NAPLES, Fla., Feb 16, 2011 --
Health Management Associates, Inc. (NYSE: HMA) today announced its consolidated financial results for the fourth quarter and year ended December 31, 2010.
Key metrics from continuing operations for the fourth quarter (all percentage changes compare the fourth quarter of 2010 to the fourth quarter of 2009 unless otherwise noted) include:
- Diluted earnings per share ("EPS") increased 23.1% to $0.16;
- Revenue increased 14.1% to $1,352.1 million;
- Income From Continuing Operations increased 26.0% to $46.4 million;
- Adjusted EBITDA increased 9.6% to $186.5 million;
- Admissions increased 8.3% while adjusted admissions increased 12.6%;
- Same hospital net revenue increased 2.1% to $1,209.7 million;
- Same hospital Adjusted EBITDA increased 5.0% to $209.6 million, resulting in a 40 basis point improvement in margin, to 17.3%;
- Same hospital surgeries increased 5.2% percent; and
- Same hospital admissions declined 3.1% while same hospital adjusted admissions increased 0.1%.
The tables accompanying this press release include a reconciliation of consolidated net income to all presentations of Adjusted EBITDA (which is not a GAAP measure) contained in this press release. Those tables also contain disclaimers and other important information regarding how Health Management defines and uses Adjusted EBITDA.
For continuing operations at hospitals owned and operated by Health Management for one year or more, referred to as same hospital continuing operations, net revenue increased $25.1 million or 2.1% to $1,209.7 million compared to the prior year's fourth quarter. Adjusted EBITDA from same hospital continuing operations grew 5.0% to $209.6 million, representing 17.3% of net revenue, as compared to $199.6 million and 16.9% of net revenue for the same quarter a year ago. A 5.2% increase in same hospital surgeries contributed to this net revenue and Adjusted EBITDA growth. Primarily due to declines in uninsured admissions and H1N1 flu cases, admissions from same hospital continuing operations were 3.1% lower than the same period a year ago and adjusted admissions were essentially flat compared to the prior year's fourth quarter. This compares to increases of 1.6% in admissions and 4.0% in adjusted admissions from same hospital continuing operations for the fourth quarter ended December 31, 2009.
"We are very pleased to report another great quarter which exceeded our expectations and contributed to a record setting year for Health Management in 2010," said Gary D. Newsome, Health Management's President and Chief Executive Officer. "We strongly believe that our continued and relentless focus on cost discipline, emergency room operations, physician recruitment and market service development were the key factors that enabled us to achieve another year of outstanding results. Heading into 2011, we plan to continue our disciplined approach to hospital acquisitions and joint ventures, and remain what we believe to be the only pure player in the non-urban sector."
Health Management's provision for doubtful accounts, or bad debt expense, was $164.6 million, or 12.2% of net revenue, for the fourth quarter compared to $145.4 million, or 12.3% of net revenue, for the same quarter a year ago.
Uninsured discounts for the fourth quarter were $210.2 million, compared to $160.8 million for the same quarter a year ago. Charity/indigent care write-offs for the quarter were $24.2 million, compared to $22.1 million for the same quarter a year ago. The sum of uninsured discounts, charity/indigent write-offs and bad debt expense, as a percent of the sum of net revenue, uninsured discounts and charity/indigent write-offs (which Health Management refers to as the Uncompensated Patient Care Percentage) was 25.1% for the fourth quarter compared to 24.0% for the fourth quarter a year ago. Health Management believes that its Uncompensated Patient Care Percentage provides key information regarding the aggregate level of patient care for which it does not receive remuneration.
Cash flow from continuing operating activities for the year ended December 31, 2010 was $437.1 million, after cash interest and cash tax payments aggregating $276.7 million. Health Management's total leverage ratio and interest coverage ratio were 4.14 and 3.40, respectively, at December 31, 2010. These ratios are well within the requirements of Health Management's credit facilities.
Effective December 31, 2010, Health Management sold the 140-bed Riley Hospital, located in Meridian, Mississippi and as a result, the hospital has been placed in discontinued operations and prior periods have been reclassified. The loss from discontinued operations of $0.05 per diluted share for the three and twelve months ended December 31, 2010 is primarily due to the loss on the sale of the hospital and an impairment charge related to assets held for sale.
For continuing operations, Health Management reported net revenue of $5,115.0 million and Adjusted EBITDA of $734.9 million for the year ended December 31, 2010, a 12.2% and 8.3% increase, respectively, compared to the prior year. Income from continuing operations for the year grew 15.6% to $186.0 million and EPS from continuing operations grew 18.2% to $0.65 compared to the year ended December 31, 2009.
Health Management also reiterated its 2011 earnings objective of income from continuing operations attributable to Health Management Associates, Inc. of between $0.72 and $0.76 per diluted share. This objective range does not include any benefit from potential 2011 acquisitions.
"We believe that our operational initiatives and cost controls will continue to help us improve our operating results in 2011. Moreover, we anticipate that another successful year of hospital acquisitions will complement our operational efforts," added Newsome. "Since December 2009, when Health Management began to again diligently pursue the acquisition portion of our growth strategy, we have acquired six hospitals representing approximately $650 million of annual revenue, or nearly 14% of our 2010 base revenue. Our acquisition pipeline is currently very active, and we expect to complete additional acquisitions in 2011 as we continue to see attractive assets at attractive valuations. We believe the earnings potential is compelling, and we intend to remain disciplined in our approach, and continue to believe that these acquisition opportunities offer us a growth catalyst to add significant value to our company."
Health Management's executive team will hold a conference call and webcast to discuss the contents of this press release and Health Management's consolidated financial results for the fourth quarter and year ended December 31, 2010 on Thursday, February 17, 2011 at 11:00 a.m. ET. Investors are invited to access the webcast via Health Management's website at www.HMA.com or via www.streetevents.com. Alternatively, investors may join the conference call by dialing 877-476-3476.
Health Management will archive a copy of the audio webcast of the conference call, along with any related information that Health Management may be required to provide pursuant to Securities and Exchange Commission rules, on its website under the heading "Investor Relations," for a period of 60 days following the conference call.
Health Management enables America's best local health care by providing the people, processes, capital and expertise necessary for its hospital and physician partners to fulfill their local missions of delivering superior health care services. Health Management, through its subsidiaries, owns and operates 59 hospitals, with approximately 8,900 licensed beds, in non-urban communities located throughout the United States. All references to "HMA", "Health Management," the "Company", "we", "us" or "our" used in this release refer to Health Management Associates, Inc. and its affiliates.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to risks, uncertainties and assumptions and are identified by words such as "expects," "estimates," "projects," "anticipates," "believes," "could" and other similar words. All statements addressing operating performance, events or developments that Health Management Associates, Inc. expects or anticipates will occur in the future, including but not limited to projections of revenue, income or loss, capital expenditures, earnings per share, debt structure, bad debt expense, capital structure, repayment of indebtedness, other financial items, statements regarding the plans and objectives of management for future operations, statements regarding acquisitions, divestitures and other proposed or contemplated transactions (including but not limited to statements regarding the potential for future acquisitions and perceived benefits of acquisitions), statements of future economic performance, statements of the assumptions underlying or relating to any of the foregoing statements, and other statements which are other than statements of historical fact, are considered to be "forward-looking statements."
Because they are forward-looking, such statements should be evaluated in light of important risk factors and uncertainties. These risk factors and uncertainties are more fully described in Health Management Associates, Inc.'s most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Forms 10-Q under the heading entitled "Risk Factors." Should one or more of these risks or uncertainties materialize, or should any of Health Management Associates, Inc.'s underlying assumptions prove incorrect, actual results could vary materially from those currently anticipated. In addition, undue reliance should not be placed on Health Management Associates, Inc.'s forward-looking statements. Except as required by law, Health Management Associates, Inc. disclaims any obligation to update or publicly announce any revisions to any of the forward-looking statements contained in this press release.