IASIS Healthcare Announces Year-End 2005 Results.
FRANKLIN, Tenn. -- IASIS Healthcare(R) LLC ("IASIS LLC") today announced financial and operating results for the fiscal fourth quarter and year ended September 30, 2005. The results for the year ended September 30, 2004, reflect the combined financial performance of IASIS LLC and its
Net revenue for the fourth quarter increased 4.4% to $373.5 million, compared with net revenue of $357.7 million for the same quarter of last year. Adjusted EBITDA for the fourth quarter was $44.5 million, compared with adjusted EBITDA of $43.5 million for the same prior-year period. A table describing adjusted EBITDA and reconciling net earnings (loss) to adjusted EBITDA is included in this press release in the attached Supplemental Condensed Consolidated Statements of Operations Information. Net earnings were $4.4 million for the fourth quarter ended September 30, 2005, compared with net earnings of $3.5 million for the same prior-year period. Net patient revenue per adjusted admission increased 3.4% while hospital admissions and adjusted admissions decreased 4.3% and 0.6%, respectively, for the quarter ended September 30, 2005, compared with the same prior-year period.
As previously announced, during the fourth quarter, The Medical Center of Southeast Texas, located in Port Arthur, Texas, was damaged during Hurricane Rita. The hospital sustained roof and water intrusion damage. The Company's results from operations for the fourth quarter ended September 30, 2005, include $4.8 million for estimated property damage to the hospital. While the property damage at The Medical Center did not exceed the applicable insurance deductible, the Company expects to receive insurance recoveries in future periods for business interruption losses. The Company is working with its insuror to resolve and settle all hurricane-related claims.
In commenting on the quarterly results, David R. White, chairman and chief executive officer of IASIS LLC, said, "The fourth quarter results finalized another year of solid top-line and margin growth. Despite challenges during the quarter, including volume softness in certain markets and the impact of hurricane damage on our new hospital in Port Arthur, I am pleased with our continued ability to achieve operational efficiencies, including controlled costs and expanded margins. In fiscal year 2006, we are focused on opportunities for growth in each of our markets, including new hospital construction, which is already underway in Mesa, Arizona."
Net revenue for the year ended September 30, 2005, increased 9.9% to $1.52 billion, compared with net revenue of $1.39 billion for the same period of last year. Adjusted EBITDA for the year ended September 30, 2005, increased 16.4% to $211.4 million, compared with adjusted EBITDA of $181.6 million for the same prior-year period. Excluding the $4.8 million of hurricane-related expenses, as permitted under the Company's credit agreement, adjusted EBITDA for the year ended September 30, 2005, was $216.2 million. Net earnings were $40.6 million for the year ended September 30, 2005, compared with a net loss of $32.4 million for the same prior-year period, which included a loss of $51.9 million relating to the Company's early extinguishment of debt and $19.8 million of merger expenses, both incurred in connection with the acquisition of IASIS by an investor group led by Texas Pacific Group. Additionally, the net loss in 2004 included an $8.9 million non-cash charge in the second quarter of 2004 related to an amendment of the Company's previous senior credit facility.
Net patient revenue per adjusted admission increased 6.5% while total hospital admissions decreased 1.6% and adjusted admissions increased 0.2% for the year ended September 30, 2005, compared with the same prior-year period. On a same facility basis, net patient revenue per adjusted admission increased 6.8% while hospital admissions and adjusted admissions decreased 4.2% and 1.9%, respectively, for the year ended September 30, 2005, compared with the same prior-year period.
A listen-only simulcast and 30-day replay of IASIS LLC's fiscal fourth quarter and year-end 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 December 12, 2005. A copy of this press release will also be available on the Company's website.
IASIS LLC, 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 LLC owns or leases 14 acute care hospitals and one behavioral health hospital with a total of 2,219 beds in service and has total annual net revenue of approximately $1.5 billion. These hospitals are located in five regions: Salt Lake City, UT; Phoenix, AZ; Tampa-St. Petersburg, FL; three cities in Texas, including San Antonio; and Las Vegas, NV. IASIS LLC also owns and operates a Medicaid managed health plan in Phoenix that serves over 113,000 members. In addition, the Company has ownership interests in three ambulatory surgery centers. For more information on IASIS LLC, please visit the Company's website at www.iasishealthcare.com.
This press release contains forward-looking statements within the meaning of the federal securities laws, which are intended to be covered by the safe harbors created thereby. These 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, the discussions of our operating and growth strategy (including possible acquisitions and dispositions), projections of revenue, income or loss, capital expenditures and future operations. Forward-looking statements involve risks and uncertainties, including, without limitation, the risks and uncertainties related to our ability to generate sufficient cash flow to service our existing indebtedness; our substantial level of indebtedness that could adversely affect our financial condition; our ability to retain and negotiate favorable contracts with managed care plans; changes in legislation that may significantly reduce government healthcare spending and our revenue; 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 medical staffs; our hospitals' competition for staffing, which may increase our labor costs and reduce profitability; our failure to comply with extensive laws and government regulations; the possibility that we may become subject to additional federal and state investigations in the future; our ability to satisfy regulatory requirements with respect to our internal control 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; recent hurricane activity in the regions in which we operate that may result in increased property insurance premiums and deductibles; our ability to control costs at Health Choice; the possibility of Health Choice's contract with the Arizona Health Care Cost Containment System being discontinued; 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 construction of Mountain Vista Medical Center; the significant capital expenditures that would be involved in the construction of other new hospitals that could have an adverse effect on our liquidity; the rising costs of construction materials and labor, which could have an adverse impact on the return on investment relating to our new hospital and expansion projects; state efforts to regulate the construction or expansion of hospitals that could impair our ability to operate and expand our operations; the loss of one or more of our senior management team or local management personnel; potential responsibilities and costs under environmental laws that could lead to material expenditures or liability; the outcome of (and expenses incurred in connection with) an ongoing OIG investigation; a decline in the fair value of our reporting units, which could result in a material non-cash charge to earnings from impairment of our goodwill; the impact of national disasters, including our ability to reopen facilities affected by such disasters; our ability to continually enhance our hospitals with the most recent technological advances in diagnostic or surgical equipment; and those risks, uncertainties and other matters detailed in the Company's 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
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands)
Three Three
Months Months
Ended Ended
Sept. 30, Sept. 30,
2005 2004
---------- ----------
Net revenue:
Acute care revenue $284,098 $276,426
Premium revenue 89,418 81,322
---------- ----------
Total net revenue 373,516 357,748
Cost and expenses:
Salaries and benefits 109,487 105,900
Supplies 44,012 42,321
Medical claims 76,027 68,186
Rents and leases 8,515 8,118
Other operating expenses 49,141 52,749
Provision for bad debts 37,108 36,955
Interest expense, net 16,597 16,293
Depreciation and
amortization 19,628 18,225
Management fees 908 746
Hurricane-related expenses 4,762 --
Loss on early
extinguishment of debt -- 232
Merger expenses -- --
Write-off of debt
issue costs -- --
---------- ----------
Total costs and expenses 366,185 349,725
Earnings (loss) before
gain (loss) on sale
of assets, minority
interests and income
taxes 7,331 8,023
Gain (loss) on sale of
assets, net (151) (99)
Minority interests 163 (1,085)
---------- ----------
Earnings (loss) before
income taxes 7,343 6,839
Income tax expense 2,972 3,292
---------- ----------
Net earnings (loss) $4,371 $3,547
========== ==========
Predecessor
June 23, Oct. 1,
Year 2004 2003
Ended through through
Sept. 30, Sept. 30, June 22,
2005 2004 2004
---------- ---------- ----------
Net revenue:
Acute care revenue $1,170,483 $301,305 $794,887
Premium revenue 353,244 88,169 202,273
---------- ---------- ----------
Total net revenue 1,523,727 389,474 997,160
Cost and expenses:
Salaries and benefits 442,173 115,538 308,881
Supplies 184,875 46,580 129,665
Medical claims 302,204 74,051 168,338
Rents and leases 32,750 8,840 23,158
Other operating expenses 211,698 57,346 145,648
Provision for bad debts 133,870 39,486 87,466
Interest expense, net 66,002 17,459 41,935
Depreciation and
amortization 71,037 19,856 48,228
Management fees 3,791 746 --
Hurricane-related expenses 4,762 -- --
Loss on early
extinguishment of debt -- 232 51,852
Merger expenses -- -- 19,750
Write-off of debt
issue costs -- -- 8,850
---------- ---------- ----------
Total costs and expenses 1,453,162 380,134 1,033,771
Earnings (loss) before
gain (loss) on sale
of assets, minority
interests and income
taxes 70,565 9,340 (36,611)
Gain (loss) on sale of
assets, net (231) (107) 3,731
Minority interests (2,891) (1,207) (3,098)
---------- ---------- ----------
Earnings (loss) before
income taxes 67,443 8,026 (35,978)
Income tax expense 26,851 3,321 1,152
---------- ---------- ----------
Net earnings (loss) $40,592 $4,705 $(37,130)
========== ========== ==========
IASIS HEALTHCARE LLC
Condensed Consolidated Balance Sheets
(in thousands)
Sept. 30, Sept. 30,
2005 2004
---------- ----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $89,097 $98,805
Accounts receivable, net 166,456 165,280
Inventories 29,866 26,253
Deferred income taxes 56,003 --
Prepaid expenses and other current assets 25,236 21,297
---------- ----------
Total current assets 366,658 311,635
Property and equipment, net 647,596 532,459
Goodwill 754,375 252,204
Other intangible assets, net 42,000 --
Unallocated purchase price -- 585,013
Other assets, net 42,095 42,850
---------- ----------
Total assets $1,852,724 $1,724,161
========== ==========
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $58,684 $61,295
Salaries and benefits payable 24,887 36,463
Accrued interest payable 18,489 13,821
Medical claims payable 60,201 55,421
Other accrued expenses and
other current liabilities 30,550 26,142
Current portion of long-term debt
and capital lease obligations 7,757 10,728
---------- ----------
Total current liabilities 200,568 203,870
Long-term debt and capital lease obligations 897,051 902,026
Deferred income taxes 74,883 --
Other long-term liabilities 36,801 31,596
Minority interest 26,474 12,964
Equity:
Member's equity 616,947 573,705
---------- ----------
Total liabilities and equity $1,852,724 $1,724,161
========== ==========
IASIS HEALTHCARE LLC
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Predecessor
June 23, Oct. 1,
Year 2004 2003
Ended through through
Sept. 30, Sept. 30, June 22,
2005 2004 2005
---------- ---------- ----------
Cash flows from
operating activities:
Net earnings (loss) $40,592 $4,705 $(37,130)
Adjustments to reconcile net
earnings (loss) to net cash
provided by operating activities:
Depreciation and amortization 71,037 19,856 48,228
Amortization of loan costs 5,789 1,792 2,262
Minority interests 2,891 1,207 3,098
Deferred income taxes 25,600 3,234 --
Loss (gain) on sale of assets 231 107 (3,731)
Hurricane-related expenses 4,762 -- --
Write-off of debt issue costs -- -- 8,850
Loss on early
extinguishment of debt -- -- 14,993
Changes in operating assets and
liabilities, net of acquisitions
and disposal:
Accounts receivable (1,176) 8,722 (8,542)
Establishment of
accounts receivable of
recent acquisition -- -- (11,325)
Inventories, prepaid expenses
and other current assets (7,556) (1,581) (5,656)
Accounts payable and other
accrued liabilities 6,983 25,978 6,991
---------- ---------- ----------
Net cash provided by
operating activities 149,153 64,020 18,038
---------- ---------- ----------
Cash flows from
investing activities:
Purchases of property
and equipment (142,368) (44,806) (82,265)
Acquisitions including working
capital settlement payments (1,359) (1,950) (23,032)
Investment in joint venture (3,732) -- --
Proceeds from sales of assets -- -- 14,928
Change in other assets (4,275) 797 (1,650)
---------- ---------- ----------
Net cash used in
investing activities (151,734) (45,959) (92,019)
---------- ---------- ----------
Cash flows from
financing activities:
Payment of debt
and capital leases (10,849) (1,852) (651,371)
Proceeds from borrowings 2,274 -- 900,000
Debt financing costs incurred (487) (349) (31,469)
Distribution of
minority interests (4,092) (983) (2,510)
Proceeds received from (costs
paid for) hospital partnerships 6,027 (15) 1,784
Proceeds from issuance of
common stock, net -- -- 529,000
Cash paid to security holders -- -- (677,780)
Payment of merger costs
incurred by members of
IASIS Investment LLC -- -- (10,800)
---------- ---------- ----------
Net cash provided by (used
in) financing activities (7,127) (3,199) 56,854
---------- ---------- ----------
Increase (decrease) in cash
and cash equivalents (9,708) 14,862 (17,127)
Cash and cash equivalents
at beginning of period 98,805 83,943 101,070
---------- ---------- ----------
Cash and cash equivalents
at end of period $89,097 $98,805 $83,943
========== ========== ==========
Supplemental disclosure
of cash flow information:
Cash paid for interest $58,930 $3,285 $62,069
========== ========== ==========
Cash paid (refund received)
for income taxes, net $2,421 $(3) $(105)
========== ========== ==========
Supplemental schedule of noncash
investing and financing activities:
Capital lease obligations
incurred to acquire equipment $-- $-- $1,542
========== ========== ==========
Property and equipment
in accounts payable $7,449 $11,006 $13,165
========== ========== ==========
Stock consideration received $-- $-- $40,000
========== ========== ==========
IASIS HEALTHCARE LLC
Segment Information (Unaudited)
(in thousands)
For the Three Months Ended Sept. 30, 2005
----------------------------------------------
Acute Health
Care Choice Elims. Cons.
---------- ---------- ---------- ----------
Net acute
care revenue $284,098 $-- $ -- $284,098
Premium revenue -- 89,418 -- 89,418
Revenue between
segments 1,878 -- (1,878) --
---------- ---------- ---------- ----------
Net revenue 285,976 89,418 (1,878) 373,516
Salaries and benefits 107,280 2,207 -- 109,487
Supplies 43,959 53 -- 44,012
Medical claims -- 77,905 (1,878) 76,027
Rents and leases 8,267 248 -- 8,515
Other operating
expenses 46,133 3,008 -- 49,141
Provision for
bad debts 37,108 -- -- 37,108
Hurricane-related
expenses 4,762 -- -- 4,762
---------- ---------- ---------- ----------
Adjusted EBITDA (1) 38,467 5,997 -- 44,464
Interest expense, net 16,597 -- -- 16,597
Depreciation and
amortization 18,830 798 -- 19,628
Management fees 908 -- -- 908
---------- ---------- ---------- ----------
Earnings before loss
on sale of assets,
minority interests
and income taxes 2,132 5,199 -- 7,331
Loss on sale of
assets, net (151) -- -- (151)
Minority interests 163 -- -- 163
---------- ---------- ---------- ----------
Earnings before
income taxes $2,144 $5,199 $-- $7,343
========== ========== ========== ==========
Segment assets $1,756,404 $96,320 $1,852,724
========== ========== ===========
Capital expenditures $28,695 $132 $28,827
========== ========== ==========
Goodwill $748,618 $5,757 $754,375
========== ========== ==========
For the Three Months Ended Sept. 30, 2004
----------------------------------------------
Acute Health
Care Choice Elims. Cons.
---------- ---------- --------- ----------
Net acute care revenue $276,426 $-- $-- $276,426
Premium revenue -- 81,322 -- 81,322
Revenue between
segments 2,665 -- (2,665) --
---------- ---------- ---------- ----------
Net revenue 279,091 81,322 (2,665) 357,748
Salaries and benefits 103,302 2,598 -- 105,900
Supplies 42,260 61 -- 42,321
Medical claims -- 70,851 (2,665) 68,186
Rents and leases 7,896 222 -- 8,118
Other operating
expenses 50,262 2,487 -- 52,749
Provision for
bad debts 36,955 -- -- 36,955
---------- ---------- ---------- ----------
Adjusted EBITDA (1) 38,416 5,103 -- 43,519
Interest expense, net 16,293 -- -- 16,293
Depreciation and
amortization 18,168 57 -- 18,225
Management fees 746 -- -- 746
Loss on early
extinguishment of debt 232 -- -- 232
---------- ---------- ---------- ----------
Earnings before loss
on sale of assets,
minority interests
and income taxes 2,977 5,046 -- 8,023
Loss on sale of
assets, net (99) -- -- (99)
Minority interests (1,085) -- -- (1,085)
---------- ---------- ---------- ----------
Earnings before
income taxes $1,793 $5,046 $-- $6,839
========== ========== ========== ==========
Segment assets $1,713,849 $10,312 $1,724,161
========== ========== ==========
Capital expenditures $41,704 $155 $41,859
========== ========== ==========
Goodwill $252,204 $-- $252,204
========== ========== ==========
IASIS HEALTHCARE LLC
Segment Information (Unaudited) - Continued
(in thousands)
For the Year Ended Sept. 30, 2005
----------------------------------------------
Acute Health
Care Choice Elims. Cons.
---------- ---------- ---------- ----------
Net acute care revenue $1,170,483 $-- $-- $1,170,483
Premium revenue -- 353,244 -- 353,244
Revenue between
segments 8,475 -- (8,475) --
---------- ---------- ---------- ----------
Net revenue 1,178,958 353,244 (8,475) 1,523,727
Salaries and benefits 431,609 10,564 -- 442,173
Supplies 184,676 199 -- 184,875
Medical claims -- 310,679 (8,475) 302,204
Rents and leases 31,849 901 -- 32,750
Other operating
expenses 200,411 11,287 -- 211,698
Provision for
bad debts 133,870 -- -- 133,870
Hurricane-related
expenses 4,762 -- -- 4,762
---------- ---------- ---------- ----------
Adjusted EBITDA (1) 191,781 19,614 -- 211,395
Interest expense, net 66,002 -- -- 66,002
Depreciation and
amortization 67,840 3,197 -- 71,037
Management fees 3,791 -- -- 3,791
---------- ---------- ---------- ----------
Earnings before loss
on sale of assets,
minority interests
and income taxes 54,148 16,417 -- 70,565
Loss on sale of
assets, net (231) -- -- (231)
Minority interests (2,891) -- -- (2,891)
---------- ---------- ---------- ----------
Earnings before
income taxes $51,026 $16,417 $-- $67,443
========== ========== ========== ==========
Segment assets $1,756,404 $96,320 $1,852,724
========== ========== ==========
Capital expenditures $141,625 $743 $142,368
========== ========== ==========
Goodwill $748,618 $5,757 $754,375
========== ========== ==========
For the Period June 23, 2004
through September 30, 2004
----------------------------------------------
Acute Health
Care Choice Elims. Cons.
---------- ---------- --------- ----------
Net acute care revenue $301,305 $-- $-- $301,305
Premium revenue -- 88,169 -- 88,169
Revenue between
segments 2,790 -- (2,790) --
---------- ---------- ---------- ----------
Net revenue 304,095 88,169 (2,790) 389,474
Salaries and benefits 112,702 2,836 -- 115,538
Supplies 46,513 67 -- 46,580
Medical claims -- 76,841 (2,790) 74,051
Rents and leases 8,602 238 -- 8,840
Other operating
expenses 54,655 2,691 -- 57,346
Provision for
bad debts 39,486 -- -- 39,486
---------- ---------- ---------- ----------
Adjusted EBITDA (1) 42,137 5,496 -- 47,633
Interest expense, net 17,459 -- -- 17,459
Depreciation and
amortization 19,795 61 -- 19,856
Management fees 746 -- -- 746
Loss on early
extinguishment of debt 232 -- -- 232
---------- ---------- ---------- ----------
Earnings before loss
on sale of assets,
minority interests
and income taxes 3,905 5,435 -- 9,340
Loss on sale of
assets, net (107) -- -- (107)
Minority interests (1,207) -- -- (1,207)
---------- ---------- ---------- ----------
Earnings before
income taxes $2,591 $5,435 $-- $8,026
========== ========== ========== ==========
Segment assets $1,713,849 $10,312 $1,724,161
========== ========== ==========
Capital expenditures $44,638 $168 $44,806
========== ========== ==========
Goodwill $252,204 $-- $252,204
========== ========== ==========
IASIS HEALTHCARE LLC
Segment Information (Unaudited) - Continued
(in thousands)
For the Period Oct. 1, 2003
through June 22, 2004
----------------------------------------------
Acute Health
Predecessor Care Choice Elims. Cons.
--------------------- ---------- ---------- ---------- ---------
Net acute care revenue $794,887 $-- $-- $794,887
Premium revenue -- 202,273 -- 202,273
Revenue between
segments 8,031 -- (8,031) --
---------- ---------- ---------- ----------
Net revenue 802,918 202,273 (8,031) 997,160
Salaries and benefits 302,095 6,786 -- 308,881
Supplies 129,518 147 -- 129,665
Medical claims -- 176,369 (8,031) 168,338
Rents and leases 22,694 464 -- 23,158
Other operating
expenses 138,534 7,114 -- 145,648
Provision for
bad debts 87,466 -- -- 87,466
---------- ---------- ---------- ----------
Adjusted EBITDA (1) 122,611 11,393 -- 134,004
Interest expense, net 41,935 -- -- 41,935
Depreciation and
amortization 48,098 130 -- 48,228
Loss on early
extinguishment of debt 51,852 -- -- 51,852
Merger expenses 19,750 -- -- 19,750
Write-off of debt
issue costs 8,850 -- -- 8,850
---------- ---------- ---------- ----------
Earnings (loss) before
gain on sale of assets,
minority interests
and income taxes (47,874) 11,263 -- (36,611)
Gain on sale of
assets, net 3,731 -- -- 3,731
Minority interests (3,098) -- -- (3,098)
---------- ---------- ---------- ----------
Earnings (loss)
before income taxes $(47,241) $11,263 $-- $(35,978)
========== ========== ========== ==========
Capital expenditures $81,945 $320 $82,265
========== ========== ==========
Goodwill $252,204 $-- $252,204
========== ========== ==========
(1) Adjusted EBITDA represents net earnings (loss) before interest
expense, income tax expense, depreciation and amortization,
management fees, loss on early extinguishment of debt, merger
expenses, write-off of debt issue costs, gain (loss) on sale of
assets, and minority interests. Management fees represent
advisory fees to Texas Pacific Group (TPG), the Company's
majority financial sponsor. Merger expenses include legal and
advisory expenses and special bonus compensation of the Company's
predecessor incurred in connection with the acquisition of IASIS
by TPG. 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 condensed
consolidated financial statements as an indicator of financial
performance or liquidity. Adjusted EBITDA, as presented, may not
be comparable to similarly titled measures of other companies.
IASIS HEALTHCARE LLC
Combined Financial and Operating Data (1) (Unaudited)
Three Months Ended Year Ended
Sept. 30, Sept. 30,
---------------------- ----------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
Consolidated Hospitals:
Number of acute care
hospitals at end
of period (2) 14 15 14 15
Beds in service
at end of period 2,219 2,267 2,219 2,267
Average length of
stay (days) 4.4 4.3 4.4 4.4
Occupancy rates
(average beds
in service) 46.3% 46.7% 48.3% 49.8%
Admissions (3) 21,356 22,309 88,836 90,236
Percentage change (4.3%) (1.6%)
Adjusted admissions (3) 35,832 36,040 145,346 145,035
Percentage change (0.6%) 0.2%
Patient days 94,491 96,282 393,523 395,067
Adjusted patient days 152,804 150,766 620,717 612,941
Outpatient revenue
as a % of gross
patient revenue 37.7% 34.8% 35.7% 34.2%
Same Facility (4):
Number of acute care
hospitals at end
of period (2) 14 15 13 14
Beds in service
at end of period 2,219 2,267 2,033 2,081
Net acute care revenue
(in millions) $286.0 $279.1 $1,087.4 $1,040.0
Percentage change 5.2% 4.6%
Average length of
stay (days) 4.4 4.3 4.4 4.4
Occupancy rates
(average beds
in service) 46.3% 46.7% 47.7% 49.3%
Admissions (3) 21,356 22,309 81,473 85,030
Percent change (4.3%) (4.2%)
Adjusted admissions (3) 35,832 36,040 135,761 138,406
Percent change (0.6%) (1.9%)
Patient days 94,491 96,282 356,309 370,683
Adjusted patient days 152,804 150,766 572,269 582,176
Outpatient revenue
as a % of gross
patient revenue 37.7% 34.8% 37.1% 35.3%
(1) The results of IASIS LLC and its predecessor have been combined
in the financial and operating data shown above for the year
ended September 30, 2004.
(2) On April 16, 2005, the Company opened The Medical Center of
Southeast Texas, its new hospital in Port Arthur, Texas. The
operations of Mid-Jefferson Hospital and Park Place Medical
Center moved to the new hospital. As a result, the Company
currently operates 14 hospitals.
(3) The Company's admissions and patient days for the three months
ended September 30, 2004, were 22,309 and 96,282, respectively.
The Company's admissions and patient days for the twelve months
ended September 30, 2004, were 90,236 and 395,067, respectively.
The admissions and patient days reported in the Company's
earnings release on November 15, 2004, were incorrect due to an
inadvertent overstatement of 116 admissions and 1,208 patient
days for the three months ended September 30, 2004, and 513
admissions and 1,417 patient days for the twelve months ended
September 30, 2004, by North Vista Hospital. The Company believes
that the statistical corrections are not material to its
admissions, patient days and derived statistics and did not
change previously reported statistics on a same facility basis.
The statistical corrections had no impact on the Company's
financial statements.
(4) Same facility data for the year ended September 30, 2005 and
2004, exclude the 186-bed North Vista Hospital, which was
acquired in the second quarter of fiscal 2004. Same facility data
for the three months ended September 30, 2005 and 2004, include
the results of North Vista Hospital.
IASIS HEALTHCARE LLC
Supplemental Condensed Consolidated
Statements of Operations Information (Unaudited)
(in thousands)
Three Three
Months Months
Ended Ended
Sept. 30, Sept. 30,
2005 2004
---------- ----------
Consolidated Results:
Net earnings (loss) $4,371 $3,547
Add:
Interest expense, net 16,597 16,293
Minority interests (163) 1,085
Income tax expense 2,972 3,292
Loss (gain) on sale of assets, net 151 99
Depreciation and amortization 19,628 18,225
Management fees 908 746
Loss on early extinguishment
of debt -- 232
Write-off of debt issue costs -- --
Merger expenses -- --
---------- ----------
Adjusted EBITDA (1) $44,464 $43,519
========== ==========
Predecessor
June 23, Oct. 1,
Year 2004 2003
Ended through through
Sept. 30, Sept. 30, June 22,
2005 2004 2004
---------- ---------- ----------
Consolidated Results:
Net earnings (loss) $40,592 $4,705 $(37,130)
Add:
Interest expense, net 66,002 17,459 41,935
Minority interests 2,891 1,207 3,098
Income tax expense 26,851 3,321 1,152
Loss (gain) on sale of assets, net 231 107 (3,731)
Depreciation and amortization 71,037 19,856 48,228
Management fees 3,791 746 --
Loss on early extinguishment
of debt -- 232 51,852
Write-off of debt issue costs -- -- 8,850
Merger expenses -- -- 19,750
--------- --------- ---------
Adjusted EBITDA (1) $211,395 $47,633 $134,004
========= ========= =========
(1) Adjusted EBITDA represents net earnings (loss) before interest
expense, income tax expense, depreciation and amortization,
management fees, loss on early extinguishment of debt, write-off
of debt issue costs, merger expenses, gain (loss) on sale of
assets, and minority interests. Management fees represent
advisory fees to Texas Pacific Group (TPG), the Company's
majority financial sponsor. Merger expenses include legal and
advisory expenses and special bonus compensation of the Company's
predecessor incurred in connection with the acquisition of IASIS
by TPG. 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 condensed
consolidated financial statements as an indicator of financial
performance or liquidity. Adjusted EBITDA, as presented, may not
be comparable to similarly titled measures of other companies.
IASIS HEALTHCARE LLC
Combined Condensed Consolidated Statements
of Operations (Unaudited) (1)
(in thousands)
Three Months Ended Year Ended
Sept. 30, Sept. 30,
---------------------- ----------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
Net revenue:
Acute care net revenue $284,098 $276,426 $1,170,483 $1,096,192
Premium revenue 89,418 81,322 353,244 290,442
---------- ---------- ---------- ----------
Total net revenue 373,516 357,748 1,523,727 1,386,634
Cost and expenses:
Salaries and benefits 109,487 105,900 442,173 424,419
Supplies 44,012 42,321 184,875 176,245
Medical claims 76,027 68,186 302,204 242,389
Rents and leases 8,515 8,118 32,750 31,998
Other operating
expenses 49,141 52,749 211,698 202,994
Hurricane-related
expenses 4,762 -- 4,762 --
Provision for
bad debts 37,108 36,955 133,870 126,952
Interest expense, net 16,597 16,293 66,002 59,394
Depreciation and
amortization 19,628 18,225 71,037 68,084
Management fees 908 746 3,791 746
Merger expenses -- -- -- 19,750
Loss on early
extinguishment
of debt -- 232 -- 52,084
Write-off of debt
issue costs -- -- -- 8,850
---------- ---------- ---------- ----------
Total costs
and expenses 366,185 349,725 1,453,162 1,413,905
Earnings (loss) before
gain (loss) on sale
of assets, minority
interests and
income taxes 7,331 8,023 70,565 (27,271)
Gain (loss) on sale
of assets, net (151) (99) (231) 3,624
Minority interests 163 (1,085) (2,891) (4,305)
---------- ---------- ---------- ----------
Earnings (loss) before
income taxes 7,343 6,839 67,443 (27,952)
Income tax expense 2,972 3,292 26,851 4,473
---------- ---------- ---------- ----------
Net earnings (loss) $4,371 $3,547 $40,592 $(32,425)
========== ========== ========== ==========
(1) The results of IASIS LLC and its predecessor, IASIS, have been
combined to show a net loss for the year ended September 30,
2004. Net earnings for the three months ended September 30, 2004,
represent the actual results of the Company.
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