity, the rising
costs for construction materials and labor that could have an adverse
impact on the return on investment relating to our new hospital and
other expansion projects, state efforts to regulate the construction or
expansion of hospitals that could impair our ability to operate and
expand our operations, our dependence on key personnel, the loss of one
or more of which could have a material adverse effect on our business,
potential responsibilities and costs under environmental laws that could
lead to material expenditures or liability, the possibility of a decline
in the fair value of our reporting units that could result in a material
non-cash charge to earnings and those risks, uncertainties and other
matters detailed in the Company’s Annual
Report on Form 10-K for the fiscal year ended September 30, 2007, and
other filings with the Securities and Exchange Commission.
Although we believe that the assumptions underlying the
forward-looking statements contained in this press release are
reasonable, any of these assumptions could prove to be inaccurate, and,
therefore, there can be no assurance that the forward-looking statements
included in this press release will prove to be accurate. In
light of the significant uncertainties inherent in the forward-looking
statements included herein, you should not regard the inclusion of such
information as a representation by the Company or any other person that
our objectives and plans will be achieved. We undertake no
obligation to publicly release any revisions to any forward-looking
statements contained herein to reflect events and circumstances
occurring after the date hereof or to reflect the occurrence of
unanticipated events.
|
IASIS HEALTHCARE LLC
Consolidated Statements of Operations (Unaudited)
(in thousands)
|
|
|
|
|
|
|
Quarter Ended
June 30,
|
Nine Months Ended
June 30,
|
|
|
|
2008
|
|
|
2007
|
|
|
2008
|
|
|
2007
|
|
|
Net revenue:
|
|
|
|
|
|
Acute care revenue
|
$
|
390,538
|
|
$
|
337,347
|
|
$
|
1,149,295
|
|
$
|
963,872
|
|
|
Premium revenue
|
|
142,022
|
|
|
113,371
|
|
|
400,822
|
|
|
329,949
|
|
|
Total net revenue
|
|
532,560
|
|
|
450,718
|
|
|
1,550,117
|
|
|
1,293,821
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
Salaries and benefits
|
|
159,689
|
|
|
140,583
|
|
|
475,323
|
|
|
388,939
|
|
|
Supplies
|
|
59,907
|
|
|
50,695
|
|
|
177,124
|
|
|
143,107
|
|
|
Medical claims
|
|
119,190
|
|
|
95,116
|
|
|
333,652
|
|
|
277,515
|
|
|
Other operating expenses
|
|
75,124
|
|
|
71,285
|
|
|
209,117
|
|
|
198,413
|
|
|
Provision for bad debts
|
|
40,032
|
|
|
32,267
|
|
|
120,839
|
|
|
94,843
|
|
|
Rentals and leases
|
|
9,277
|
|
|
7,479
|
|
|
27,198
|
|
|
22,959
|
|
|
Interest expense, net
|
|
17,616
|
|
|
17,203
|
|
|
58,460
|
|
|
50,153
|
|
|
Depreciation and amortization
|
|
24,704
|
|
|
19,196
|
|
|
71,143
|
|
|
53,163
|
|
|
Management fees
|
|
994
|
|
|
721
|
|
|
2,606
|
|
|
2,024
|
|
|
Loss on extinguishment of debt
|
|
–
|
|
|
6,229
|
|
|
–
|
|
|
6,229
|
|
|
Business interruption insurance recoveries
|
|
–
|
|
|
(1,525
|
)
|
|
–
|
|
|
(3,443
|
)
|
|
Total costs and expenses
|
|
506,533
|
|
|
439,249
|
|
|
1,475,462
|
|
|
1,233,902
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before gain (loss) on disposal
of assets, minority interests and income taxes
|
|
26,027
|
|
|
11,469
|
|
|
74,655
|
|
|
59,919
|
|
|
Gain (loss) on disposal of assets, net
|
|
(39
|
)
|
|
70
|
|
|
20
|
|
|
(1,237
|
)
|
|
Minority interests
|
|
(1,239
|
)
|
|
(1,308
|
)
|
|
(3,108
|
)
|
|
(4,162
|
)
|
|
|
|
|
|
|
|
Earnings from continuing operations before income taxes
|
|
24,749
|
|
|
10,231
|
|
|
71,567
|
|
|
54,520
|
|
|
Income tax expense
|
|
9,979
|
|
|
3,408
|
|
|
28,731
|
|
|
20,899
|
|
|
|
|
|
|
|
|
Net earnings from continuing operations
|
|
14,770
|
|
|
6,823
|
|
|
42,836
|
|
|
33,621
|
|
|
Earnings (loss) from discontinued operations, net of income taxes
|
|
(4,406
|
)
|
|
(515
|
)
|
|
(7,041
|
)
|
|
225
|
|
|
|
|
|
|
|
|
Net earnings
|
$
|
10,364
|
|
$
|
6,308
|
|
$
|
35,795
|
|
$
|
33,846
|
|
|
IASIS HEALTHCARE LLC
Consolidated Balance Sheets
(in thousands)
|
|
|
|
|
|
|
|
June 30, 2008
|
|
Sept. 30,
2007
|
|
|
(Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
$
|
1,334
|
|
$
|
–
|
|
Accounts receivable, net
|
|
245,662
|
|
|
248,281
|
|
Inventories
|
|
46,062
|
|
|
43,697
|
|
Deferred income taxes
|
|
32,580
|
|
|
29,629
|
|
Prepaid expenses and other current assets
|
|
77,143
|
|
|
45,023
|
|
Total current assets
|
|
402,781
|
|
|
366,630
|
|
|
|
|
|
|
Property and equipment, net
|
|
989,272
|
|
|
980,437
|
|
Goodwill
|
|
779,445
|
|
|
756,593
|
|
Other intangible assets, net
|
|
33,750
|
|
|
36,000
|
|
Other assets, net
|
|
42,089
|
|
|
46,762
|
|
Total assets
|
$
|
2,247,337
|
|
$
|
2,186,422
|
|
|
|
|
|
|
LIABILITIES AND MEMBER’S EQUITY
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
$
|
70,070
|
|
$
|
98,488
|
|
Salaries and benefits payable
|
|
38,348
|
|
|
40,124
|
|
Accrued interest payable
|
|
1,954
|
|
|
18,865
|
|
Medical claims payable
|
|
90,432
|
|
|
81,309
|
|
Other accrued expenses and other current liabilities
|
|
51,134
|
|
|
44,276
|
|
Current portion of long-term debt and capital lease obligations
|
|
6,854
|
|
|
8,036
|
|
Total current liabilities
|
|
258,792
|
|
|
291,098
|
|
|
|
|
|
|
Long-term debt and capital lease obligations
|
|
1,062,214
|
|
|
1,023,621
|
|
Deferred income taxes
|
|
94,619
|
|
|
93,402
|
|
Other long-term liabilities
|
|
51,611
|
|
|
50,831
|
|
Minority interests
|
|
52,851
|
|
|
35,956
|
|
|
|
|
|
|
Member’s equity
|
|
727,250
|
|
|
691,514
|
|
Total liabilities and member’s equity
|
$
|
2,247,337
|
|
$
|
2,186,422
|
|
IASIS HEALTHCARE LLC
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
|
|
|
|
|
|
|
|
Nine Months Ended
June 30,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
Cash flows from operating activities:
|
|
|
|
|
Net earnings
|
|
$
|
35,795
|
|
$
|
33,846
|
|
|
Adjustments to reconcile net earnings to net cash provided by
operating activities:
|
|
|
|
|
Loss (earnings) from discontinued operations
|
|
|
7,041
|
|
|
(225
|
)
|
|
Depreciation and amortization
|
|
|
71,143
|
|
|
53,163
|
|
|
Amortization of loan costs
|
|
|
2,173
|
|
|
2,227
|
|
|
Minority interests
|
|
|
3,108
|
|
|
4,162
|
|
|
Deferred income taxes
|
|
|
11,588
|
|
|
17,212
|
|
|
Loss (gain) on disposal of assets, net
|
|
|
(20
|
)
|
|
1,237
|
|
|
Loss on extinguishment of debt
|
|
|
–
|
|
|
5,091
|
|
|
Changes in operating assets and liabilities, net of the effect of
acquisitions and dispositions:
|
|
|
|
|
Accounts receivable, net
|
|
|
(967
|
)
|
|
(30,961
|
)
|
|
Inventories, prepaid expenses and other current assets
|
|
|
(34,117
|
)
|
|
(11,280
|
)
|
|
Accounts payable, other accrued expenses and other accrued
liabilities
|
|
|
(36,449
|
)
|
|
1,997
|
|
|
Net cash provided by operating activities –
continuing operations
|
|
|
59,295
|
|
|
76,469
|
|
|
Net cash provided by (used in) operating activities –
discontinued operations
|
|
|
(125
|
)
|
|
2,570
|
|
|
Net cash provided by operating activities
|
|
|
59,170
|
|
|
79,039
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
Purchases of property and equipment, net
|
|
|
(87,705
|
)
|
|
(149,894
|
)
|
|
Cash paid for acquisitions, net
|
|
|
(16,668
|
)
|
|
(139,832
|
)
|
|
Proceeds from sale of assets
|
|
|
353
|
|
|
986
|
|
|
Change in other assets, net
|
|
|
2,869
|
|
|
4,085
|
|
|
Net cash used in investing activities –
continuing operations
|
|
|
(101,151
|
)
|
|
(284,655
|
)
|
|
Net cash used in investing activities –
discontinued operations
|
|
|
(899
|
)
|
|
(601
|
)
|
|
Net cash used in investing activities
|
|
|
(102,050
|
)
|
|
(285,256
|
)
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
Payment of debt and capital lease obligations
|
|
|
(304,587
|
)
|
|
(610,804
|
)
|
|
Proceeds from debt borrowings
|
|
|
337,200
|
|
|
740,300
|
|
|
Debt financing costs incurred
|
|
|
–
|
|
|
(7,890
|
)
|
|
Distribution to parent for debt financing costs
|
|
|
–
|
|
|
(6,586
|
)
|
|
Distribution of minority interests
|
|
|
(3,743
|
)
|
|
(3,387
|
)
|
|
Proceeds from sale of partnership interests, net
|
|
|
15,648
|
|
|
4
|
|
|
Net cash provided by financing activities –
continuing operations
|
|
|
44,518
|
|
|
111,637
|
|
|
Net cash used in financing activities –
discontinued operations
|
|
|
(304
|
)
|
|
(359
|
)
|
|
Net cash provided by financing activities
|
|
|
44,214
|
|
|
111,278
|
|
|
|
|
|
|
|
Change in cash and cash equivalents
|
|
|
1,334
|
|
|
(94,939
|
)
|
|
Cash and cash equivalents at beginning of period
|
|
|
–
|
|
|
95,415
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
1,334
|
|
$
|
476
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
Cash paid for interest
|
|
$
|
75,911
|
|
$
|
70,140
|
|
|
Cash paid (received) for income taxes, net
|
|
$
|
(3,286
|
)
|
$
|
7,254
|
|
|
Cash paid in loss on extinguishment of debt
|
|
$
|
–
|
|
$
|
1,138
|
|
|
IASIS HEALTHCARE LLC
Segment Information (Unaudited)
(in thousands)
|
|
|
|
|
|
|
|
For the Quarter Ended June 30, 2008
|
|
|
|
Acute Care
|
|
Health Choice
|
|
Eliminations
|
|
Consolidated
|
|
Acute care revenue
|
|
$
|
390,538
|
|
|
$
|
–
|
|
$
|
–
|
|
|
$
|
390,538
|
|
|
Premium revenue
|
|
|
–
|
|
|
|
142,022
|
|
|
–
|
|
|
|
142,022
|
|
|
Revenue between segments
|
|
|
2,591
|
|
|
|
–
|
|
|
(2,591
|
)
|
|
|
–
|
|
|
Net revenue
|
|
|
393,129
|
|
|
|
142,022
|
|
|
(2,591
|
)
|
|
|
532,560
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits
|
|
|
155,221
|
|
|
|
4,468
|
|
|
–
|
|
|
|
159,689
|
|
|
Supplies
|
|
|
59,847
|
|
|
|
60
|
|
|
–
|
|
|
|
59,907
|
|
|
Medical claims
|
|
|
–
|
|
|
|
121,781
|
|
|
(2,591
|
)
|
|
|
119,190
|
|
|
Other operating expenses
|
|
|
70,490
|
|
|
|
4,634
|
|
|
–
|
|
|
|
75,124
|
|
|
Provision for bad debts
|
|
|
40,032
|
|
|
|
–
|
|
|
–
|
|
|
|
40,032
|
|
|
Rentals and leases
|
|
|
8,964
|
|
|
|
313
|
|
|
–
|
|
|
|
9,277
|
|
|
Adjusted EBITDA (1)
|
|
|
58,575
|
|
|
|
10,766
|
|
|
–
|
|
|
|
69,341
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
17,616
|
|
|
|
–
|
|
|
–
|
|
|
|
17,616
|
|
|
Depreciation and amortization
|
|
|
23,780
|
|
|
|
924
|
|
|
–
|
|
|
|
24,704
|
|
|
Management fees
|
|
|
994
|
|
|
|
–
|
|
|
–
|
|
|
|
994
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before loss on disposal of
assets, minority interests and income taxes
|
|
|
16,185
|
|
|
|
9,842
|
|
|
–
|
|
|
|
26,027
|
|
|
Loss on disposal of assets, net
|
|
|
(39
|
)
|
|
|
–
|
|
|
–
|
|
|
|
(39
|
)
|
|
Minority interests
|
|
|
(1,239
|
)
|
|
|
–
|
|
|
–
|
|
|
|
(1,239
|
)
|
|
Earnings from continuing operations before income taxes
|
|
$
|
14,907
|
|
|
$
|
9,842
|
|
$
|
–
|
|
|
$
|
24,749
|
|
|
|
For the Quarter Ended June 30, 2007
|
|
|
Acute Care
|
|
Health Choice
|
|
Eliminations
|
|
Consolidated
|
|
Acute care revenue
|
$
|
337,347
|
|
|
$
|
–
|
|
$
|
–
|
|
|
$
|
337,347
|
|
|
Premium revenue
|
|
–
|
|
|
|
113,371
|
|
|
–
|
|
|
|
113,371
|
|
|
Revenue between segments
|
|
1,826
|
|
|
|
–
|
|
|
(1,826
|
)
|
|
|
–
|
|
|
Net revenue
|
|
339,173
|
|
|
|
113,371
|
|
|
(1,826
|
)
|
|
|
450,718
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits
|
|
136,730
|
|
|
|
3,853
|
|
|
–
|
|
|
|
140,583
|
|
|
Supplies
|
|
50,636
|
|
|
|
59
|
|
|
–
|
|
|
|
50,695
|
|
|
Medical claims
|
|
–
|
|
|
|
96,942
|
|
|
(1,826
|
)
|
|
|
95,116
|
|
|
Other operating expenses
|
|
67,398
|
|
|
|
3,887
|
|
|
–
|
|
|
|
71,285
|
|
|
Provision for bad debts
|
|
32,267
|
|
|
|
–
|
|
|
–
|
|
|
|
32,267
|
|
|
Rentals and leases
|
|
7,139
|
|
|
|
340
|
|
|
–
|
|
|
|
7,479
|
|
|
Business interruption insurance recoveries
|
|
(1,525
|
)
|
|
|
–
|
|
|
–
|
|
|
|
(1,525
|
)
|
|
Adjusted EBITDA (1)
|
|
46,528
|
|
|
|
8,290
|
|
|
–
|
|
|
|
54,818
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
17,203
|
|
|
|
–
|
|
|
–
|
|
|
|
17,203
|
|
|
Depreciation and amortization
|
|
18,307
|
|
|
|
889
|
|
|
–
|
|
|
|
19,196
|
|
|
Loss on extinguishment of debt
|
|
6,229
|
|
|
|
–
|
|
|
–
|
|
|
|
6,229
|
|
|
Management fees
|
|
721
|
|
|
|
–
|
|
|
–
|
|
|
|
721
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before gain on disposal of
assets, minority interests and income taxes
|
|
4,068
|
|
|
|
7,401
|
|
|
–
|
|
|
|
11,469
|
|
|
Gain on disposal of assets, net
|
|
70
|
|
|
|
–
|
|
|
–
|
|
|
|
70
|
|
|
Minority interests
|
|
(1,308
|
)
|
|
|
–
|
|
|
–
|
|
|
|
(1,308
|
)
|
|
Earnings from continuing operations before income taxes
|
$
|
2,830
|
|
|
$
|
7,401
|
|
$
|
–
|
|
|
$
|
10,231
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Adjusted EBITDA represents net
earnings from continuing operations before interest expense,
income tax expense, depreciation and amortization, loss on
extinguishment of debt, gain (loss) on disposal of assets,
minority interests and management fees. Management fees represent
monitoring and advisory fees paid to TPG, the Company’s
majority financial sponsor, and certain other members of IASIS
Investment LLC. Management routinely calculates and communicates
adjusted EBITDA and believes that it is useful to investors
because it is commonly used as an analytical indicator within the
healthcare industry to evaluate hospital performance, allocate
resources and measure leverage capacity and debt service
ability. In addition, the Company uses adjusted EBITDA as a
measure of performance for its business segments and for incentive
compensation purposes. Adjusted EBITDA should not be considered
as a measure of financial performance under generally accepted
accounting principles (“GAAP”),
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 earnings, 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. Adjusted EBITDA, as presented, differs from what is
defined under the Company’s senior
secured credit facilities and may not be comparable to similarly
titled measures of other companies.
|
|
IASIS HEALTHCARE LLC
Segment Information (Unaudited)
(in thousands)
|
|
|
|
|
|
|
|
For the Nine Months Ended June 30, 2008
|
|
|
|
Acute Care
|
|
Health Choice
|
|
Eliminations
|
|
Consolidated
|
|
Acute care revenue
|
|
$
|
1,149,295
|
|
|
$
|
–
|
|
$
|
–
|
|
|
$
|
1,149,295
|
|
|
Premium revenue
|
|
|
–
|
|
|
|
400,822
|
|
|
–
|
|
|
|
400,822
|
|
|
Revenue between segments
|
|
|
7,270
|
|
|
|
–
|
|
|
(7,270
|
)
|
|
|
–
|
|
|
Net revenue
|
|
|
1,156,565
|
|
|
|
400,822
|
|
|
(7,270
|
)
|
|
|
1,550,117
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits
|
|
|
462,479
|
|
|
|
12,844
|
|
|
–
|
|
|
|
475,323
|
|
|
Supplies
|
|
|
176,943
|
|
|
|
181
|
|
|
–
|
|
|
|
177,124
|
|
|
Medical claims
|
|
|
–
|
|
|
|
340,922
|
|
|
(7,270
|
)
|
|
|
333,652
|
|
|
Other operating expenses
|
|
|
195,672
|
|
|
|
13,445
|
|
|
–
|
|
|
|
209,117
|
|
|
Provision for bad debts
|
|
|
120,839
|
|
|
|
–
|
|
|
–
|
|
|
|
120,839
|
|
|
Rentals and leases
|
|
|
26,311
|
|
|
|
887
|
|
|
–
|
|
|
|
27,198
|
|
|
Adjusted EBITDA (1)
|
|
|
174,321
|
|
|
|
32,543
|
|
|
–
|
|
|
|
206,864
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
58,460
|
|
|
|
–
|
|
|
–
|
|
|
|
58,460
|
|
|
Depreciation and amortization
|
|
|
68,425
|
|
|
|
2,718
|
|
|
–
|
|
|
|
71,143
|
|
|
Management fees
|
|
|
2,606
|
|
|
|
–
|
|
|
–
|
|
|
|
2,606
|
|
|
Earnings from continuing operations before gain on
disposal of assets, minority interests and income taxes
|
|
|
44,830
|
|
|
|
29,825
|
|
|
–
|
|
|
|
74,655
|
|
|
Gain on disposal of assets, net
|
|
|
20
|
|
|
|
–
|
|
|
–
|
|
|
|
20
|
|
|
Minority interests
|
|
|
(3,108
|
)
|
|
|
–
|
|
|
–
|
|
|
|
(3,108
|
)
|
|
Earnings from continuing operations before income taxes
|
|
$
|
41,742
|
|
|
$
|
29,825
|
|
$
|
–
|
|
|
$
|
71,567
|
|
|
Segment assets
|
|
$
|
2,068,423
|
|
|
$
|
178,914
|
|
|
|
$
|
2,247,337
|
|
|
Capital expenditures – continuing
operations
|
|
$
|
87,425
|
|
|
$
|
280
|
|
|
|
$
|
87,705
|
|
|
Goodwill
|
|
$
|
773,688
|
|
|
$
|
5,757
|
|
|
|
$
|
779,445
|
|
|
|
|
For the Nine Months Ended June 30, 2007
|
|
|
|
Acute Care
|
|
Health Choice
|
|
Eliminations
|
|
Consolidated
|
|
Acute care revenue
|
|
$
|
963,872
|
|
|
$
|
–
|
|
$
|
–
|
|
|
$
|
963,872
|
|
|
Premium revenue
|
|
|
–
|
|
|
|
329,949
|
|
|
–
|
|
|
|
329,949
|
|
|
Revenue between segments
|
|
|
5,431
|
|
|
|
–
|
|
|
(5,431
|
)
|
|
|
–
|
|
|
Net revenue
|
|
|
969,303
|
|
|
|
329,949
|
|
|
(5,431
|
)
|
|
|
1,293,821
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits
|
|
|
378,051
|
|
|
|
10,888
|
|
|
–
|
|
|
|
388,939
|
|
|
Supplies
|
|
|
142,880
|
|
|
|
227
|
|
|
–
|
|
|
|
143,107
|
|
|
Medical claims
|
|
|
–
|
|
|
|
282,946
|
|
|
(5,431
|
)
|
|
|
277,515
|
|
|
Other operating expenses
|
|
|
186,929
|
|
|
|
11,484
|
|
|
–
|
|
|
|
198,413
|
|
|
Provision for bad debts
|
|
|
94,843
|
|
|
|
–
|
|
|
–
|
|
|
|
94,843
|
|
|
Rentals and leases
|
|
|
22,093
|
|
|
|
866
|
|
|
–
|
|
|
|
22,959
|
|
|
Business interruption insurance recoveries
|
|
|
(3,443
|
)
|
|
|
–
|
|
|
–
|
|
|
|
(3,443
|
)
|
|
Adjusted EBITDA (1)
|
|
|
147,950
|
|
|
|
23,538
|
|
|
–
|
|
|
|
171,488
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
50,153
|
|
|
|
–
|
|
|
–
|
|
|
|
50,153
|
|
|
Depreciation and amortization
|
|
|
50,499
|
|
|
|
2,664
|
|
|
–
|
|
|
|
53,163
|
|
|
Loss on extinguishment of debt
|
|
|
6,229
|
|
|
|
–
|
|
|
–
|
|
|
|
6,229
|
|
|
Management fees
|
|
|
2,024
|
|
|
|
–
|
|
|
–
|
|
|
|
2,024
|
|
|
Earnings from continuing operations before loss on
disposal of assets, minority interests and income taxes
|
|
|
39,045
|
|
|
|
20,874
|
|
|
–
|
|
|
|
59,919
|
|
|
Loss on disposal of assets, net
|
|
|
(1,237
|
)
|
|
|
–
|
|
|
–
|
|
|
|
(1,237
|
)
|
|
Minority interests
|
|
|
(4,162
|
)
|
|
|
–
|
|
|
–
|
|
|
|
(4,162
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before income taxes
|
|
$
|
33,646
|
|
|
$
|
20,874
|
|
$
|
–
|
|
|
$
|
54,520
|
|
|
Segment assets
|
|
$
|
1,993,320
|
|
|
$
|
147,210
|
|
|
|
$
|
2,140,530
|
|
|
Capital expenditures – continuing
operations
|
|
$
|
149,563
|
|
|
$
|
331
|
|
|
|
$
|
149,894
|
|
|
Goodwill
|
|
$
|
750,722
|
|
|
$
|
5,757
|
|
|
|
$
|
756,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Adjusted EBITDA
represents net earnings from continuing operations before interest
expense, income tax expense, depreciation and amortization, loss
on extinguishment of debt, gain (loss) on disposal of assets,
minority interests and management fees. Management fees represent
monitoring and advisory fees paid to TPG, the Company’s
majority financial sponsor, and certain other members of IASIS
Investment LLC. Management routinely calculates and communicates
adjusted EBITDA and believes that it is useful to investors
because it is commonly used as an analytical indicator within the
healthcare industry to evaluate hospital performance, allocate
resources and measure leverage capacity and debt service
ability. In addition, the Company uses adjusted EBITDA as a
measure of performance for its business segments and for incentive
compensation purposes. Adjusted EBITDA should not be considered
as a measure of financial performance under GAAP, 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 earnings, 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. Adjusted EBITDA, as
presented, differs from what is defined under the Company’s
senior secured credit facilities and may not be comparable to
similarly titled measures of other companies.
|
|
IASIS HEALTHCARE LLC
Consolidated Financial and Operating Data (Unaudited)
|
|
|
|
|
|
|
Quarter Ended
June 30,
|
Nine Months Ended
June 30,
|
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
|
Consolidated Hospital Facilities (1)
|
|
|
|
|
|
Number of hospital facilities at end of period
|
15
|
|
14
|
|
15
|
|
14
|
|
|
Beds in service at end of period
|
2,644
|
|
2,391
|
|
2,644
|
|
2,391
|
|
|
Average length of stay (days)
|
4.69
|
|
4.66
|
|
4.70
|
|
4.66
|
|
|
Occupancy rates (average beds in service)
|
48.8
|
%
|
50.2
|
%
|
50.1
|
%
|
51.5
|
%
|
|
Admissions
|
25,004
|
|
23,125
|
|
76,883
|
|
67,557
|
|
|
Percentage change
|
8.1
|
%
|
|
13.8
|
%
|
|
|
Adjusted admissions
|
41,371
|
|
37,974
|
|
124,667
|
|
110,158
|
|
|
Percentage change
|
8.9
|
%
|
|
13.2
|
%
|
|
|
Patient days
|
117,304
|
|
107,683
|
|
361,372
|
|
314,747
|
|
|
Adjusted patient days
|
186,242
|
|
169,313
|
|
562,959
|
|
491,641
|
|
|
Outpatient revenue as a % of gross patient revenue
|
37.8
|
%
|
36.7
|
%
|
36.2
|
%
|
36.1
|
%
|
|
|
|
|
|
|
|
Same-Facility (2)
|
|
|
|
|
|
Number of hospital facilities at end of period
|
14
|
|
14
|
|
13
|
|
13
|
|
|
Beds in service at end of period
|
2,466
|
|
2,391
|
|
2,238
|
|
2,154
|
|
|
Average length of stay (days)
|
4.75
|
|
4.66
|
|
4.69
|
|
4.64
|
|
|
Occupancy rates (average beds in service)
|
49.2
|
%
|
50.1
|
%
|
50.1
|
%
|
51.9
|
%
|
|
Admissions
|
23,223
|
|
23,125
|
|
65,114
|
|
63,729
|
|
|
Percentage change
|
0.4
|
%
|
|
2.2
|
%
|
|
|
Adjusted admissions
|
38,903
|
|
37,974
|
|
107,792
|
|
104,779
|
|
|
Percentage change
|
2.4
|
%
|
|
2.9
|
%
|
|
|
Patient days
|
110,309
|
|
107,683
|
|
305,445
|
|
295,816
|
|
|
Adjusted patient days
|
176,528
|
|
169,313
|
|
482,262
|
|
465,039
|
|
|
Outpatient revenue as a % of gross patient revenue
|
38.7
|
%
|
36.7
|
%
|
37.2
|
%
|
36.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(1) Represents continuing
operations, which excludes Mesa General.
|
|
(2) Includes hospital facilities owned
and operated for each period presented in its entirety. Includes
the effect of the Alliance Hospital acquisition completed on May
31, 2007. Upon acquisition, Alliance Hospital was immediately
merged into Odessa Regional Hospital to form Odessa Regional
Medical Center.
|
|
IASIS HEALTHCARE LLC
Supplemental Consolidated Statements of Operations Information
(Unaudited)
(in thousands)
|
|
|
|
|
|
|
|
Quarter Ended
June 30,
|
|
Nine Months Ended
June 30,
|
|
|
|
2008
|
|
|
2007
|
|
|
|
2008
|
|
|
|
2007
|
|
Consolidated Results
|
|
|
|
|
|
|
|
|
Net earnings from continuing operations
|
$
|
14,770
|
|
$
|
6,823
|
|
|
$
|
42,836
|
|
|
$
|
33,621
|
|
Add:
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
17,616
|
|
|
17,203
|
|
|
|
58,460
|
|
|
|
50,153
|
|
Income tax expense
|
|
9,979
|
|
|
3,408
|
|
|
|
28,731
|
|
|
|
20,899
|
|
Depreciation and amortization
|
|
24,704
|
|
|
19,196
|
|
|
|
71,143
|
|
|
|
53,163
|
|
Loss on extinguishment of debt
|
|
–
|
|
|
6,229
|
|
|
|
–
|
|
|
|
6,229
|
|
Loss (gain) on disposal of assets, net
|
|
39
|
|
|
(70
|
)
|
|
|
(20
|
)
|
|
|
1,237
|
|
Minority interests
|
|
1,239
|
|
|
1,308
|
|
|
|
3,108
|
|
|
|
4,162
|
|
Management fees
|
|
994
|
|
|
721
|
|
|
|
2,606
|
|
|
|
2,024
|
|
Adjusted EBITDA (1)
|
$
|
69,341
|
|
$
|
54,818
|
|
|
$
|
206,864
|
|
|
$
|
171,488
|
|
|
|
|
|
|
|
|
|
|
(1) Adjusted EBITDA represents net
earnings from continuing operations before interest expense,
income tax expense, depreciation and amortization, loss on
extinguishment of debt, loss (gain) on disposal of assets,
minority interests and management fees. Management fees represent
monitoring and advisory fees paid to TPG, the Company’s
majority financial sponsor, and certain other members of IASIS
Investment LLC. Management routinely calculates and communicates
adjusted EBITDA and believes that it is useful to investors
because it is commonly used as an analytical indicator within the
healthcare industry to evaluate hospital performance, allocate
resources and measure leverage capacity and debt service
ability. In addition, the Company uses adjusted EBITDA as a
measure of performance for its business segments and for incentive
compensation purposes. Adjusted EBITDA should not be considered
as a measure of financial performance under GAAP, 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 earnings, 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. Adjusted EBITDA, as
presented, differs from what is defined under the Company’s
senior secured credit facilities and may not be comparable to
similarly titled measures of other companies.
|
IASIS Healthcare LLC
Investor contact:
W. Carl Whitmer,
615-844-2747
Chief Financial Officer
or
News media
contact:
Tomi Galin, 615-467-1255
Vice-President,
Marketing & Communications
