PRV Province Healthcare Company

Province Healthcare Reports First Quarter Results: EPS Increases 20% BRENTWOOD, Tenn., April 28 /PRNewswire-FirstCall/ -- Province Healthcare Company today announced results for the first quarter ended March 31, 2004. Diluted earnings per share (EPS) from continuing operations for the quarter increased 20% to $0.24 from $0.20 in the prior year. Revenues from continuing operations for the first quarter of 2004 increased 9.9% to $204.9 million, compared with $186.5 million in the same quarter of last year. Income from continuing operations for the quarter was $12.1 million compared with $10.0 million in the prior year. Cash flow from operations for the first quarter was $25.0 million, compared with $36.1 million in the same quarter of last year. Adjusted for 2003 incentive compensation payments made in 2004, timing of insurance premium payments and a federal income tax refund received in the first quarter of 2003, cash flow from operations increased approximately 34.4% quarter over quarter. Accounts receivable days outstanding stood at 54 days at March 31, 2004. On April 23, 2004, the Company and the Healthcare District of Palm Beach County executed an Asset Purchase Agreement to permit the Healthcare District to reacquire Glades General Hospital in Belle Glade, Florida. The transaction is expected to close effective May 1, 2004. Pursuant to this plan of divestiture, the operations and non-cash impairment of assets charge related to this hospital are reported as "discontinued operations" and the consolidated financial statements and statistics for all prior periods have been adjusted to reflect this presentation. The Company's remaining 19 hospitals are now reported as "continuing operations" and are considered "same-store." Comparing the first quarter of 2004 with the first quarter of 2003, net patient revenue increased 10.3%, driven by a 1.4% increase in total hospital admissions and a 2.6% increase in adjusted admissions. Net patient revenue per adjusted admission increased 7.5%, and gross outpatient revenue increased 14.4%. "Our first quarter results confirm our optimism for 2004," said Martin S. Rash, Chairman and Chief Executive Officer of Province Healthcare. "The strong 10.3% increase in net patient revenue and 14.4% increase in gross outpatient revenue resulted from our outstanding physician recruiting efforts and the additional capital spent on revenue generating projects in 2003. Additionally, we remain very enthusiastic about our two new hospital construction projects, Coastal Carolina Medical Center near Hilton Head, South Carolina, and Ft. Mohave Hospital in Ft. Mohave, Arizona. These communities are in high growth areas and represent significant opportunities for our Company." A listen-only simulcast, of Province Healthcare's first quarter conference call, will be available on-line at http://www.prhc.net/ on April 29, 2004, beginning at 11:00 a.m. Eastern Daylight Time. The Company owns or leases 20 general acute care hospitals (including one classified as "discontinued operations") in 13 states with a total of 2,273 licensed beds. The Company also provides management services to 36 non-urban hospitals in 14 states with a total of 3,033 licensed beds. Certain statements contained in this release, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may include projections of revenues, income or loss, capital expenditures, capital structure, or other financial items, statements regarding the plans and objectives of management for future operations, 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. These statements are based on current estimates of future events, and the Company has no obligation to update or correct these estimates unless considered material to the Company. Forward-looking statements involve known and unknown risks and uncertainties which may cause the Company's 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 are described in the Company's reports and filings with the Securities and Exchange Commission. PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share amounts) March 31, December 31, 2004 2003(*) ASSETS Current assets: Cash and cash equivalents $56,624 $46,134 Accounts receivable, less allowance for doubtful accounts of $62,937 in 2004 and $66,875 in 2003 117,103 111,957 Inventories 18,235 18,424 Prepaid expenses and other 12,901 11,832 Assets of discontinued operations 13,787 14,569 218,650 202,916 Property and equipment, net 468,431 460,031 Goodwill 309,271 309,271 Other assets 35,502 36,907 $1,031,854 $1,009,125 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $18,059 $16,343 Accrued salaries and benefits 23,817 28,740 Accrued expenses 22,044 14,238 Current portion of long-term debt 473 743 Liabilities of discontinued operations 2,875 2,749 67,268 62,813 Long-term debt, less current portion 451,537 447,956 Other liabilities 49,151 49,573 Minority interests 1,946 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 March 31, 2004 and December 31, 2003, issued and outstanding 49,337,188 shares and 48,841,157 shares at March 31, 2004 and December 31, 2003, respectively 493 488 Additional paid-in-capital 309,477 306,091 Retained earnings 152,746 141,186 Accumulated other comprehensive loss (764) (892) Total stockholders' equity 461,952 446,873 $1,031,854 $1,009,125 (*) Derived from the audited consolidated financial statements of Province and its subsidiaries, contained in the Company's Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 9, 2004. PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share data) Three Months Ended March 31, 2004 2003 % of % of Amount Revenues Amount Revenues Revenues: Net patient revenue $198,241 $179,680 Other 6,635 6,784 204,876 100.0% 186,464 100.0% Expenses: Salaries, wages and benefits 75,564 36.9 72,355 38.8 Purchased services 18,870 9.2 16,650 8.9 Supplies 26,060 12.7 24,022 12.9 Provision for doubtful accounts 20,245 9.9 16,041 8.6 Other operating expenses 25,254 12.3 23,698 12.7 Rentals and leases 2,370 1.2 2,319 1.2 Depreciation and amortization 10,202 5.0 8,878 4.8 Interest expense 6,920 3.4 5,722 3.1 Minority interests 67 -- 67 -- Loss on sale of assets -- -- 3 -- Total expenses 185,552 90.6 169,755 91.0 Income before provision for income taxes 19,324 9.4 16,709 9.0 Income taxes 7,180 3.5 6,670 3.6 Income from continuing operations 12,144 5.9% 10,039 5.4% Discontinued operations, net of tax: Loss from operations (414) (188) Impairment of assets (170) -- Net income $11,560 $9,851 Diluted earnings (loss) per common share: Continuing operations (a) $0.24 $0.20 Discontinued operations: Loss from operations (0.01) -- Impairment of assets -- -- Net income $0.23 $0.20 (a) See calculation of diluted earnings per common share from continuing operations in the Selected Operating Statistics section (attached). PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Three Months Ended March 31, 2004 2003 Cash flows from operating activities: Income from continuing operations $12,144 $10,039 Adjustments to reconcile income from continuing operations to net cash provided by operating activities: Depreciation and amortization 10,202 8,878 Deferred income taxes 2,375 830 Provision for professional liability 1,603 1,979 Loss on sale of assets -- 3 Changes in operating assets and liabilities, net of effects from acquisitions and disposals: Accounts receivable (5,146) (1,302) Inventories 189 145 Prepaid expenses and other (2,335) (5,476) Accounts payable and accrued expenses 8,988 21,735 Accrued salaries and benefits (4,923) 167 Other 1,898 (941) Net cash provided by operating activities 24,995 36,057 Cash flows from investing activities: Purchase of property and equipment (18,476) (15,175) Purchase of hospitals and healthcare entities -- (3) Net cash used in investing activities (18,476) (15,178) Cash flows from financing activities: Repayments of debt (255) (20,387) Issuance of common stock 3,902 1,163 Net cash provided by (used in) financing activities 3,647 (19,224) Net cash provided by continuing operations 10,166 1,655 Net cash provided by (used in) discontinued operations 324 (289) Increase in cash and cash equivalents 10,490 1,366 Cash and cash equivalents at beginning of period 46,134 14,648 Cash and cash equivalents at end of period $56,624 $16,014 PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES SELECTED OPERATING STATISTICS (Unaudited) Actual and Same Store (1) Three Months Ended March 31, 2004 2003 % Change Consolidated Hospitals (Continuing Operations): Number of hospitals at end of period 19 19 --% Licensed beds at end of period 2,200 2,208 (0.4) Beds in service at end of period 1,933 1,933 -- Inpatient admissions 18,993 18,724 1.4 Adjusted admissions (2) 33,984 33,109 2.6 Net patient revenue per adjusted admission $5,833 $5,427 7.5 Patient days 81,247 80,583 0.8 Adjusted patient days (3) 145,320 142,518 2.0 Average length of stay (days) 4.28 4.30 (0.5) Net patient revenue (000's) $198,241 $179,680 10.3 Gross revenue (000's): Inpatient $253,943 $227,764 11.5% Outpatient 200,276 175,004 14.4 $454,219 $402,768 12.8 Net Patient Revenue by Payor (Continuing Operations): Medicare 40.7% 39.5% Medicaid 9.1 10.7 Other 50.2 49.8 Total 100.0% 100.0% Three Months Ended March 31, 2004 2003 % Change Diluted Earnings Per Share From Continuing Operations Calculation (000's, except for per share amounts): Income from continuing operations $12,144 $10,039 21.0% Add convertible notes interest, net of tax (4) 1,898 -- $14,042 $10,039 Basic shares plus stock options 50,338 48,758 Convertible shares (4) 9,099 -- 59,437 48,758 Diluted earnings per share from continuing operations $0.24 $0.20 20.0% (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. (4) The Company's two outstanding series of convertible notes are anti- dilutive for the three months ended March 31, 2003 and thus, are not included in the diluted earnings per share calculation for such period. DATASOURCE: Province Healthcare Company CONTACT: Merilyn H. Herbert, Vice President, Investor Relations of Province Healthcare Company, +1-615-370-1377 Web site: http://www.provincehealthcare.com/

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