LifePoint Hospitals Reports Second Quarter 2013 Results
LifePoint Hospitals, Inc. (NASDAQ: LPNT) today announced results for the second quarter and six months ended June 30, 2013.
For the second quarter ended June 30, 2013, revenues from continuing operations were $894.9 million, up 8.2% from $827.3 million for the same period a year ago. Income from continuing operations attributable to LifePoint Hospitals, Inc. stockholders for the second quarter ended June 30, 2013, decreased 32.6% to $27.1 million, or $0.57 per diluted share, compared with $40.2 million, or $0.83 per diluted share, for the same period a year ago.
For the first half of 2013, revenues from continuing operations were $1,826.0 million, up 8.8% from $1,678.3 million for the same period a year ago. Income from continuing operations attributable to LifePoint Hospitals, Inc. stockholders for the first half of 2013, decreased 38.3% to $59.4 million, or $1.25 per diluted share, compared with $96.2 million, or $1.99 per diluted share, for the same period last year.
In commenting on the results, William F. Carpenter III, chairman and chief executive officer of LifePoint Hospitals, said, “We continue to position LifePoint to benefit from healthcare reform in a challenging operating environment. Our growth and quality initiatives drove sequential improvements in outpatient and inpatient volumes this quarter, while our M&A program allowed us to build out our networks in several key regions. As we look ahead to the remainder of 2013, our strong balance sheet and solid cash flow will provide us with the flexibility to keep investing in our business, pursuing strategic acquisitions and returning value to shareholders.”
The Company reaffirms its previously issued revenues guidance at $3.65 billion to $3.75 billion for the year and issues the following revised guidance for 2013:
During the three months ended June 30, 2013, the Company recognized a net reduction to revenues of approximately $4.8 million, or $0.06 per diluted share, as a result of recent reimbursement changes under the Sole Community Provider Program in the state of New Mexico (the “New Mexico SCPP”). This is in comparison to approximately $9.9 million, or $0.13 per diluted share, recognized during the same period of the prior year and approximately $7.0 million, or $0.09 per diluted share, in accordance with the Company’s second quarter of 2013 financial plan. Consistent with its original guidance for 2013, the Company expects to recognize approximately $7.0 million per quarter under the New Mexico SCPP for the remainder of 2013.
Furthermore, in connection with an acquisition completed in 2012, the Company’s management made reasonable estimates and recorded an estimated obligation representing the fair values of the Company’s potential contingent obligations to the seller pursuant to the asset purchase agreement. Subsequently, the seller finalized its settlement of certain of these obligations at an amount that was less than the Company originally estimated. As a result, during the three months ended June 30, 2013, the Company reduced its originally recorded contingent obligations and recognized a gain of approximately $5.6 million, or $0.07 per diluted share.
The Company provides the following table summarizing the financial impact that these two matters had on the Company’s diluted earnings per share attributable to LifePoint Hospitals, Inc. for the three months ended June 30, 2013:
A listen-only simulcast, as well as a 30-day replay, of LifePoint Hospitals’ second quarter 2013 conference call will be available on line at today, Friday, July 26, 2013, beginning at 10:00 a.m. Eastern Time.
LifePoint Hospitals, Inc. is a leading hospital company focused on providing quality healthcare services close to home. Through its subsidiaries, LifePoint operates 57 hospital campuses in 20 states. With a mission of “Making Communities Healthier®,” LifePoint is the sole community hospital provider in the majority of the communities it serves. More information about the Company, which is headquartered in Brentwood, Tennessee, can be found on its website, . All references to “LifePoint,” “LifePoint Hospitals,” or the “Company” used in this release refer to LifePoint Hospitals, Inc. or its affiliates.
Adjusted EBITDA is defined by the Company as earnings before depreciation and amortization; interest expense, net; gain on settlement of pre-acquisition contingent obligation; debt extinguishment costs; impairment charge; provision for income taxes; income from discontinued operations, net of income taxes; and net income attributable to noncontrolling interests. LifePoint’s management and Board of Directors use Adjusted EBITDA to evaluate the Company’s operating performance and as a measure of performance for incentive compensation purposes. LifePoint’s credit facilities use Adjusted EBITDA for certain financial covenants. The Company believes 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 U.S. 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 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 GAAP and is susceptible to varying calculations, Adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies.