PRV Province Healthcare Company

Province Healthcare Reports Fourth Quarter Results BRENTWOOD, Tenn., Feb. 16 /PRNewswire-FirstCall/ -- Province Healthcare Company (NYSE:PRV) today announced results for the fourth quarter ended December 31, 2004. Diluted earnings per share (EPS) from continuing operations for the fourth quarter increased to $0.27, compared to $0.23 in the prior year's quarter, and for the year increased to $0.96 from $0.84 in the prior year. As previously announced, the Company has signed a definitive agreement to be acquired by LifePoint Hospitals, Inc. (NASDAQ:LPNT). Completion of the transaction remains subject to the approval of each company's stockholders, receipt of necessary financing and certain other conditions. The transaction is expected to close on or about March 31, 2005. Revenues from continuing operations for the fourth quarter of 2004 increased 22.3% to $238.5 million, compared with $195.0 million in the same quarter of last year. For the quarter, income from continuing operations was $14.1 million, compared with $11.7 million in the prior year's quarter. Cash flow from operations for the fourth quarter increased 112.0% to $33.2 million, compared with $15.7 million in the same quarter of last year. Revenues from continuing operations for the year ended December 31, 2004 increased 18.3% to $882.9 million, compared with $746.2 million in 2003. Income from continuing operations for 2004 was $50.1 million, a 20.0% increase over last year's income from continuing operations of $41.7 million. Cash flow from operations totaled $126.3 million for the year, compared with $104.3 million in the prior year. Province ended the fourth quarter of 2004 with 21 owned or leased hospitals, of which 19 are same-store hospitals. Memorial Medical Center in Las Cruces, New Mexico, acquired through a long-term lease effective June 1, 2004, and Coastal Carolina Medical Center, in Hardeeville, South Carolina, which opened on November 29, 2004, are excluded from same-store results. On a same-store basis, net patient revenue for the quarter increased 1.8%, net patient revenue per adjusted admission increased 5.7% and adjusted admissions decreased 3.7%. Same-store outpatient revenue increased 7.6%, and same-store surgery growth of 3.4% for the quarter was driven by the specialist physicians. Same-store acuity, as measured by the Medicare case mix index, increased to 1.23 in the fourth quarter of 2004 from 1.21 in the fourth quarter of 2003. Martin S. Rash, Chairman and Chief Executive Officer of Province Healthcare, said, "We are very pleased with our 2004 results. Our cash flow from operations reached an impressive $126.3 million. We exceeded our goal of $100.0 to $110.0 million in annual cash flow from operations which funded the completion of Coastal Carolina Medical Center in Hardeeville, South Carolina, and the ongoing construction of Valley View Medical Center, in Fort Mohave, Arizona, with no borrowings from our revolving credit facility used to fund the projects. We saw 148 new physicians begin practicing in our communities, surpassing our goal for the year of approximately 90 physicians." A listen-only simulcast of Province Healthcare's fourth quarter conference call will be available on-line at http://www.prhc.net/ on February 17, 2005, beginning at 10:00 a.m. Eastern Standard Time. The Company owns or leases 21 general acute care hospitals in 13 states with a total of 2,533 licensed beds. Important Legal Information In connection with the proposed transaction between LifePoint Hospitals and Province Healthcare, Lakers Holding Corp. has filed with the Securities and Exchange Commission (the "SEC") a joint proxy statement/prospectus, as part of a Registration Statement on Form S-4, and other relevant materials. The definitive joint proxy statement/prospectus will be mailed to the stockholders of LifePoint Hospitals and Province Healthcare. Investors and security holders are advised to read the joint proxy statement/prospectus and other relevant materials when they become available, as well as any amendments or supplements to those documents, because they will contain important information about LifePoint Hospitals, Province Healthcare and the proposed transaction. In addition, the joint proxy statement/prospectus and other relevant materials filed by Lakers Holding Corp., LifePoint Hospitals or Province Healthcare with the SEC may be obtained free of charge at the SEC's web site at http://www.sec.gov/ . In addition, investors and security holders may obtain free copies of the documents filed with the SEC by LifePoint Hospitals by contacting Investor Relations, LifePoint Hospitals, Inc., 103 Powell Court, Suite 200, Brentwood, Tennessee, 37027, Phone: (615) 372-8500 and by Province Healthcare by contacting Investor Relations, Province Healthcare Company, 105 Westwood Place, Suite 400, Brentwood, Tennessee, 37027, Phone: (615) 370-1377. LifePoint Hospitals and Province Healthcare, and their respective directors and executive officers, may be deemed to be participants in the solicitation of proxies from their respective stockholders with respect to the transactions contemplated by the merger agreement. Information about the directors and executive officers of LifePoint Hospitals, and their interests in the transactions contemplated by the merger agreement, including their ownership of LifePoint Hospitals common stock, is set forth in the proxy statement for LifePoint Hospitals' 2004 annual meeting, which was filed with the SEC on April 28, 2004, and in the joint proxy statement/prospectus. Information about the directors and executive officers of Province Healthcare, and their interests in the transactions contemplated by the merger agreement, including their ownership of Province Healthcare common stock, is set forth in the proxy statement for Province Healthcare's 2004 annual meeting, which was filed with the SEC on April 20, 2004, and in the joint proxy statement/prospectus. Investors and security holders may obtain additional information regarding the interests of such potential participants by reading the joint proxy statement/prospectus and the other relevant documents filed with the SEC. Certain information contained in this release constitutes forward-looking statements. These statements are based only on our current estimates of future events. Forward-looking statements involve known and unknown risks and uncertainties which may cause our actual results in future periods to differ materially from forecasted results. Those risks include, among others, risks associated with general economic and business conditions, the effect of future governmental regulations, changes in reimbursement levels by government programs, including Medicare and Medicaid or other third party payors, the Company's continued ability to recruit and retain physicians and the Company's ability to successfully complete and integrate acquisitions. Those and other risks and uncertainties are described in our most recent reports and filings with the Securities and Exchange Commission. You should not rely on the forward-looking statements contained in this release, as we cannot predict or control many of the factors that may cause future events or results to differ from those forecasted. We undertake no obligation to update any forward- looking statements on the basis of any information, future events or otherwise. PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share amounts) December 31, December 31, 2004 2003(*) (Unaudited) ASSETS Current assets: Cash and cash equivalents $9,824 $46,117 Accounts receivable, less allowance for doubtful accounts of $78,274 in 2004 and $66,835 in 2003 137,052 110,335 Inventories 21,796 18,424 Prepaid expenses and other 14,068 14,614 Assets of discontinued operations 1,365 14,995 184,105 204,485 Property and equipment, net 578,587 459,843 Goodwill 388,709 309,191 Other assets 31,666 36,874 $1,183,067 $1,010,393 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $32,235 $16,083 Accrued salaries and benefits 32,653 27,852 Accrued expenses 25,933 14,241 Current portion of long-term debt 76,241 743 Liabilities of discontinued operations 346 5,156 167,408 64,075 Long-term debt, less current portion 428,383 447,956 Other liabilities 69,090 49,579 Minority interests 2,387 1,910 Stockholders' equity: Preferred stock - $0.01 par value, 100,000 shares authorized, none issued and outstanding -- -- Common stock - $0.01 par value; 150,000,000 shares authorized at December 31, 2004 and December 31, 2003, issued and outstanding 50,030,550 shares and 48,841,157 shares at December 31, 2004 and December 31, 2003, respectively 500 488 Additional paid-in-capital 319,997 306,091 Retained earnings 195,684 141,186 Accumulated other comprehensive loss (382) (892) Total stockholders' equity 515,799 446,873 $1,183,067 $1,010,393 (*) Derived from the audited consolidated financial statements of Province and its subsidiaries, contained in the Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission on September 14, 2004. PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except per share data) Three Months Ended December 31, 2004 2003(b) % of % of Amount Revenues Amount Revenues Revenues: Net patient revenue $235,576 $192,174 Other 2,904 2,867 238,480 100.0% 195,041 100.0% Expenses: Salaries, wages and benefits 87,373 36.7 73,751 37.8 Purchased services 23,746 10.0 17,996 9.2 Supplies 31,769 13.3 24,508 12.6 Provision for doubtful accounts 26,534 11.1 21,506 11.0 Other operating expenses 23,825 10.0 22,916 11.8 Rentals and leases 2,922 1.2 2,332 1.2 Transaction costs 851 0.4 -- -- Depreciation and amortization 12,678 5.3 10,386 5.3 Interest expense 7,698 3.2 6,916 3.6 Minority interests 250 0.1 59 -- Loss on sale of assets 44 -- -- -- Loss on early extinguishment of debt -- -- (1) -- Total expenses 217,690 91.3 180,369 92.5 Income from continuing operations before provision for income taxes 20,790 8.7 14,672 7.5 Income taxes 6,662 2.8 2,963 1.5 Income from continuing operations 14,128 5.9% 11,709 6.0% Discontinued operations, net of tax: Loss from operations (918) (457) Net loss on divestitures -- (8,952) Net income $13,210 $2,300 Diluted earnings (loss) per common share: Continuing operations (a) $0.27 $0.23 Discontinued operations: Loss from operations (0.02) (0.01) Net loss on divestitures -- (0.15) Net income $0.25 $0.07 (a) See calculation of diluted earnings per common share from continuing operations in the Selected Operating Statistics section (attached). (b) The Consolidated Statement of Income for the three months ended December 31, 2003 presented above reflects the restatement of Brim Healthcare, Inc. as a discontinued operation. PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share data) Year Ended December 31, 2004 2003(*) % of % of Amount Revenues Amount Revenues (Unaudited) Revenues: Net patient revenue $872,275 $735,841 Other 10,631 10,367 882,906 100.0% 746,208 100.0% Expenses: Salaries, wages and benefits 323,565 36.6 282,794 37.9 Purchased services 85,698 9.7 68,872 9.2 Supplies 114,186 12.9 95,579 12.8 Provision for doubtful accounts 95,015 10.8 72,583 9.7 Other operating expenses 96,934 11.0 88,137 11.8 Rentals and leases 11,250 1.3 9,007 1.2 Transaction costs 851 0.1 -- -- Depreciation and amortization 46,881 5.3 37,617 5.1 Interest expense 29,652 3.3 26,262 3.5 Minority interests 687 0.1 260 -- Loss on sale of assets 30 -- 75 -- Loss on early extinguishment of debt -- -- 486 0.1 Total expenses 804,749 91.1 681,672 91.3 Income from continuing operations before provision for income taxes 78,157 8.9 64,536 8.7 Income taxes 28,101 3.2 22,816 3.1 Income from continuing operations 50,056 5.7% 41,720 5.6% Discontinued operations, net of tax: Loss from operations (2,220) (1,149) Net gain (loss) on divestitures 6,663 (8,952) Net income $54,499 $31,619 Diluted earnings (loss) per common share: Continuing operations (c) $0.96 $0.84 Discontinued operations: Loss from operations (0.03) (0.02) Net gain (loss) on divestitures 0.11 (0.15) Net income $1.04 $0.67 (c) See calculation of diluted earnings per common share from continuing operations in the Selected Operating Statistics section (attached). (*) See accompanying footnote on Consolidated Balance Sheet. PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Three Months Ended December 31, 2004 2003(d) Cash flows from operating activities: Income from continuing operations $14,128 $11,709 Adjustments to reconcile income from continuing operations to net cash provided by operating activities: Depreciation and amortization 12,678 10,386 Deferred income taxes 15,234 10,746 Provision for professional liability (1,028) 670 Loss on early extinguishment of debt -- (1) Loss on sale of assets 44 -- Changes in operating assets and liabilities, net of effects from acquisitions and disposals: Accounts receivable 311 (4,451) Inventories (895) 35 Prepaid expenses and other 2,705 (4,160) Accounts payable and accrued expenses (12,118) (15,021) Accrued salaries and benefits 993 3,133 Other 1,142 2,615 Net cash provided by operating activities 33,194 15,661 Cash flows from investing activities: Purchase of property and equipment (29,244) (13,027) Purchase of hospitals and healthcare entities 1,102 3,247 Net cash used in investing activities (28,142) (9,780) Cash flows from financing activities: Proceeds from long-term debt -- -- Repayments of debt (10,143) (398) Issuance of common stock 3,880 1,218 Net cash (used in) provided by financing activities (6,263) 820 Net cash (used in) provided by continuing operations (1,211) 6,701 Net cash (used in) provided by discontinued operations (572) 360 (Decrease) increase in cash and cash equivalents (1,783) 7,061 Cash and cash equivalents at beginning of period 11,607 39,056 Cash and cash equivalents at end of period $9,824 $46,117 (d) The Condensed Consolidated Statement of Cash Flow for the three months ended December 31, 2003 presented above reflects the restatement of Brim Healthcare, Inc. as a discontinued operation. PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, 2004 2003(*) (Unaudited) Cash flows from operating activities: Income from continuing operations $50,056 $41,720 Adjustments to reconcile income from continuing operations to net cash provided by operating activities: Depreciation and amortization 46,881 37,617 Deferred income taxes 29,373 14,215 Provision for professional liability 4,300 5,476 Loss on early extinguishment of debt -- 486 Loss on sale of assets 30 75 Changes in operating assets and liabilities, net of effects from acquisitions and disposals: Accounts receivable (12,596) (1,172) Inventories (887) 712 Prepaid expenses and other (2,726) (3,347) Accounts payable and accrued expenses 9,184 (4,107) Accrued salaries and benefits (521) 4,505 Other 3,162 8,165 Net cash provided by operating activities 126,256 104,345 Cash flows from investing activities: Purchase of property and equipment (90,557) (56,926) Purchase of hospitals and healthcare entities (152,215) -- Sale of hospitals and healthcare entities 14,667 -- Net cash used in investing activities (228,105) (56,926) Cash flows from financing activities: Proceeds from long-term debt 110,372 194,199 Repayments of debt (56,150) (213,049) Issuance of common stock 12,200 2,574 Net cash provided by (used in) financing activities 66,422 (16,276) Net cash (used in) provided by continuing operations (35,427) 31,143 Net cash (used in) provided by discontinued operations (866) 349 (Decrease) increase in cash and cash equivalents (36,293) 31,492 Cash and cash equivalents at beginning of period 46,117 14,625 Cash and cash equivalents at end of period $9,824 $46,117 (*) See accompanying footnote on Consolidated Balance Sheet. PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES SELECTED OPERATING STATISTICS (Unaudited) Actual Same Store(1) Three Months Ended Three Months Ended December 31, December 31, 2004 2003 2004 2003 Consolidated Hospitals: Number of hospitals at end of period 21 19 10.5% 19 19 --% Licensed beds at end of period 2,533 2,189 15.7 2,206 2,189 0.8 Beds in service at end of period 2,157 1,933 11.6 1,920 1,933 (0.7) Inpatient admissions 19,638 18,598 5.6 17,006 18,598 (8.6) Adjusted admissions (2) 36,596 33,426 9.5 32,174 33,426 (3.7) Patient days 83,327 78,964 5.5 71,616 78,964 (9.3) Adjusted patient days (3) 155,300 141,925 9.4 135,531 141,925 (4.5) Average length of stay (days) 4.2 4.3 (2.3) 4.2 4.3 (2.3) Net patient revenue $235,576 $192,174 22.6 $195,488 $192,082 1.8 Net patient revenue: Per inpatient admission $11,996 $10,333 16.1 $11,495 $10,328 11.3 Per adjusted admission $6,437 $5,749 12.0 $6,076 $5,746 5.7 Gross revenue: Inpatient $273,872 $240,819 13.7 $231,340 $240,819 (3.9) Outpatient 236,476 191,824 23.3 206,317 191,824 7.6 $510,348 $432,643 18.0 $437,657 $432,643 1.2 Net Patient Revenue by Payor: Medicare 37.6% 37.9% 37.7% 37.8% Medicaid 11.2 9.1 10.2 9.1 Other 51.2 53.0 52.1 53.1 Total 100.0% 100.0% 100.0% 100.0% Three Months Ended December 31, 2004 2003 Diluted Earnings Per Share Calculation: Income from continuing operations $14,128 $11,709 Add convertible notes interest, net of tax 2,083 1,838 Adjusted net income $16,211 $13,547 Basic shares plus stock options 51,811 49,791 Convertible shares 9,100 9,099 Diluted shares outstanding 60,911 58,890 Diluted earnings per share $0.27 $0.23 (1) Represents hospitals owned or leased during both periods. (2) Used by management and investors as a general measure of combined inpatient and outpatient volume. Adjusted admissions are computed by multiplying admissions (inpatient volume) by the outpatient factor. The outpatient factor is the sum of gross inpatient revenue and gross outpatient revenue divided by gross inpatient revenue. The adjusted admissions computation equates outpatient revenue to the volume measure (admissions) used to measure inpatient volume, resulting in a general measure of combined inpatient and outpatient volume. (3) Adjusted patient days are computed by multiplying patient days (inpatient volume) by the outpatient factor. The outpatient factor is the sum of gross inpatient revenue and gross outpatient revenue divided by gross inpatient revenue. The adjusted patient days computation equates outpatient revenue to the volume measure (patient days) used to measure inpatient volume, resulting in a general measure of combined inpatient and outpatient volume. PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES SELECTED OPERATING STATISTICS (Unaudited) Actual Same Store(1) Year Ended Year Ended December 31, December 31, 2004 2003 2004 2003 Consolidated Hospitals: Number of hospitals at end of period 21 19 10.5% 19 19 --% Licensed beds at end of period 2,533 2,189 15.7 2,206 2,189 0.8 Beds in service at end of period 2,157 1,933 11.6 1,920 1,933 (0.7) Inpatient admissions 76,107 72,630 4.8 70,071 72,630 (3.5) Adjusted admissions (2) 141,671 131,557 7.7 131,277 131,557 (0.2) Patient days 323,949 307,195 5.5 297,083 307,195 (3.3) Adjusted patient days (3) 602,962 556,331 8.4 556,459 556,331 -- Average length of stay (days) 4.3 4.2 2.4 4.2 4.2 -- Net patient revenue $872,275 $735,841 18.5 $779,419 $735,727 5.9 Net patient revenue: Per inpatient admission $11,461 $10,131 13.1 $11,123 $10,130 9.8 Per adjusted admission $6,157 $5,593 10.1 $5,937 $5,592 6.2 Gross revenue: Inpatient $1,033,038 $903,740 14.3 $933,552 $903,740 3.3 Outpatient 889,903 732,844 21.4 814,808 732,844 11.2 $1,922,941 $1,636,584 17.5 $1,748,360 $1,636,584 6.8 Net Patient Revenue by Payor: Medicare 37.7% 38.5% 38.7% 38.5% Medicaid 10.1 10.3 9.7 10.3 Other 52.2 51.2 51.6 51.2 Total 100.0% 100.0% 100.0% 100.0% Year Ended December 31, 2004 2003 Diluted Earnings Per Share Calculation: Income from continuing operations $50,056 $41,720 Add convertible notes interest, net of tax 7,781 8,325 Adjusted net income $57,837 $50,045 Basic shares plus stock options 50,938 49,305 Convertible shares 9,100 10,243 Diluted shares outstanding 60,038 59,548 Diluted earnings per share $0.96 $0.84 See accompanying footnotes on previous page. DATASOURCE: Province Healthcare Company CONTACT: Pamela L. Hunter, Vice President, Investor Relations of Province Healthcare Company, +1-615-370-1377 Web site: http://www.provincehealthcare.com/

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